Five steps investors can take to support more diverse founders

Despite growing calls to create a more inclusive venture capital ecosystem and remove the barriers to entrepreneurship, only a fraction of funding is raised by founders from underrepresented communities.

The first step towards change is quantifying the challenge. While in-depth research has been conducted about women founders and founders from ethnic minority backgrounds, data has never existed about tech founders from the LGBTQ+ community—until now.



Sarah Finegan

Sarah is an investor and Portfolio Director at Antler. She recently moved to London from Berlin, where she was a key part of Antler’s operations in DACH & Eastern Europe. Sarah brings experience from her previous roles in finance, early-stage technology companies, and venture capital, and is an avid sports fan and world traveller.

Sarah is an investor and Portfolio Director at Antler. She recently moved to London from Berlin, where she was a key part of Antler’s operations in DACH & Eastern Europe. Sarah brings experience from her previous roles in finance, early-stage technology companies, and venture capital, and is an avid sports fan and world traveller.

To share deeper insights on on LGBTQ+ founder and investor experiences, Proud Ventures—a UK collective of investors, exited founders, angel investors, and venture capitalists that is building a community and offering support for LGBTQ+ investors and founders—has published The State of the LGBTQ+ Founder Funding: An Uncomfortable Truth, the first-ever data set on UK LGBTQ+ investors and founders. Antler is proud to support Proud Ventures and I was honored to contribute to the recommendations in the report. 

The report reveals findings including:

  • 75% of LGBTQ+ founders reported concealing at points their identity from investors.
  • Just one-third of investors who said they were taking action to support “diverse” founders were doing anything to support LGBTQ+ founders.
  • One-fifth of LGBTQ+ founders thought that sharing their identity would harm fundraising efforts
  • Lesbian founders raise 22x less than gay founders
  • 79% of LGBTQ+ investors sometimes hide their identity from others in the industry

In addition to shedding light on the main barriers underrepresented groups face in raising capital, the report outlines five key recommendations for investors (set out below)—steps they can take immediately to embrace diversity and start engaging with the full breadth of exceptional founders raising growth capital. 

Here are my thoughts on the five recommendations and steps investors can take today:

1. Quantify DEI metrics within your portfolio

The first step is measurement. Without metrics, it’s impossible to implement effective inclusion strategies and quantify change. Every investor should benchmark and track diversity metrics for their portfolio companies to understand the diversity of founders and their teams. 

Measuring diversity can sometimes stop with visible diverse groups. It is important to extend the conversation by offering initiatives such as sponsorship and mentorship to non-visible forms of diversity, including LGBTQ+ and socio-economic diversity. 

Zenith Capital, an early-stage venture capital firm investing in the Nordic tech scene, embeds diversity in its DNA, driven by its DEI metrics. They create tailored KPIs to report metrics such as team composition and work with portfolio companies to set their own diversity measurements as part of their 100-day plan.

2. Appoint a D&I champion

While diversity and inclusion is everyone's job, every firm should appoint someone with a mandate and accountability for implementing change—a D&I champion. This sends a clear and powerful signal to underrepresented founders: there is someone within the firm who sees you and is actively fighting for you. The champion also tracks metrics—if numbers show the portfolio is homogenous, they can use that evidence to demand the firm does something about it.

3. Educate and train all staff

Investors need to be aware of their unconscious biases and actively work to eliminate them. Unconscious bias training for the full investment team members should be introduced by senior leadership. One of the most effective things the LGBTQ+ network at Goldman Sachs introduced was firmwide LGBT training, including the "Straight Talk" initiative. Senior leadership delivered workshops where scenarios were discussed and misconceptions were challenged. Suddenly, the entire company was talking about diversity and real change started to happen—many MDs voiced their support and in some cases, individuals actually came out to their team and clients. 

4. Introduce internships and mentorship programs to diversify the talent pipeline

Begin to change the narrative by breaking the tried and tested way of hiring. Look beyond the traditional Oxbridge and Ivy League candidates for intern and analyst roles. Investors should be proud of the socio-economic diversity of their teams and need to be actively engaging underrepresented communities to explain why venture capital is a career option for them. 

Oliver Beach, the founder of Hyphen, a platform enabling lifelong learning and development at work for the next generation, says truly diverse companies create more equitable opportunities, such as paying for interview tasks during the recruitment process so candidates aren’t excluded on grounds of their financial situation. 

5. Make underrepresented groups visible in all areas of the firm

Diversity needs to be visible at all levels in the firm and this can be achieved by building a holistic diversity strategy that spans the entire investment process. 

Signaling a safe environment is essential to attract and retain diverse employees (including leadership roles) which in turn can attract diverse founders and demonstrate that all belong in the VC industry. 

It could also include firms finding vocal partners supporting as allies, or hosting events or publishing reports shining a light on different communities, and regular social media posts expressing support of key annual milestones (e.g., Pride Month and International Women’s Day).

Investors should also be mindful of the barriers they establish at the outset of their interactions with founders—from the language they use on their digital channels and the pronouns partners use to the way biographies are written, for example including affiliations with underrepresented communities or listing the diverse investments they have made. 

From small steps to a wave of change

The investment industry has made remarkable progress on inclusion in recent years, but this progress is fragile and incomplete.  

These five recommendations and associated steps are just the beginning—and there is no reason every investor could not introduce them right now and help change the industry. After implementing these fundamental best practices, long-term strategies include committing a proportion of investment into diverse founders and implementing scouting strategies to engage non-traditional communities.

If we can inspire this type of change at scale, then we’ll finally start to see a more equitable deployment of growth capital backing a flood of diverse founders scaling a new generation of leading companies. 

Read Proud Ventures’ report, The State of the LGBTQ+ Founder Funding: An Uncomfortable Truth.

Read Antler’s Diversity & Inclusion Policy and our 2022 ESG and Impact Report, making the case for the tremendous investment value of diverse teams.

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