Diverse by Default - Public v1

A collaborative report
Diverse by Default September 2023
About What Why How Future
About this report
This is the first ‘Diverse by Default’ report. In it, the aim is to set The value-add of the report is five-fold:
out a constructive and solution-focused vision and a path for the
startup and the venture capital (VC) ecosystem. 1. All-encompassing = covers different ecosystem players
2. Solution-focused = exhaustive forward-looking solutions
The inspiration for the report stems from discussions with the for different players
ecosystem players across the years. There are reports covering 3. Frameworks = Establish multiple structures starting with
surveys and fundraising data, though the diversity topic deserves (1) Diversity mapping, (2) Three tier-framework to
much more. The goal here was to present an all-encompassing, diversity, (3) AA approach to segment solutions, (4) BB
forward-looking solutions-focused view. approach for Founders, and (5) CC approach for
Investors.
Diversity doesn’t belong to one group/association/ethnicity/VC/ 4. Reality touch points = Comments and quotes from the
person. Hence, this report is titled ‘A collaborative report,’ as it ecosystem people on every solution/idea/
belongs to the community. recommendation.
5. Real-life examples = Connecting solutions with on-the-
Independence and pragmatism were paramount in conducting ground examples to make them more tangible.
research, interviewing, and writing this report. Simultaneously, it
was strived to remain open and collaborative. Next, building an Diversity is also personalized; hence, this report can’t answer
independent bi-sided lens to view the diversity topic was everyone’s questions. The examples quoted are non-
prioritized, i.e., people often want to see arguments through exhaustive, and the solutions presented are set in stone.
their lens and disregard or overlook other viewpoints. Such Readers are strongly recommended to assess their diversity
behavior is deteriorating diversity discussion instead of alignment and focus on building their paths.
propagating a healthy outcome.
Thoughts have been put together carefully, though there is no

corner-cut in hitting hard where needed. If this genuinely hurts
anyone’s sentiments, please treat this as an unintended
consequence.

1. What? 2. Why?
Two essential starting points to the Establishing the diversity issue is not
diversity topic are covered: enough! There needs to a healthy
connection between diversity and
(a) What does diversity mean? ‘Why’ the issue is big enough to
(b) What is the current status of deserve attention and solutions.
diversity in the startup and the VC
ecosystem?
‘‘ Maximum efforts in this

report have been spent on
the ‘How’ section because
that is where the ecosystem
2. How? 4. Future conversation should move
towards to create the most
‘How’ section is most existential for Future is what comes after this report.
report. Three core elements: signi cant value-add.
But more importantly - what aspects or
(a) ‘Diversity Mapping’ for readers to questions can different ecosystem
assess their diversity alignment players support in answering.
(b) 3-Tier Framework to analyse the
diversity topic
(c) Solutions for various ecosystem
participants
Diverse By Default | Page 3

 

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What is diversity*?
Diversity can be described as the representation, in a group, of various facets of identity, including
(but not limited to) race, ethnicity, nationality, gender identity, LGBTQ+ status, socioeconomic
status, ability, religion, and age.
*For a lack of better consensus and for the sake of everyone’s ease of understanding, we are using the word diversity.
Also, we are using the word diversity in the same breath as other ecosystem words like under-represented, etc.
Inspired by the definition used by Deloitte.
‘‘ One of the issues is that the de nition

of diversity is not commonly
‘‘ Is the word diversity overused-yes! Too many investors are just
using it conveniently for their bene t. Neither do phrases like
established or agreed upon. under-represented and under-funded do justice. The language
implies that white men are at the centre of the ecosystem
Investor, Europe Investor, U.S.

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What? 1
Many reports and articles have been

highlighting issues related to diversity in 3
the startup and the VC ecosystem for a 2
long time.
Whether we look from the angle of

pipeline or funding, support or
mentorship, networking or connections,
there are stark and visible gaps for the 5
diverse founders and diverse investors. 4
Data providers, investors, and tech

companies seldom sponsor or conduct
surveys/reports. The goal often leads to 7
undeniable numerical data on diversity.

Such data then becomes underlying facts
for countless other blogs and articles. 6
There are limited additions in this report

10
w.r.t such numerical ‘What.’ Instead, the
focus was on collecting these disparate
8
data/information and putting them
together to build an overarching diversity
image. To our surprise, it wasn't easy. 9
Read on👇
11

The Diversity Puzzle
Startup Funding Startup Founders VC Funding VC Investors
1.9% = Women-only led 15% = Tech startup founders 5% = VC partner investors

Gender
1 5 7 1% = capital managed by all- 9
are women women GPs in Nordics are women

2 13% = Women (co-
founded) 4 1% = VC funding was raised 10 15% = VC partner investors
by women-only GP teams are women
Startup executives=2.1% Black

Black*
11 1% = Black-founded 6 8 2% = raised by Black VCs 11 < 1% = Black VC investors
3 88% = self-funded Black- 12 54% of Black VC partners did

founders (UK) so by starting own funds
Ethnicity
4 0.7% of total unicorn 4

1.4% of unicorns = all minority
funding = all minority ethnic founder teams
ethnic founder teams
6 Startup executives=2.6% Latinx
Global focus
U.S. focus
Europe & UK focus
Diversity discussion is too disparate!

There is limited global comprehensive data on a single time-line.
Data figures are captured from different reports. Caution, not every data point is from the same year. Check references for more.
* ‘Black’ is a subcategory in this representation. It is chosen to capture max. data availability. Intersectional data is unavailable for different geo’s. Diverse By Default | Page 6

Why? 1 2
'What' often leads to 'Why.'
Again, much research has been done that

concretely proves diversity's role in ushering 3
in better outcomes - for our communities,

companies, and ecosystem.
We couldn't have done a more value-adding

and detailed job than the researchers with 4 5
the personalised interview methodology
followed in this report. Instead, the focus
was to establish two critical structures:
(a) Diversity Mapping: After acknowledging

the 'What' and 'Why' of the diversity, readers
need to assess where their ideology falls on 6 7
the diversity mapping.
(b) 3-tier framework: connects different

diversity elements - ecosystem players,
solutions, and delivery factors.
9
10

Diversity Mapping / 1
Hypothetical case - An established VC Hypothetical case - A diverse founder
‘‘ We have raised money from investors to deliver ‘‘ Venture capital is a private club with no easy entry
outstanding returns so they can pay it forward to their for us. The percentage of money allocated to diverse
clients. I don’t have space for emotional investing. I founders is a slap on our face. We should be getting
want to invest in the founders and the business cases more allocations from investors. It’s a must.
that make sense.
Diversity focus
Where do you
place yourself?
Business focus
Having understood the ‘What’ and the ‘Why,’ and having read the two cases above,
assess your diversity alignment and map yourself on the diversity chart.
The graph above is an illustrative view. Diverse By Default | Page 8

Diversity Mapping / 2
Diversity focus
Why is ‘Diverse By default’ position important?
One word - ‘pragmatism.’
When we align ourselves to extremes, it is unlikely to leave Diverse By Default

room for collaboration. ‘Diverse By Default’ is a position where
we appreciate each other’s views and, MOST IMPORTANTLY,
make a conscious effort to move forward along a growth path.
Business focus
What does ‘Diverse By Default’ path mean?
Previous hypothetical case - An established VC Previous hypothetical case - A diverse founder
• Browse through evidence of diversity w.r.t increased • Broaden your negotiation and argument toolkit by
team performance and better investment outcomes. bringing attention to business and investment outcomes.
• Track internal pipeline w.r.t diversity metrics. • Educate investors on the business area or specific geo.
• Track investment outcomes w.r.t diversity metrics. • Focus conversation with investors on joint exploration of
• Open up discussions with diversity-focused VCs. future positive outcomes.

3-Tier Framework
Ecosystem Players:
Founders and VCs are not the only players in the
diversity discussion. It’s also the government,
media, organizations, employees, experts, etc.
Majority of the ecosystem players are covered in
separate sections. Ecosystem Players
Solutions: Awareness Action

This report has curated and proposed several
solutions for different ecosystem players. The
solution list is by no means complete, though
care has been taken to remain all-encompassing.
Solutions
Awareness-Action (AA) classi cation:
All solutions are not created equal and should be
separated based on a logical pattern, making it
easier for everyone to create a workable strategy
for themselves.

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Founder Solutions
Following topics are covered:
1. ‘Build Basics’ approach for founders

2. Founder solutions mapping
3. Solution descriptions
4. Connecting ‘Build Basics’ approach with the solutions
‘‘ The rst piece of advice I give founders is to learn

on someone else’s dime. Hone the craft in
established or emerging startups. Make mistakes
and assimilate personal learnings. Once you are
prepared - go build your startup.
Founder/Investor, UK

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Build Basics (BB) Approach
Most diverse founders cite either (a) lack of funding, (b) lack of support, or (c) lack of
knowledge - as their most significant pain points when building startups. This report first
proposes a Build Basics (BB) approach for diverse founders. Six basics that diverse
founders must excel at:
1. Sell it before you build it: Before building upon your idea, test whether you can sell a
version zero. A likely reason for startup failure is not enough demand for the product.
2. Understand the market and the alternatives: It’s more than doing a competitor
analysis. Being on top of future trends and developing own ‘secret sauce’ is the key.
3. Understand what VCs look for: Not every startup needs VC funding. Understand the
alternatives, and if VC capital is the chosen route - be sure of what VCs expect from
the startup.
4. Create better decks: It is easiest for investors to pass on an opportunity because the
deck is poorly articulated or misses critical slides.
5. Raise before raising: It is far easier to anticipate the capital needs and build one’s
investor network in advance than stressing out when only a few months of runway are
left.
6. Build your tribe*: The startup journey is tough. Surrounding yourself with people who
understand and can support you through challenges is crucial.
The BB approach will not solve all issues for the diverse founders but will likely improve
their odds of building a successful startup tremendously.
* Suggestion to include from an interviewee Diverse By Default | Page 32
Founder Solutions Mapping

Action
8 Awareness focus Action focus

9
10 1. Founder Groups 8. Raise Before Raising

11 2. Getting-Stuff-Done Programs 9. Support Programs
2
3. University Groups 10. Grants
12
1 4. Startup Education 11. Pitch Events
7 5. Ask An Alumni 12. Research
5 6
6. Mentorship
4 7. Startup Events
3
Awareness
Goal for founders should be to shift their maximum learning curve to the ‘Awareness’ bucket.
Competition for capital is ruthless. It’s not ‘learning on the job' environment anymore.
What is this?
• Founder focused groups on various channels like WhatsApp, Slack, Discord, etc.
• Primary goal of joining such groups could be building community and knowledge.
‘‘ Few female founders tell me that their female-

only WhatsApp peer groups are the number
‘‘ The rst time I built my app was using React. It took
time. Had I been part of any community - I would
one go-to source to get support on any startup have realized how easy it is to create an MVP with
topic. no-code tools these days.
Founder Investor, Europe Founder/Investor, Europe
Groups
How to go about it?

• Ask a fellow founder, if they are part of any interesting founder group and if you can be included.
• Most groups also allow early-founders (only with an idea) to become a part of the group.
• Platforms like Slack can be meaningful as there is a record of past conversations. Browse extensively to level-up.
• Such platforms can also help you find your co-founder.
• Examples specific to diversity angle: Female Foundry (Link), Founderland (Link). Communities like
NoCodeFounders (Link) present a more generalist to Founder communities.
Important:
• Be quick to judge the value of a group.
• Some groups boast big community numbers, but there is not much activity. While in others, there is too much
self-promotion content.
• Be there to learn and not tarnish anyone. Remember, what you will post - stays in the system.

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What is this?
• Focus is on hands-on development and execution.
• A bit newer trend, though can be extremely effective in supporting founders in building their MVP’s, getting traction,
instilling confidence in first-time founders, and building network.
• Such groups can also help you find your co-founder.
How to go about it?

Treat these groups as testing grounds or building version-0 of your idea.
Who is doing it right?

Case Study: Nights & Weekends (Link)
Get-Stuff-Done
Programs N&W absolutely hits the nail in nudging people to get up and get things done. There is no bar on the ideas (people
are creating music albums to building next-gen AI tools). N&W gives creators/builders/founders a framework to work
with and achieve their goals. With a focus on execution, N&W is an enabler for diverse founders who join with just an
idea. Another diversity enabler is that program is free.
Excerpt from their email - "90% of our base started their idea from from zero in nights & weekends. meaning, these
are ideas that otherwise may have never come to life. and, 40% of them want to go on to actually start a legit
company + give it their all.”
Important:
• Many groups are overwhelming tilted towards software. As a founder, if you don’t want to build tech expertise, focus on finding a buddy.
• Such groups/programs can be very fast paced. Don’t be surprised if you loose steam or enthusiasm. The idea is to keep going.
• Since these groups are melting pot of people and ideas, it’s recommended to soak in as much as possible. You may find an interesting
pivot to your own idea; or might come to conclusion that your idea needs more refinement.

What is this?
• Many engineering and business schools have alumni groups. Think entrepreneurship clubs, startup clubs, tech clubs.
• Because there is a sense of common-belonging, such groups become instant go-to for anyone wanting information,
connections, knowledge, or additional resources.
University • Most groups/communities are diversity friendly and can also help you find your co-founder.
Groups
How to go about it?
Find about groups from university, or fellow alumni/students. If something doesn’t exist - create it. For example - few
students saw a gap in their MBA program, which didn’t offer any club focused on entrepreneurship. Determined to do
something, they initiated a startup club and organised chapter events. Don’t wait; take the initiative.
What is this?
Startup-focused education programs are excellent for founders who want to cover the basics. It doesn’t need to be a
formal program or startup knowledge in the broader sense. One can also focus on specific startups topics via excellent
blogs, curated article repositories, and videos.
Startup
How to go about it?
Education
Try the free ones first. Don’t get locked up to one program/investor/association. Go for 1-2 programs simultaneously - to
understand the subtle differences in what they teach and hone your ability to question the differences.
Who is doing it right?

YC StartupSchool (Link). Antler Ignite program (Link). Collections like Failory (Link), Founder Secrets (Link), etc.
‘‘ You need 3X your network, anytime

you need to pull-off a startup task.
‘‘ What about diverse founders who
didn’t go to any university. How are
‘‘ I read venture deals book from Brad
Feld inside-out 3 times. It’s not even that
Want to nd your co-founder? 3X we enabling them? Education based long. Maybe the data and market has
your network rst. University groups bias and discrimination is a real thing evolved; but the basics and term sheet
are excellent way to get started. in the VC world.’ intricacies have remained the same.
Investor, Europe Operator/Investor, Europe Founder, U.S.

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What is this?
Reaching out to one’s experienced university alums (Founders/Operators/Sector experts) for startup or business-focused
advice is one of the oldest tried and tested methods.
How to go about it?

Make sure to send a well crafted and thoughtful message with a clear ask. Alums are likely busy in their own lives.
Don’t get demotivated if you aren’t getting any meaningful response. Change the tone and content of your intro
email. You should likely change the format based on the platform (a Twitter message should differ from a LinkedIn
note). Check out examples of crafting a great message (Link, Link, Link, Link). Realize that there is no perfect way of
writing such messages. There is no silver bullet that will get you a reply, every time.
Ask An Alumni
Important
Culture plays a massive role. Example - An emerging VC manager raised millions for his upcoming VC fund in the U.S. by
contacting his MBA alumni. On the other hand - a diverse founder in the EU could not even get his MBA alumni to respond
to his email/messages.
• Using alums to get intros to others (investors, corporate contacts, etc.) could be less effective. Without a healthy
relationship, limited people would be willing to get you introductions.
• It’s a fact that ‘Warm intros are awful for diversity’ (Link)
‘‘ It’s a numbers’ game. I sent out 80+ emails ‘‘ What about diverse founders who didn’t go to
any university. How are we enabling them?
and LinkedIn messages to my alumni before
Education based bias and discrimination is a
nally getting my rst meaningful response.
real thing in the VC world.
Founder, Europe Operator/Investor, Europe

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What is this?
• Mentorship not only works in the corporate world; it also works wonders in the startup world.
• Ideally, everyone should have at least one. A founder 2-3 steps ahead of you could be of great help.
How to go about it?

• Look for these = 1. Can you respect the mentor? 2. Is the mentor helpful? 3. Is the mentor knowledgeable?
• First connect with people in your immediate network (LinkedIn contacts, alumni, 2nd-degree network). Expand
your horizon thereafter.
‘‘ All my co-founders and I have at ‘‘ Founders who don’t want to be ‘‘ Women need to speak up
least 2-3 mentors. We have labeled ‘diverse’ - understood! more. Especially the ones
Mentorship
mentors for different areas of However, also think about who are role-models. We
our startup e.g. M&A mentor to inspiring others by sharing your need all - we need the brash
help us understand potential stories and journeys. Do it for ones, and we also need the
exits scenarios and what unicorn others, if not for yourself. articulate ones. Plus, more
startups look at before acquiring voices from the non-startup
Operator, Europe
smaller startups such as ours. world, like Sports stars. It’s
not the time to be polite.
Founder, Europe
Founder, UK
Important
• Having 2-3 mentors is a luxury for most founders. Aim for having at least one.
‘‘ Language is so crucial to
fundraising. More decisiveness will
• With mentorship, issue is about the fit (mentor-mentee). pull conversations in diverse
• Instead of finding a perfect fit, start with someone you can trust and is helpful. founders' favor. State your track
• Don’t make mentorship a uni-directional relationship. Offer your support to the mentor. record unapologetically.’.
• Beware of mentors asking for startup equity.
• Separate the board membership topic from mentorship. Operator, U.S.

What is this?
In-person, hybrid, and online events + meet-ups which are not specifically focused on startup pitching.
How to go about it?

• Treat them as one of the best ‘awareness’ recipes out there.
• There are many online startup events happening at any given time. It’s the best equalizer for any diverse founder who
can attend from anywhere in the world and get the same content as everyone else.
• Keep an eye on social media, especially on top VCs in your area - as they organize sessions worth attending.
• Also, great to attend multiple IRL events, early in your startup journey, if they happen in your city.
Startup events ‘‘ Product was front-and-center ‘‘ You do see women and ‘‘ Diverse founder-support-events
for my startup. I attended minority groups in different have become what CSR was ve
multiple online sessions on PLG startups and investors events, years back. It’s good for the
topic. There are so many great however, it is not enough. The VC’s image. However, too much
Product in uencers on LinkedIn event organisers need to focus coaching is delaying fundraising
who also hold sessions. Plus, on setting up diverse panelists and confusing founders. Plus,
Lenny’s Slack community and and inviting diverse audience some events are asking for
online newsletter are awesome. in the ecosystem. money from Founders. This
Founder, U.S. Operator, Europe should not happen.
Founder, UK
Important
• Go with an outcome mindset in such events and take notes of the top takeaways. Implement them.
• Attending many events without a plan will lead to exhaustion and frustration.
• Not all events are created equal. It is a good sign if fellow founders or investors recommend an event.

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What is this?
• If founders start raising when they need capital, it is already late.
• Especially for diverse founders who constantly find it difficult to raise capital, irrespective of the environment
• Hence, if you can - raise before raising. It means (1) anticipating your funding needs, (2) building network among
potential investors months/years in advance, and (3) keeping them informed via regular updates.
• Pitfalls - Investors don’t reply, and founder gets frustrated; Or founders can’t keep the interest alive e.g., no regular
communication
‘‘ Founders can gain better access to funding with diversity
‘‘
focused funds. However, if the cap table consists of
The best time to start raising was 'only' diversity focused funds, one might question 'why'
when you thought about the idea. and it can subconsciously become 'signaling effect' to
The next best time was yesterday. established VCs of emotional investing. It's a thought,
Raise Before Investor, Europe balancing act. So pick the best diversity focus investor
Raising who brings value beyond capital.
‘‘ This strategy execution should be tactful. Investor, UK/Europe
Don’t exhaust all your contacts without

getting any meaningful investor interest. ‘‘ Instead of a ‘spray and pray’ approach with investors,
founders should rst arm themselves with more knowledge
Investor, Europe about the investors and their investment preferences.
Founder, UK
‘‘ We participated in a ClimateTech
founder showcase. We didn’t win or
‘‘ I had no pre-built connections in the
investor ecosystem. So I used the ‘‘ Founders should raise from
investors who are best aligned
anything but we got contacts of all funnel system. On average, for
with their business idea and
angels who attended. We reached every 50 investors I reached out to,
personality. It’s a long-term
out and asked for their time, ca. 11 replied and 7 converted to
relationship. Fundraising shouldn’t
feedback. By the way we were rst time calls. When we actually
be an outcome of the founder’s
raising all this time. started raising, 3 did DD on us and
diversity alignment.
1 invested.
Founder, Europe Founder, U.S. Investor, UK

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What is this?
Largely supported by VCs (a) sector specific startups, or (b) focused on element of diversity e.g. female-only.
Example: Sie Catalyst (Link)
Support
How to go about it?
Programs
• Make sure to align your fundraising timelines to join this type of program a few months ahead of the fundraise to make
the most value out of the programs.
• Be mindful of which programs you attend and speak to past participants and other founders. Some programs only add
value with mentorship; others can truly move the needle for your fundraising and expand your investor network.
‘‘
What is this?
My co-founder has a doctorate. So, If you are eligible, government grants or perks from other
he knows well how to write grant associations are a must-have, especially in Europe, where grants
applications. We have survived on from organisations could be sizeable.
such grants, but they are insuf cient Grants
for our growth phase. How to go about it?
Getting grants is a challenging feat, too. First, ask around in your
Founder, Europe founder network. After getting inputs from various sources, file
for a grant. Once rejected, it can make it tough to get it.
‘‘ A VC organized a funding-
readiness program but did not
‘‘ Don’t paint founders with the same
brush. Some of us have little/no
‘‘ I didn’t opt for the incubator in my
city because it had just 5% females
follow up with any VC funding network and limited knowledge due in the program. I joined one in
commitment. It’s like stopping ten to our backgrounds. But VC event another town because it had a better
steps away from the destination. invites and outreaches are happening ratio. Besides family considerations,
There is so much advice but not more for those who already know what matters in my startup is the kind
enough capital. Founders need VCs better. There is a mismatch. of people I surround myself with.
who invest.
Founder, Europe Founder, UK Founder, Europe

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What is this?
In-person, hybrid, and online pitch events
How to go about it?

Pitch Events • Treat them as virtual playgrounds. Listen to a pitch and run a mental analysis. Try to answer the following
questions - What is missing in the pitch, and what could have been better? Note what you loved about the pitch.
• YouTube has numerous past pitch videos from accelerators, pitch competitions, etc.
• Search for terms like ‘startup pitch’ on Eventbrite, and you will see tens of online events.
• Also, attend international online events in your business area. Most have low or no fees for founders.
What is this?
Research is about maximizing awareness - what is missing in the market? What better can be done w.r.t
competition? How to develop one’s secret sauce? etc.
How to go about it? Research

• VCs announce their investments in new startups. Understand why and read their investment memo’s.
• Tools like Crunchbase has a huge list of startups and their funding - all updated regularly. If you don’t
have access, follow magazines/platforms like TechCrunch, EU-Startups (Link).
• Look at market maps and sector reports. Examples: Holon (Link), Dealroom (Link), CBInsights (Link)
‘‘ Five months before starting my

company, I attended every online
‘‘ Choosing the location of the startup
can also have an impact on the
‘‘ If only the startup team I chatted with
this month had researched the market
pitch competition, there was. I founder’s success. How is the well, they would have known there are
massively boosted my con dence in community in the city? Is it a melting already tens of climate analytics
pitching, and these pitch events pot of people and ideas? Is there platforms. Plus, they could have
became a way for me to do an open mindset? answered my question better - ‘What’s
competitor analysis. your secret sauce.
Founder, Europe Investor, Europe Investor, Europe

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Connecting BB approach with solutions
1. Sell it before you build it Founder Groups, Getting-Stuff-Done Groups, University Groups
2. Understand the market and the Startup Events, Pitch Events, Research, Educational Programs
alternatives
3. Understand what VCs look for Educational Programs, Founder Groups, University Groups, Ask A Mentor
4. Create better decks Pitch Events, Educational Programs, University Groups, Ask An Alumni,
Ask A Mentor,
5. Raise before your raise VC Support Programs, Educational Programs, University Groups,
Ask An Alumni, Ask A Mentor
6. Build your tribe Founder Groups, University Groups, Ask A Mentor, Ask An Alumni,

More quotes
‘‘ Every diverse founder I know has views on the topic,

but they either don’t get the right platform to voice
‘‘ Venture Capital is actually a simple business! Founders
should focus on their product and strive for PMF.
their thoughts or, more importantly - no platform is well Capital will follow. If founders listen to too much
designed for them to speak out openly without fear of advice, they forget to build.
repercussion. When one of us gets too frustrated, vent-
Founder/Investor, Europe
outs happen on social media. There should be a way of
resolution between those extremes.
Founder, Europe
‘‘ Geopolitical tensions shouldn’t come in between
‘‘
speci c topics like startups and diversity. If we are
Diverse founder-focused groups need to balance favouring/rejecting founders from a particular country,
discussions carefully. It shouldn’t become a bubble of we are just trying to close one diversity gap but
emotions and shouldn’t only be used to vent. opening up another discrimination angle.
Investor, Europe
‘‘
Operator/Investor, Europe
We don’t have an underrepresentation issue; we have
an underestimation issue. There is an unconscious bias
to underestimate diverse founders in achieving results
‘‘ Throwing money at the issue is not the perfect solution.
We need ‘Diversity’ in thoughts and minds.
at par with anyone else. We are not creating enough
data points. Investor, Europe
‘‘
Investor, UK
We need people like Michael Jackson (link) who have
‘‘ The media is glorifying unicorn founders. Stop building

with the sole aim of becoming a unicorn because many
a social media presence and don’t shy away from a
taking a critical view of what they see wrong in the
aspects, like luck and timing, play a role. Instead, we ecosystem.
Founder, Europe
should focus on building an ecosystem where we can
fail better.
Investor, Europe
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Investor Solutions
Following topics are covered:
1. ‘Cautious Care’ approach for investors

2. Investor solutions mapping
3. Solution descriptions
4. Connecting ‘Cautious Care’ approach with solutions
‘‘ We are all smart people. We know the solutions.

It’s not about any missing knowledge. But; are we
all accepting of diversity issues? Willing to solve it?
or, Are we even pushed enough to take action?
I don’t think so. We are too boxed in our
investment mandates.
Investor, Europe

Cautious Care (CC) Approach
In this report, a Cautious Care (CC) approach is proposed for investors

(Venture capital firms, Angels, Accelerators, etc.). After this, solutions for
investors are proposed. In the end, solutions are connected with the CC
approach to provide a wholesome 360 degree action plan.
Let’s explain what is CC approach:
1. Cautious: Be mindful of the hidden biases in different parts of the entire

value chain of a VC business. It included the deal pipeline, hiring process,
promotions, evaluation, and investment process.
2. Care: Provide meaningful value by supporting diverse founders and

investors in the ecosystem.
CC approach will not solve all issues but will likely improve the odds of
promoting and investing in diverse founders.

Investors Solutions Mapping
Awareness focus Action focus
1. Diversity Aware IC 11. Wider Adoption

Action
11 13 2. Compensation Equality 12. Investor Support Programs

3. Diversity Aware Pipeline 13. Diversity Focused Funds
12
14 16 1 4. Maximise Feedback 14. Diversity Quotas
3 5. Promote Incoming Talent 15. Support Diverse VC Investors
15 4
6. Training Programs 16. Founder Office Hours
18 7 8
17. Dedicated Person/Page
5 6
7. Portfolio Diversity Data
18. Dedicated Policy
17 8 8. Investment Diversity Data
10 9
9. Associations
2
10.Certifications
Awareness
‘‘ If you look inside many established investors, even basic de-biasing of the
investment process is missing. How do you expect to move the needle?
Investor, Europe

What is this?
Raise cognitive diversity of investment decision makers. De-biasing approach should aim to mitigate individual investment
committee (IC) member biases by curating standardised questions, insights and analysis through a rigorous process.
Diversity
Aware IC Draw inspiration from other asset classes were time and again research has proven that negative outcomes are associated
with conscious and unconscious biases.
Everyone likely struggles with biases, more often than not. An investor mentions an arrogant founder here - (Link). Similarly,
it is not difficult to get swayed away by emotionality, looks, and connection - all likely pitfalls for founders.
‘‘ Ecosystem has come a long way - from

‘No attention’ to ‘More attention.’ It takes
What is this?
Equality in compensation is not only for employees of VC firms
but also pushing equality in compensation inside portfolio
time, and then it happens very fast. But
companies.
w.r.t on-the-ground fundraising numbers, I Compensation
haven’t seen any meaningful difference Equality
Portfolio companies are more attuned to listen to investors.
pointing to any sort of signi cant change. Pushing for equality in compensation will make for a better level
playing field in the portfolio companies. It will positively influence
Founder/Investor, Europe
internal team satisfaction and startup business outcomes.
‘‘ How will diverse founders win

when late-stage VCs invest largely
‘‘ There is a pipeline issue. At pre-seed, most
startups don’t have many KPIs or traction to
‘‘ There are compensation
discrepancies for diverse
in repeat founders these days? show. Diligence, by default, hinges on folk in the tech and the
Most repeat founders are white evaluating diverse founders - which is an issue investor world. Full stop.
males. There is no winning circle in itself. It then exacerbates pipeline problems
for diversity here. as even less diverse founders reach later Operator, Europe
Investor, Europe stages.

Founder, UK

fi

What is this?
• A typical established pattern is investors selecting startups from their extended networks.
Diversity
• A practical approach could be to partner up with diversity-focused investors and see their deal flow.
Aware
• Another method could be consciously reaching out to lesser-known deal sources or becoming more visible on
Pipeline
social media to support diverse founders. Expanding deal pipelines enriches the inflow, increasing the likelihood
of funding them.
What is this?
• Investors have a startup funnel. Eventually, they only invest in ca. 1-2% of the deals they see. How
VCs look and interact with the remaining 98% of startups matters significantly!
• Expand the feedback funnel, especially for diverse founders, to 100%. Maximize
Impactful
Impact Feedback
An apt, insightful, and truthful feedback can work wonders for the founding team.
There is genuine apprehension on this topic as well (Link).
‘‘ I see upwards of 1000+ pitches a

year. That’s more than 2.5 pitches a
‘‘ Putting founders in categories is
an ‘effect’ of decision-making. It
‘‘ Founders crave genuine, tangible
feedback on improving their decks
day. It’s impossible for me to give might make it ef cient for some and pitches. Do they get it - No! Most
detailed feedback on each. There in the ecosystem, but it takes out times, they walk away with generic
should be a way through which VCs critical thinking to judge answers and rejections. Maybe we
can adopt a few diverse startups to people+opportunities effectively. don’t need more startups. Perhaps we
support. That could help. need to vitalize the startups we
already have.
Investor, Europe Investor, Asia Founder, Europe
fi

What is this?
Promote Three ways to effectively promote incoming talent
Incoming 1. De-bias hiring pipeline. A lot of content is available on how to do this well.
Talent 2. Train more diverse candidates via internships and residence programs.
3. Build and promote internal diverse candidates.
‘‘ VC is a challenging and competitive business. Not

all analysts will become Partners. There also
What is this?
• Training programs apply in general to all investors,
needs to be a higher self-awareness amongst VC not just diverse hires. It’s about training them on On-The-Job
employees. Many have taken over senior diversity-awareness topics or building their skills in Training
operating roles in startups. We need to make this practical investment analysis.
jump look and sound - ‘cooler.’ • Buddy systems, peer-networks, external coaching,
and certifications are excellent training forms.
Investor, Europe
‘‘ We are, by nature, global and

have an outward outlook. We
‘‘ Discussions on diversity are ongoing in
the VC ecosystem. However, execution
‘‘ Most VCs project diversity by
doing a lot at the most junior
balance men and women is missing or low. Too few female VC levels, think internships, analysts,
50-50 in ICs. We have made Partners who have check writing ability. etc. When we talk about
sure women are in leadership Plus, associates don’t have the power promoting to senior or partner
positions. We have a diversity- to push the deals through. levels, they have questionable
centric hiring process. performance.
Founder, UK
Founder, Europe

What is this?
Portfolio Establishing the baseline diversity data for portfolio companies can be very effective in pushing the topic
Diversity forward. To make this easy, include the ‘diversity data’ topic in initial discussions while investing in the
Data startup. Data examples: Hiring pipeline data, compensation data, and other abstract employee data like
gender, ethnicity ratios, etc.
What is this?
• Investors have a startup funnel and publishing data+KPIs on topics like diversity in startup leadership,
deal flow, and final investment portfolio diversity - is powerful data-driven approach to supporting the Investment
ecosystem. It can also become a strong pull for diversity-aware LPs. Diversity
• Uncovering data: Is this why women-led startups aren't getting funded? - Link. Frontline Link - as B2B Data
VC majority of deals they saw were not within their scope.
• Some examples to showcase: Link
‘‘ I’m nervous to ask my portfolio

companies about diversity KPIs
‘‘ If we peel the layers of underfunding, we
might uncover lesser-known reasons. We
‘‘ Data is becoming a powerful tool
for VCs. Tracking all kinds of data,
because I know not much is crunched our community data two years not just diversity, has a great
happening there. It’s a neutral back and realized female founders potential for us to differentiate and
topic for them, and I don’t want primarily build consumer-focused startups. add alpha.
to change that. I want them to However, VCs were funding mostly B2B Investor, Europe
focus on business. Enterprise SaaS.
Investor, Europe Operator/Investor, Europe

What is this?
Associations like the BVCA in the UK and NVCA in the U.S. have dedicated efforts to promote diversity in the startup and
VC ecosystem. NVCA also launched VentureForward non-profit, which organizes initiatives like LP office hours.
Associations VCs should aim to become part of diversity-focused founder associations, not only investor-focused associations. They can
closely work with them and join discussions to aid knowledge dissemination.
Joining discussions on various forums is just a starting point. Having a voice and opinion is next. Enabling employees to
speak up on the topic and voice VC firm’s thoughts effectively keeps the discussion going.
What is this?
• Getting certified in internal VC processes is another approach to aligning with diversity.
• Diversity VC standard (Link) is one such example. Then there is IIWC Investing in Women Code (Link)
Certi cations
which allows organisations to become signatories and embed certain standards internally.
• Maintaining regular dialogue with different VC firms can help establish best practices even without
certification.
‘‘ There needs to be more formal startup/VC

associations in Europe which also have a focus
‘‘ Certi cations and associations can be costly
endeavors for emerging managers. If there was a
on diversity. One can see positive movements as discounted option available, many would consider
discussions are increasing. But a long way to go. joining. Otherwise, it’s just an elitist VC play.
Investor, Europe Investor, Europe

fi
fi

What is this?
Looking at each country's fundraising landscape, we will see an overwhelming tilt towards one-or-few cities. The
same is the case with business areas in which investors are investing. There are specific 'hot topics' where most
like to invest, and the fight is on for the rest, e.g., while many investors focus on healthcare, FemTech needs to
Wider
get the focus it deserves.
Adoption
Widder adoption w.r.t investment thesis is an effective way to start capturing the edges of the issue. Example:
Instead of looking at FinTech alone, investors should begin exploring FinTech's intersection with ClimateTech and
promising startups in those areas.
What is this?
‘‘ Diverse founder funding is a systemic
problem. Diversity is people-oriented
There are multiple ways we can support investors
1. Nudging and supporting more diverse folk to become angels in
but this funding imbalance is structural. startups. Programs like ĀVA (Link), AngelInvestingSchool (Link), She Investor
We can’t just solve it by people calling Angels Series (Link), Black Venture Institute (Link), Fempire (Link) Support
2. Supporting diverse talent in the VC ecosystem to succeed. Programs Programs
us with different nouns, nor it can be
fully solved by trainings. We solve it by like IncludedVC (Link), Newton Program (Link), VC Include (Link).
3. LP education programs to make them aware of diversity and the
positive actions.
untapped opportunities.
Founder, UK
‘‘ Europe is about a decade behind the

U.S. and the UK on diversity. In
‘‘ Part of the LPs' reluctance is that
they haven't dealt with a diverse
‘‘ Due to lower tech salaries, there are
fewer angels in Europe. Compare a
Europe, we are mostly stuck on the geography or market before. But U.S. engineer's compensation and
‘Gender’ topic in diversity they won't know on their own. One personal spending with a European
conversations. Ethnicity and other part of the solution is - LP engineer. You will get what I'm saying.
issues are standing in the line way education, communication, and
behind. coaching. Investor, Europe
Founder, Europe Investor, UK

What is this?
Building a diversity-focused fund (centered on topics like female founders, immigrants, or geographical regions) can be an
effective solution to tackle one of the biggest challenges of the ecosystem - capital availability for diverse founders.
Diversity
Focused
A few points to think about and discuss are (a) Supply vs. Demand (how many diversity-focused funds are required to fulfil
Funds
the supply of startups); (b) Stage imbalance (most diversity-focused funds are smaller sized and focus on Pre-Seed/Seed
stage; leaving the fate of diverse founders, in the late stages, to established VCs); and (c) Signalling (having diversity-
focused funds on cap-table should signal strength of the startup and not emotional investing); and (d) Labelling (a diverse
founder seeking funding from diversity-focused funds should not be treated dismissively by other VCs).
‘‘ GPs need to resonate well with LPs for them to

receive funding. The issue is LPs might not
What is this?
Embedded within the investment thesis could be
diversity-focused quotas. They could be hard-coded Diversity
understand some of the diverse manager’s core
into the VC thesis with specific limits. However, to ease Quotas
business areas or geo’s. We need to have more
the implementation and to make a healthy start, such
discussions in conferences on such topics and
quotas can be established as softer-goal posts.
increase LP participation.
Investor, Asia
‘‘ Sometimes, asking LPs' capital for a

diversity-fund feels like charity. It
‘‘ The Venture Capital industry is on a
transformational path. Diversity-
‘‘ Quotas and diversity-focused
funds can become controversial.
shouldn't feel that way. One LP focused VC funds play a role in the Look at the current case of the
argument went like this - "The U.S. short-mid term because a section of ‘Fearless Fund’ lawsuit in the U.S.
VC I know has many top-tier founders strongly associate with this How should we, emerging
contacts, so why should I give you topic. However, many diverse managers, keep working
the money?" It's not an apples-to- founders don’t like to be labelled as effectively?
apples comparison. such.
Investor, UK Investor, Europe Investor, U.S.

What is this?
• Established investors have seen it and done it all. Supporting emerging managers with the knowledge and LP contacts
can go a long way.
• Many VC investors also invest in new and upcoming managers (as LPs) - referred to as Seeding. It is a way to capture
Support
broader deal flow and supports developing a more diverse ecosystem.
Diverse
VC Investors
Collectives: This is a newer trend where VCs (including emerging ones) come together to build a collective. Submitting
deal/startup to the collective means, deck is presented to all VCs in the collective. Example: SeedChecks (Link). Suggestion
is to form similar collectives for diversity-focused VCs. Combining forces and sharing resources with other investors is a
great way to attack funding issues for diverse founders.
What is this?
More and more investors are holding office hours to educate and support diverse founders. Founder
The momentum behind such an initiative is enormous. Typically, one session can be dedicated to a single Of ce
founder topic, and participants can be asked to send questions in advance. If possible, do recordings. Hours
Experiment with office hours on social media platforms to see what gets the most attention.
‘‘ The rst believer in my Fund 1

was another established
‘‘ We VCs keep repeating the same ‘‘ Some VCs want to support with stuff
basic fundraising and startup stuff on like ‘female-founder-hour.’ It’s a step
investor in the ecosystem. He social media. It’s actually crazy how in the right direction with much
invested in me and gave me common it is among investors. Worst - potential, but it isn’t happening
contacts for other LPs. It was a still, so many founders make the same effectively. For example - there is no
perfect start to my VC journey. basic mistakes. This is beyond my follow-up mechanism, and advice is
Investor, UK
comprehension. sometimes generic.
Investor, Europe Investor, Europe

fi
fi

What is this?
• Since diversity is a crucial topic, it makes sense for bigger VC investors to dedicate a contact person on
the topic. Founders can reach out for more than just fundraising questions. It doesn’t need to be
Dedicated
someone dedicated full-time; instead, someone in the team who is enthusiastic to work on the topic
Contact
along with the founders.
Person
• The key is to enable this dedicated person with a central repository of all perspectives aligned to one’s
VC firm. It could include answers to common founder questions, documents, links to top resources,
templates, and more.
What is this?
• Having a dedicated person is a good start and could be a stepping stone to building a dedicated
diversity policy for one’s VC firm. Diversity
• It helps in setting clear guidelines and processes internally. It also acts as a good talking point with Policy
diversity-aware LPs.
• Example: 2150 (Link)
‘‘ Setting up a central knowledge repository was a good

value-add for us. Topics like - What does my VC rm
‘‘ Let’s start with a simple task. Let’s all publish our internal
diversity policies publicly. If someone doesn’t have it already,
stand for? What are our thoughts on important issues then create one. It will be a game-changer.
like fundraising? - are all captured.
Investor, UK Investor, Europe

fi
Connecting CC approach with solutions
1. Cautious about diversity in deal pipeline Diversity aware pipeline, Maximise Feedback, Training Programs,
Dedicated Person/Page, Dedicated Policy
2. Cautious about diversity in investments Diversity aware IC, Investment diversity data, Training programs,
Promote incoming talent, Certifications
3. Care by supporting diverse founders Wider Adoption, Diversity focused funds, Diversity Quotas,
Dedicated person/page, Founder Office Hours, Dedicated policy
4. Care by supporting diverse investors Support Diverse Investors, Investor Support Programs,
Associations, Portfolio diversity data
More quotes
On - LP speci c topics
On - startup selection
‘‘ VCs receive pitches all the time. Diversity is not the ‘‘ For LP’s, one issue of investing in "diverse" managers is they
can't conceptualize it if they can't visualize it. One solution is
primary reason for rejection - likely, it’s others like to make more LPs. That's what's started to happen with new
PMF, FMF. However, I do think there is unconscious Angel training programs.
bias at play. Example: A VC who has never worked Investor, U.S.
with a female CEO might not see an all-female-led
‘‘
startup favorably. The key to this is more multicultural
investing teams. LPs are the key to solve for the diversity topic. And all GPs
Investor, UK listen to LPs - that’s the key. LPs can also back micro
‘‘ Founders are getting rejected in fundraising left and

right in the current environment. Diverse founders are
managers or emerging managers who are focused on
investing with a diversity lens.
Investor, UK
impacted hard, but I don’t think diversity plays much of
a role in the challenging environment. I have rejected
‘‘
many white-male founders. Investors are just trying to
protect their a**es. There is extra focus on diverse emerging managers. If one of
Investor, Europe us makes a small mistake or underperforms, the bullet is shot
on all of us. The stakes have become much higher for us to
On - removing bias in investment analysis deliver.
Investor, UK
‘‘ Anonymized pitch decks or using AI to score decks are
‘‘
a few ways to remain objective when assessing diverse
founders. Impact, investing, and returns can go hand-in-hand.
Investor, Europe
Investor, Europe
‘‘ Remove bias in investing by focusing on founders'

updates for the last 12 weeks. Check the quality of
updates and KPI growth. Hide names!
fi
Startup Employee Solutions

• It is what it sounds like - do in-depth research before interviewing for a startup or taking a job in a new country.
Research • De-bias your thoughts. ‘Grass is not greener on the other side’ - don’t just look at the positive future outcomes.
• Before accepting, talk with at least six+ people (e.g., from the startup, industry, country ) about the new role.
• Prepare well for your interviews. Don’t forget to prepare for salary negotiations.
• Look at comparable salaries. There are a lot of data points available now via companies like - Prepare
Figures Syndio OpenComp Comparably getagora.com comprehensive.io Salary.com
‘‘ Many of us in the engineering and

tech ecosystem continuously undersell
‘‘ If you audit the corporations,
you would 100% see salary
‘‘ To grow our Tech ecosystem, we must
make it easier for foreign talent to nd
ourselves in salary negotiations. discrepancies for diverse and get jobs. One way to bring that
There is a cultural aspect to it - do employees. Extrapolate the change is to speak ‘English.’ It’s more
more with less. same for the startup world. inclusive and global.
Operator, Europe Operator, Europe Operator, Europe
‘‘ I have talked with many IT ‘‘ My rst job offer was considerably ‘‘ The tech hiring ecosystem in some
engineers. Their rst argument for less than what my other university regions is slow-moving. It isn’t easy to
shifting to a new country/region - is friends were getting. I had to shift quickly. I’m forced to be nice to
higher GDP. What will GDP do if accept just to survive. my toxic boss, fearing not getting my
you can’t grow at your job? next job or a bad recommendation.
Operator, Europe
Operator, Europe Operator, Europe

fi
fi
fi

Media Solutions

Articles on diversity should be more frequent. Increased media coverage from different angles can generate
critical awareness. Media should cover not just the ‘fundraising numbers’ or present a rehash of a report.
Write More
Some ideas - monthly digest on conferences, pitches-deadlines, diversity-focused events, etc. Monthly
highlights of 50-100 diverse founders. Monthly highlights of 50-100 startups run by diverse founders.
Few suggestions on ‘going beyond’

• Instead of publishing an article about 25 active female business angels - Why not list the top 250
female investors? Go Beyond
• Instead of writing just a short background on 30 angels in ClimateTech - Why not write about their
latest investments? What do they look for in the investments? How do startups reach out to them?
Highlight • Highlight angels and investors who are ‘hidden champions’, i.e., active and helpful, yet hidden from the limelight.
What’s • The ‘long tail’ impacts diversity positively. That is where the real value-add lies. Sometimes, the angels investing
Hidden 5K support the startup much more than others investing 250K.
‘‘ Often, only the portfolio startups from top VCs or

startups with ‘right’ connections are featured in
‘‘ Similar, diverse angel faces are at the top of the
investing lists every year. Their efforts are welcome,
media articles. That one startup in London is not the and it is easier for magazines to highlight them. But I
only one working on ClimateTech analytics; there know so many founders whose decks and emails don’t
are 20+ others. Sorry, but this is paid advertising. get a response from these angels.
Founder, Europe Investor, Europe

Government and Industry Association Solutions

Like many examples in the past have shown, right nudges or mandatory requirements enforced by the governments can
pull industry together and move it forward in a set direction. Reporting is a key element of this strategy.
Governments are cognizant of the diversity topic - EU report (Link, Link), UK committee (Link). There is also a precedent on
Reporting
enforcing reporting regulations - EU corporate sustainability reporting (Link). Combining the two, pushing, especially the
LPs who are institutional investors and professional investors, to report diversity data will result in a cascading positive
downstream effect.
While government actions typically take time, associations need not sit on the sidelines. They can push
for a ‘Guideline’ adoption and enforce it among its members.
With a certain level of willingness, such an approach can be implemented shortly, as there are existing Guidlines
examples to draw inspiration from. Example: United Nations PRI’s Asset Owner Charter Toolkit (Link).
There are also others like Finnish Venture Association (Link).
While reporting and guidelines are nudges towards diversity outcomes, capital injection is a concrete action example.
Such government initiatives are late-stage focused Link. To solve for diversity, the answer lies in the early stages.
Capital
Being primarily early-stage focused and more diversity-aware, emerging managers can be supported via. allocating initial
anchor LP capital. This unlocks the formation of more startups from diverse founders, increasing their likelihood of making
the deal pipeline healthier and more robust for later stages.
‘‘ Our industry is lazy. Investors are lazy. Tell me,

when was the last time any investor was happy with
‘‘ Most organizations (trade associations, non-pro ts, communities)
focused on increasing access to capital for historically marginalized
the increased workload? No one likes the extra leaders in asset management are in the process of compiling data
burden of reporting. Now, think about the ‘carrot and resources on their demographic and/or asset class, a much-
vs. stick’ analogy. Governmental and LPs’ push is needed exercise. There is a tremendous need to centralize this data
the best ‘stick’ approach. ‘Carrot’ isn’t compelling and reshape the learning process for advocates, accelerating the
enough—harsh reality. unlock of leverage, capital, and impact. Operator, U.S.
Investor, Europe
fi

Future

Six Intriguing Solutions
Awareness shift Capital answer

Diverse founders need to shift increasingly to awareness Most emerging managers focus on niche strategies and are
solutions. Following a 'Build Basics' approach and taking a diversity aware. However, emerging managers often face
knowledge empowerment route is one of the best ways to challenges starting up their business. A governmental
increase the odds of one's startup success. initiative to allocate capital (EUR 1-5mil per fund) to
emerging managers as an LP (either directly or via FoFs)
could significantly boost and usher in a new era for startup
Adopt hidden champions buildup.
Investors often focus on the top of their funnel. However,
many diverse founders, albeit having solid business cases,
need more feedback and support to level up their pitch. ‘Elder sibling’ effect
When VCs adopt a few such startups from their pipelines, Instead of looking at emerging VC managers as a
they create an effect that positively impacts fundability. Treat competition, established managers should instead build a
such diverse startups as hidden champions and support them healthy and mutually beneficial relationship.
to shine. How? Regular discussions, knowledge sharing, deal flow
sharing, LP intros, Seeding (invest in emerging managers).
Collectives
Collectives is a simple yet innovative way to accomplish many Publish diversity policy
objectives. For example - building VC collectives of diversity- A big unlock is being transparent on diversity topics -
focused investors can solve a significant issue for founders of internally and externally. One way to do that is by publishing
warm intros. Collectives can also help share VC resources a diversity policy. Such a policy can build clear guidelines,
amongst many investors, creating synergies. capture essential ingredients of investment processes, and
become an internal north-star to guide the actions forward. It
also acts as a good talking point with diversity-aware LPs.

Looking Forward
This report raises many questions that are worth Another vision is to publicly track the progress on the ground
pondering over. For example, the talks around the for all the solutions mentioned. It requires thinking about a
‘Signalling’ topic in cap-tables and ‘Labelling’ thoughts methodology to capture and highlight such ecosystem
among founders. On the VC fund side, questions like - changes. Is it a tech tool? Is it a blog? Is it just social media
How can we better support the growth of emerging updates? All is still undecided. However, there was an
managers? Should there be a push to build diversity overwhelmingly positive response to the report, and the
quotas in established funds? And many more. Hopefully, interviews were conducted until the last minute of the cut-off
the upcoming discussions in the ecosystem via date. There is an opportunity to widen the scope and add
conferences and panels can start to capture these. more voices to this collaborative report.
The report has been built on agility principles, and the To everyone who discussed the diversity topic while
final product is a deck that, by default, is ‘dynamic.’ It writing this report, took time out of their busy schedules,
means there is scope to update the deck as and when opened up to share deep emotions on the issue, and
required. Examples: typo = deck updated, new data = genuinely shared a passion for changing the status quo - A
deck updated, awesome suggestion = deck updated, new BIG THANK YOU!
feature = deck updated.
The door is always open for feedback to improve this report.

Appendix
Methodology
In writing this report, a personalized interview approach was taken.

It differs from the survey-based or data-driven approach, where
respondents' answers or transactional data underpins the study's
outcomes. At the same time, such survey/transaction-based
reporting style effectively answers the 'WHAT' question of diversity,
though 'HOW' is not thoroughly covered.
Next, interviewees are kept anonymous to empower them to

express their real emotions. The belief here is that the ecosystem is
'heard, but unseen,' i.e., generally, we understand and hear the tricky
corners of the diversity issues, but it remains largely unpublished.
Common starting questions asked during the interviews: (1) What

positives do you see in the ecosystem w.r.t. diversity? (2) Is diversity
becoming dismissive for investors? (3) Is allocating capital specifically
for diversity, effective? (4) Share your diversity-related experiences.
This report is an outcome of 38 interviews/discussions. All

interviewees are considered diverse in the context of this report.
Although detailed data is not captured, - initial tentative splits are
80%-20% EU/UK vs. U.S. interviewees, 70%-30% female vs. male
interviewees, and 50%-40%-10% investor vs. founder vs. operator
interviewees. Due to the constraints of personalized interview
approach, the focus was limited to the U.S., Europe and UK
geographies only. ‘Investor’ is a catch-all term used for VCs, angels,
accelerators. ‘Operator’ is a catch-all term used for startup
employees, association leaders, etc.

Appendix
References
What - Slide Why - Slide

1. Report - The Funding Divide (Link) (Dropbox Descend) 1. Magazine - HBR - The other Diversity Dividend (Link)
2. Report - Extend Ventures (Link) 2. Report - McKinsey - Underestimated start-up founders Link
3. Report - McKinsey - Underestimated start-up founders (Link) 3. Report - Illumen Capital & Stanford study (Link)
4. Article - Sifted - VC diversity needs to change (Link) 4. Blog - Forbes - Diversity: The Holy Grail Of Venture Capital Link
5. Article - Wired (Link) 5. Report - Illumen Capital & Stanford study (Link)
6. Article - PrivateEquityReview & Morgan Stanley report (Link) 6. Article - Kaufmann Fellows (Link)
7. Report - Diversity VC - The Equity Record (Link) 7. Guest Post - Reggie Tucker - Crunchbase (Link)
8. Article - QZ magazine (Link) 8. Blog - SpinLab - Why Do We Need More Diversity In Venture Capital (Link)
9. Report - BBG on Seed funding to underrepresented founders (Link) 9. Deloitte report - VC Human Capital Survey (Link)
10. Report - Deloitte - VC Human Capital Survey Link 10. Article - Gartner - Diversity and Inclusion Build High-Performance Teams
11. LinkedIn post - Ilya Strebulaev (Link) (Link)
The Diversity Puzzle - Slide Photos

1. Article - PitchBook data for 2022 & TechCrunch article (Link) Page 1 - Photo by Meagan Carsience on Unsplash
2. Dashboard - PitchBook (Link) Page 4 - Photo by John Schaidler on Unsplash
3. Report - The Black Report, 2020 (Link) Page 11 - Photo by Jaime Lopes on Unsplash
4. Report - State of European Tech, 2022 (Link) Page 12 - Photo by James Sullivan on Unsplash
5. Article/Survey - Startup Genome, 2023 (Link) Page 25 - Photo by Nakaharu Line on Unsplash
6. Report - KaufmannFellows, 2020 (Link) Page 26 - Photo by James Sullivan on Unsplash
7. Report - Unconventional VC, Data based on 2022 (Link) Page 39 - Photo by S O C I A L . C U T on Unsplash
8. Article - Crunchbase data for 2022 & Businessinsider article (Link) Page 41 - Photo by George Pagan III on Unsplash
9. Article - Sifted & European women in VC report (Link) Page 43 - Photo by Jason Leung on Unsplash
10. Article - Women in VC report 2020, Forbes article (Link) Page 45 - Photo by Frederik Löwer on Unsplash
11. Article - Crunchbase data for 2022 & TechCrunch article (Link)
12. Article - Forbes, BLCK VC report 2022 (Link)

Diverse by Default - Public v1

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A collaborative report

Diverse by Default September 2023

About What Why How Future

About this report

Thoughts have been put together carefully, though there is no

About What Why How Future

‘‘ Maximum efforts in this

Diverse By Default | Page 3

‘‘ One of the issues is that the de nition

Investor, Europe Investor, U.S.

Diverse By Default | Page 4

About What Why How Future

Many reports and articles have been

Whether we look from the angle of

diverse founders and diverse investors. 4

Data providers, investors, and tech

undeniable numerical data on diversity.

There are limited additions in this report

Diverse By Default | Page 5

About What Why How Future

The Diversity Puzzle

Startup Funding Startup Founders VC Funding VC Investors

1.9% = Women-only led 15% = Tech startup founders 5% = VC partner investors

1 5 7 1% = capital managed by all- 9

are women women GPs in Nordics are women

Startup executives=2.1% Black

11 1% = Black-founded 6 8 2% = raised by Black VCs 11 < 1% = Black VC investors

3 88% = self-funded Black- 12 54% of Black VC partners did

4 0.7% of total unicorn 4

Diversity discussion is too disparate!

About What Why How Future

'What' often leads to 'Why.'

Again, much research has been done that

in better outcomes - for our communities,

We couldn't have done a more value-adding

(a) Diversity Mapping: After acknowledging

the diversity mapping.

(b) 3-tier framework: connects different

Diverse By Default | Page 7

About What Why How Future

Hypothetical case - An established VC Hypothetical case - A diverse founder

The graph above is an illustrative view. Diverse By Default | Page 8

About What Why How Future

One word - ‘pragmatism.’

When we align ourselves to extremes, it is unlikely to leave Diverse By Default

What does ‘Diverse By Default’ path mean?

Previous hypothetical case - An established VC Previous hypothetical case - A diverse founder

The graph above is an illustrative view. Diverse By Default | Page 9

About What Why How Future

Solutions: Awareness Action

The graph above is an illustrative view. Diverse By Default | Page 10

About What Why How Future

Following topics are covered:

1. ‘Build Basics’ approach for founders

‘‘ The rst piece of advice I give founders is to learn

Diverse By Default | Page 11

About What Why How Future

Build Basics (BB) Approach

* Suggestion to include from an interviewee Diverse By Default | Page 32

About What Why How Future

Founder Solutions Mapping

8 Awareness focus Action focus

10 1. Founder Groups 8. Raise Before Raising