Planning for a more diverse and inclusive 2023
Diversity in the European technology start-up scene is not where it should be. Nor is it advancing at the speed at which it should be. In the State of European Tech Report 2021, it was highlighted that factors that are most likely to be perceived as having negative influence in raising funds are coming from an underrepresented background and, for women and ethnic minority respondents, lack of access to a network of investors.
And while we see more media covering the topic, the reality seems to not have changed much. The recent State of the European Tech Report 2022 indicates that the level of funding has oscillated just under 90% for all male founding teams between 2018 and 2022. Not a great picture for diverse founding teams.A commitment to diversity & inclusion (D&I)Between 2017 and 2019, the number of all male investment teams went down from almost half of the VC firms in the market to 37%. While this number is in the right direction the change is mostly in the junior ranks, and it will be time before we see a greater impact in places of impact – the more senior and decision-making levels.
“We believe that diverse backgrounds and life experiences are key to success. In today’s ever-changing digital world, companies need to bring as many different perspectives as possible into their decisions. To achieve this, they must actively look to increase the diversity of their team across all dimensions. That’s why we encourage those that work with us to do the same.” - Nauta Capital
Earlier this year, we were proud to have received the accreditation from Diversity VC that validated the many steps we are taking internally to make sure our industry ecosystem takes steps in the right direction. Within our commitment, we are aiming to share relevant tools and steps that early-stage start-ups in the technology space can take to make sure their work force is diverse and inclusive.Why does diversity matter? Diversity may not be the first thing on a founder’s mind when scaling their business, but it should be amongst the first things. Why? For starters there are several external factors that mean having it top of mind is a given:
- Legal Obligation: The EU’s anti-discrimination legislation prohibits discrimination in the private and public sector.
- Investor Pressure: Nowadays, many investors require diversity in their portfolio.
- Purchasing Power: Women are the primary household shoppers (72%), a diverse workforce will help raise different considerations in the user experience.
- Talent Scarcity: The EU working population is ageing making global scouting a necessity.
But it’s not just about the external forces that encourage diversity, there are many benefits to a company no matter how big or small, including:
- Profitability: Higher gender diversity on executive teams is 25% more likely to have above average positive impact on profitability.
- Innovation: More diverse management teams are more innovative which is key in tech and start-ups.
- Employee Turnover: An inclusive and pleasant work atmosphere increases employee retention by 5.4 times.
And finally, moral obligation. After all, every human being is created equal, worthy of respect and opportunity. Therefore, being inclusive and not discriminating, should be something we all strive for.
A holistic approach to diversity
Founders may understand the importance of having a diverse workforce and inclusive culture but putting it into action may be tricky. Their days fill up with troubleshooting product improvements and issues, finding new customers, hiring talent, managing the finances, and many other things.
Technology to help create a diverse and inclusive start-up
Founders are what we colloquially call “wearers of many hats.” If they simultaneously want to attract a diverse talent pool, make sure their policies are inclusive, engage employees as the company grows and measure their diversity KPIs, they may need a little help from DiversityTech.