Treasury Committee VC Report cites ‘Unacceptable Diversity Stats’

By Gabrielle Morgan, Investment Manager

It comes as no surprise to read, yet again, about the pervasive lack of diversity in venture investing in the UK. It is the inevitable outcome of an industry where decision makers are overwhelmingly white, male, attended elite universities and from higher socio-economic groups. There’s no way we’ll move the needle if only white men are reviewing investment opportunities. If you haven’t had a chance to read through the Treasury Committee’s latest Venture Capital Report, here is their grim assessment on diversity in VC:

“The diversity statistics in the venture capital market are unacceptable. Venture capital firms are dominated overwhelmingly by white men, and the recipients of venture capital funding are even more unrepresentative of the wider UK population in terms of gender and ethnicity. While there has been some improvement, it is happening far too slowly, and affecting rapid change should be viewed as a priority by government and industry.”

At the Conduit Connect, we are constantly reflecting on our diversity policies within our own team, our venture partner group and investment committees, and of course, in our diligence process and portfolio companies. We are not perfect – we aren't even nearly perfect, but we are making significant strides and holding ourselves to account.

We have 50/50 male/female gender representation on our investment team. The Conduit EIS Impact Fund’s investment committee is 40% female and 30% ethnic minority backgrounds. Our newest cohort of Venture Partners is 40% female.

As you’ll see in our upcoming impact report, we have recently updated our own impact screening framework to include an ‘Impact Integrity’ section where we assess companies based on their commitment to diverse leadership and ownership, climate-positive business practices and fair and safe work policies. Our impact screening framework is open source and available to all investors and entrepreneurs in our network – here’s a simplified version below. If you’d like a copy of the full framework, please let us know.

In addition to our own process, we believe it’s critical to educate and empower investors to prioritise diversity in their own journeys. Last year, we launched the Generation Impact Academy, and have taken 40 students through the 3-day course to-date. Over 60% of our students to-date have been women. A key focus throughout the course is how to integrate diversity and inclusion into deal selection and diligence. Thank you to the investor experts who have joined the programme on this topic, including Emilie Bellet of Vestpod, Nelly Lavielle at Bethnal Green Ventures, and Gosbert Chagula of Start-Up Discovery School. The next Generation Impact Academy is taking place in November, 2023. Get in touch with alicia@theconduitconnect.com for more info.

Finally, we have industry busting gender diversity stats in our Conduit EIS Impact Fund LP base: over 30% of the fund’s investors are women, even though only 15% of angel investors in the UK are women.

Thanks in large part to these deliberate efforts, we’re proud that 40% of our Conduit Fund Portfolio companies have at least 1 female founder and 17% have at least 1 founder from an ethnic minority background. We recognise that bias exists far beyond gender and ethnicity. While there is limited data available it is clear that LGBTQIA+ groups, and people with both visible and invisible disabilities, are underrepresented both in investment teams and as VC backed founders. We are want to hold ourselves to account on these areas of identity too – with recognition that these aspects of personal identity may be sensitive, and no founder should be required to ‘out’ themselves as part of an investment process. Any investors also thinking about these issues – we would love to collaborate and share ideas. Looking ahead, we also recognise that we need to diversify the geographic location of our pipeline and portfolio, i.e. more deals based outside of London.

There is still so much to do, and we’re grateful for the innovators in the industry pushing for change including Amina Ahmad at Diversity.VC, who is helping venture funds work towards embedding diversity into term sheets, Rodney Appiah, MD at Cornerstone VC, for building a diversity led fund and advising us as a board member, Julie Blane for building support of female climate founders through the Sustainable Women’s Network, and so many others.