Diversity is good, diversity is essential. For business, for investors, for everyone. It’s something we can all agree on, but it’s not gonna fix itself. Together with the NOM and Founded in Friesland, Founded in Groningen hosted a Fundright event last week, to discuss real steps towards a diverse startup ecosystem in the Northern Netherlands.
The numbers don't lie. They are shocking, however. Only around 1.6% of all investments in Dutch startups go to female founders. The NOM portfolio unfortunately isn’t exactly a picture perfect example either, with a percentage hanging around ten. This is striking, especially when you realize that female entrepreneurs have proven to achieve better results. By far the most investment money goes to white male founders. And that's not only because they are in the majority, especially in the scene of technology-driven startups.
So the question that arises: how is this possible? During the Fundright event, an attempt was made to formulate answers to this, as well as to the logical follow-up question: what are we doing about it? In a digital event - forced by the circumstances - experts, by trade and experience, shared their stories and entrepreneurs, stakeholders and investment managers discussed the theme of diversity.
To measure is to know
In order to tackle a problem, it must first be defined. So let’s look at the numbers, which happens to be the specialty of Agnes Koops, member of the Board of Directors of PwC, who is also a champion of diversity and inclusivity in the workplace. "The raw numbers are a means of conversation, they are a mirror", she said during the event.
“We saw within PwC that white men scored higher in evaluation interviews and which made for a faster career track. Those figures were the turnover to start a turnaround. Training, courses, meetings, all to draw attention to the problem and ultimately make diversity and inclusivity part of our culture. And it's not just about women, but also about people with a different culture, with a disability, about everyone actually."
That is not just an example, it is an important piece of advice. “If you want to tackle this problem, you have to pay constant attention to it and take it seriously. View the numbers and set targets where those numbers should go. That's the way to force change."
Increase in awareness
Speaking of the numbers, 60 percent of the funds affiliated with Fundright consist of purely male boards. "That is better than average, but not worth celebrating yet," said Constantijn van Oranje. He is a special envoy to startup accelerator TechLeap, one of the initiators of Fundright.
He’s clear about the importance of more diversity. "Diverse teams perform better because they have a broader view of markets and services." And there is another very important argument to drive diversity. “In the tech sector we need top talent from outside the Netherlands. Without an inclusive culture, that talent is less willing to come."
After one year of Fundright, Constantijn is able to draw a few preliminary conclusions. “People seem to better understand the importance of diversity. I see the Black Lives Matter movement as a confirmation of that. It’s now up to us to continue to propagate that importance and to act accordingly. And we have to remain in continuous dialogue with the portfolio holders within the movement.''
Shout it from the rooftops
To go a little more in-depth, various round table discussions took place during the online Fundright event. For entrepreneurs, for fund managers, for stakeholders. To start with the latter, the realization that diversity matters seems to have set in considerably.
Not that the work is finished with that, of course. No, we need more data to hit investors with. And then take a positive approach to the issue. No punishment for those who do not participate, but a reward for those who do promote diversity. By the way, that reward already comes in the form of better performing companies.
And at the same time, we need to work on the supply side. In other words, how do we ensure that more women and people of different backgrounds, or people with disabilities, get in the position of needing an investment? That is something these stakeholders may be able to contribute to. By education, by shouting from the rooftops how important it is, by giving examples and role models a platform.
Beware of the token bossbabe
The key question is: where are those enterprising types who do not meet the description "man and white"? At the round table full of entrepreneurs, people wondered whether it is perhaps the case that enterprising women and representatives of minority groups take too little step towards financing. And if so, what do we do about it?
Perhaps it’s time to focus more on explaining how investments work, to lower the threshold. And along those lines: is there a list of potentially interesting investors in the North? There must be an easier way to find them. Conversely, atypical entrepreneurs could also make themselves more visible.
Something that female entrepreneurs shouldn’t fear at least, is feeling like an excuse or token bossbabe when they’re appointed or hired. Diversification has to start somewhere and if you weren’t up for the job, you wouldn’t have been hired in the first place. Diversity will have to embed itself into the DNA of companies, especially including the HR department.
Investors are opening arms
For investors, the group that the Fundright campaign is essentially aimed at, it is essential that other types of entrepreneurs come forward too. Because investors see the added value of diversity, on the other hand they also see that the vast majority of their entrepreneurial supply is male and white.
Makes you think. How is it possible that half of an economics classroom consists of women, while later only ten percent of them turn to investors for venture capital? Are they more insecure, more risk-averse? Or are we not looking well enough? Extensive research should be done on this. And in the meantime, it’s up to the investors themselves to open their arms and communicate widely that they are very happy to help entrepreneurs of all kinds. Gladly even.
To be continued
There are many sides to this topic. So many in fact, that a two-hour event cannot be more than a start to tackle the problem. The number of questions still exceeds the mountain of answers. That is exactly what the Fundright event is intended for: inventory, discussion and sharing. And now let’s get to work and make the entrepreneurial Northern Netherlands more diverse.
Organizer NOM will lead by example in this regard. They have already set the goal of appointing at least thirty-five percent women within their own ranks, and are now also looking closely at their participation to formulate the same kinds of goals that go beyond just the male-female ratio. Everyone in the entrepreneurial landscape needs to be aware of the importance, keep looking at it and find solutions. That’s in all of our best interest.
NOM director Dina Boonstra summarized the afternoon nicely. “We have a task to continue to draw attention to diversity. This is certainly not the last time you heard us talk about it. " So to be continued.
Photo courtesy of the NOM/Shutterstock