Talent is equally distributed, but opportunity is NOT… What venture capital can learn from the British Design Museum

Me with OLIO founding team member Ben, at the Beazley Design Awards opening day

Last week I was absolutely thrilled that OLIO was nominated for the prestigious 12th annual Beazley Design Awards. The nominations are exhibited in the Design Museum for the next 5 months, and celebrate the most innovative designs in fashion, architecture, digital, transport, product and graphic design from around the world.

As I walked around the exhibition at the opening event I was immediately struck, and powerfully so, by two things:

1) That so many of the nominations were addressing explicitly female problems

2) That sustainability was such an incredibly strong theme too

In this day and age it shouldn’t be surprising to see female issues represented; and it shouldn’t be surprising to see concern for the future of humanity and the planet manifested. But sadly, it is.

I remarked on this to Maria McLintock, the Assistant Curator. She explained that what I had noticed was as a direct result of the Beazley awards team having completely overhauled their nominations process. This year they’d gone to great lengths to recruit 150 new nominators from all over the world, plus they allowed nominations from the general public for the first time. As a result of this radical re-think they had the most diverse, international nominations committee ever.

Perhaps unsurprisingly, the nominees reflected this diversity! They included a biodegradable pregnancy test; a silent wearable breast pump; a plastic made from plants; and a chair made of waste that will last a life. All truly outstanding examples of design that absolutely deserved to be in the exhibition.

Selection of nominees from the Beazley Design Awards 2019

As I reflected on what I’d just experienced, it immediately struck me that the Venture Capital industry could sorely do with taking a leaf out of the Design Museum’s book. Last year in the UK, only 1% of venture capital went to female founded businesses (89% went to male founded businesses); and I can’t even find the % that went to BAME founders, which probably says it all.

Having raised 3 rounds of financing for OLIO, with our latest raise being a $6m Series A last summer, it’s become extremely clear to me that the insultingly low levels of investment in female founders is strongly correlated with the lack of diversity in the VC community. From my own sample of one, I’ve observed that my conversion rate when pitching to women is north of 70%, whereas when I pitch to men, it’s closer to 5–10%. Unfortunately for all the female founders out there, there are only a handful of cheque-writing women in London.

I’ve asked myself why this correlation/causation exists. I think it’s because it’s entirely natural, human even, for VCs to invest in what they’re passionate about, and can relate to. Therefore as long as the VC community remains as homogeneously white and male as it is, we will continue to see an over-indexing of investment in start-ups tackling problems that excite this community. At its best this looks like lots of investment in food delivery, fintech, AI and crypto, and remarkably little in community, sustainability, or female/BAME/poverty related issues. At its worst it looks like too much investment in first world problems, and not enough investment in real world problems.

Just imagine the incredible innovation, progress for humanity, and outstanding returns we would see if the industry were to have true diversity amongst the gatekeepers of capital? At this point, many will rightly protest that progress is being made; and I agree that it is. But not nearly fast enough; and not at the most senior levels of the industry, where a pitifully low 9% of Investment Committee members are women. The VC industry prides itself on its powers of ‘pattern recognition’; however I would argue that it now needs to break this crutch and recognise that whilst talent is equally distributed, opportunity is not. Extraordinary efforts therefore need to be made to diversify the industry, and I would suggest the following as a starting point:

  1. To truly commit to diversity as a top priority for the industry, and for firms to give someone specific organisational responsibility for diversity (to date only 40% of funds have done so)
  2. To identify and recruit from completely new talent pools in order to access diverse candidates
  3. To take a long, hard look at the work environment to ensure that it’s attractive to a more diverse community. Introducing more flexible and remote working will surely be an incredibly powerful tool for diversity, as we’ve experienced firsthand at OLIO

While the effort required for this change may seem enormous, can the industry afford not to? VCs are the gatekeepers of capital for innovation and prosperity, and therefore have an enormous responsibility to humanity. They would be wise not to forget this.

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Tessa Clarke

Tessa Clarke

Co-Founder & CEO of OLIO, the food sharing app. Getting my head around the climate crisis. Passionate about sustainability, startups & diversity.