Ranked 4 out of 14 actions
Venture capital firms should participate in industry-wide surveys and make diversity data on their investments public.
Overall effectiveness: Medium
By raising greater awareness of the issue of diversity in venture capital, this action has the potential to deliver notable
All venture capital firms
Relevant investment stage
Seed, venture and growth
Ease of implementation
Hard – this would require collecting additional data to capture diversity characteristics, and regularly report on this.
It is important that this action is supported by meaningful change; this action is unlikely to be effective on its own.
Perceived effectiveness score 1 = Least effective, 5 = Most effective
Findings by entrepreneur characteristics:
- Venture capital-backed/venture capital-ready: No major variance observed.
- Gender: A higher proportion of females (69%) than males (57%) said this action is effective.
- Education (socio-economic): No major variance observed. –Ethnicity: No major variance observed.
- Ethnicity: Ethnic Minority respondents were more likely to say this action was effective (73%) than White respondents (59%).
- Age: A significantly lower number of respondents aged 40-49 said this action is effective (35%), in comparison to respondents aged 20-29 (86%).
Venture capital firms’ feedback:
The majority of venture capital firms considered this to be an effective way to secure commitment to improving diversity, through regular monitoring and tracking.
Better evidence and understanding of the issue, through the publication of findings from industrywide surveys, could also promote further action.
For this to be effective, it needs to be backed by tangible action, or else it risks simply being virtuesignalling.
- The evidence on this action was relatively weak. Five papers were identified; four are primarily authors’ recommendations (based on survey findings), and one is based on existing literature and business perceptions. The authors’ recommendations include:
- In order to foster evidence-based policymaking, venture capital firms need to gather better data on entrepreneurial diversity (Centre for Research in Ethnic Minority Entrepreneurship, 2022).
- To enable tracking and the ongoing reporting of the industry’s performance on diversity, venture capital firms need to make data on their investments publicly available (Brodnock, 2020).
Investing in Women Code signatories regularly report diversity data, and are more likely to invest into founding teams with at least one female or Ethnic Minority member than the general population of venture capital firms. The wider pool of venture capital firms has a large tail of companies that do not invest into underserved entrepreneurs.