GENIUS IS EVENLY DISTRIBUTED, OPPORTUNITY IS NOT

Our diversity & inclusion performance

Investment managers have a responsibility to investors to pick investments with the highest potential. We also have responsibility to the society at large to direct funds to the most interesting innovation and most talented teams regardless of the gender, location, colour, economic background or beliefs of the entrepreneurs.

Luckily those two responsibilities are complementary. It makes good investment sense to ensure every entrepreneur has the same opportunity to impress.

 

Here’s how the Start-Up Series Fund has invested:

GENDER: FEMALE FOUNDERS

The Start-Up Series Fund:

  • Since inception: 19%
  • From 01 January 2019: 12%

Benchmarks:

  • 2019: 1%

Source: The Deal, Beauhurst, published February 2020

GENDER: AT LEAST ONE FEMALE FOUNDER

The Start-Up Series Fund

  • Since inception: 37%
  • From 01 January 2019: 38%

Benchmarks: 

  • 2019: 9%

Source: The Deal, Beauhurst, published February 2020

ETHNICITY: AT LEAST ONE BAME FOUNDER

The Start-Up Series Fund

  • Since inception: 16%
  • From 01 January 2019: 19%

No benchmark

LOCATION: BASED OUTSIDE LONDON

The Start-Up Series Fund:

  • Since inception: 60%
  • From 01 January 2019: 81%

Benchmarks:

  • 2019: 27% 

Source: The Deal, Beauhurst, published February 2020

Baked into our approach

The numbers above are not the result of any positive discrimination. These numbers stem from believing that ‘genius is evenly distributed, opportunity is not’ (quote often attributed to Mitch Kapor who created Lotus 1-2-3) and from recognising that we have all have bias – conscious or sub-conscious.

We deliberately baked five ingredients into our approach to attracting deal flow and distilling it down to the commercial recommendations made to the Fund Manager of the Start-Up Series Fund.

  • 1. REMOVING BARRIERS

    Most investors do relatively little to proactively attract deal flow, and often rely on networks and introductions. Warm introductions are 13 times more likely to reach investment committee and be funded than cold submissions (source: UK VC & Female Founders report, British Business Bank, Diversity VC & BVCA, February 2019). This inadvertently perpetuates funding of people from similar backgrounds to many investors – white, middle class, middle aged & London based. We have a unique source of deal flow, the Start-Up Series competition. It is super easy to enter (then very hard to win), it removes barriers and is promoted nationwide.

  • 2. BEING TRANSPARENT

    Our competition usually runs each month, and the distillation process for the six weeks following. The six-stage process is clear and transparent to the entrepreneurs and the criteria used is published as part of the feedback given to those that are unsuccessful. Then we are creating more visibility of our data. It’s harder to be biased if others have the information to hold you to account.

  • 3. DITCHING THE PITCH

    We don’t ask anyone to ‘pitch’ at any point in our competition. Too much emphasis in early stage investing is put on the ability to pitch an idea, where confidence and bravado (often the privilege of those who have been fortunate to go to the better schools) can disproportionately outweigh insight, analysis and thoughtfulness. We still value the ability to succinctly put across a market insight and idea (the first part of our competition only asks for a 2-page summary or a 2-minute video), but this doesn’t have to be face to face where personality can overcome commercial nous.

  • 4. VALUING FRESH INSIGHT

    Our criteria weighted to the attractiveness of the market and the strength of the market need. We value market insight very strongly – if you have inspirational & differentiated insight there is more chance you will have created a differentiated proposition. Location, ethnicity and gender are likely to have a role to play in the strength of empathy with real consumers and the ability to see problems that need solving or opportunities to be exploited. Often people based in London can have an abnormal view on real life for the families or high streets across the UK. Ethnic populations and behaviours make up huge and fast-growing markets. There is some science that shows women are generally more empathetic to the world around them and therefore create stronger insight.

  • 5. THINKING AHEAD

    When we look at the economics of how a business grows, there is some attraction in being based outside of London and the South East. The market for talent is less competitive and better value, and property costs are cheaper.

OUR COMMITMENT TO IMPROVE

BROADER UNDERSTANDING

Gathering data on ethnicity & economic background at the entry stage of the Start-Up Series (without associating with individual competition entries, i.e. anonymised) to complete our understanding and data at each stage of our process.

MORE TRANSPARENCY

Once we are more confident with our data we will publish metrics for each stage of our investment process alongside our existing breakdown by amount funded.

DIVERSE JUDGES

We have guest judges that join us for different monthly competitions, they keep the core judges (the Worth Capital team of Hayley, Paul & Matthew) fresh and stimulated. We attempt to have judges with more diverse backgrounds

IN IT TOGETHER

We will devote time to share our early stage investor perspective, experience and learnings around diversity & inclusion.

JOINING TOGETHER
JOINING TOGETHER

JOINING TOGETHER

Worth Capital are a signatory to & supporter of the Investing in Women Code. A HM Treasury and British Business Bank initiative set up following the The Alison Rose Review of Female Entrepreneurship published in 2019. The Code brings together financial services firms committed to improving female entrepreneurs’ access to tools, resources and finance. This includes providing data to HM Treasury and the British Business Bank about the gender breakdown of funding and deal flow, so that an aggregated report can be compiled.

LEARN MORE ABOUT THE CODE

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