Beth Devin, strategic advisor, HearstLab, spoke to the “depressing news” that despite a 13% increase in venture capital investing during 2020, the funding going toward female founders declined “from a measly 2.6% to around 2.2%.”

Devin continued that “corporations really struggle to change the balance and get a more inclusive and diverse workforce.”

She stated that we need to instead look at the complete supply chain, from the education pipeline, who the company’s early hires are, how they retain, reward, and promote those people who were the role models at the top.

Just looking at the startup ecosystem, founders, entrepreneurs, residents, accelerator programs, angel investors, venture capital and even private equity firms, Devin argued that for the most part these are all dominated by men.

This imbalance was a core reason behind founding HearstLab, beyond simply investing in female founded companies. The Lab seeks to support women with ideas and companies that have progressed beyond their concept or minimum viable product phase and are looking for more traction in the market and be attractive to later stage investors.

What Devin and the HearstLab discovered is that this issue certainly isn’t unique to women, it is especially true for people of colour. “There is a big problem across the industry in relation to the cookie cutter approach of financial modelling, which isn’t inclusive or open enough to support a more diverse ecosystem.”

Shruti Ajitsaria, partner at law firm Allen & Overy and head of the firm’s in-house incubator, Fuse, also addressed the call for diversity in approach to startup support.

Ajitsaria explained that the idea behind Fuse was to create a physical space within the law firm and invite the best-in-class legal tech companies with the idea that if A&O lawyers could touch and feel and try different technologies then they would feel comfortable enough to move away from traditional methodologies.

“It’s very much the same for banking, but lawyers are so untrusting of new things and we are so used to doing things in a very particular fashion that trying to create that cultural change is very difficult.”

Cementing Devin’s point, Ajitsaria commented that while Fuse is currently working on “cohort 5,” “we need to look at where we’re finding companies differently. I think that’s one thing I really need to focus on and do better going forward. I would say our diversity record isn’t fantastic.”

Ajitsaria noted that a key part of the problem is that Fuse sits at the intersection of law and technology, with law already being quite a “white male heavy” sector, particularly at the senior levels. While this isn’t an excuse for a lack of diversity, she continued, it goes toward explaining the fact that the pond in which Fuse is fishing is quite small.

“I will say however that some of the most successful companies that we’ve had [at Fuse] have been diverse in a really interesting way.”

One of the companies Fuse brought on board was co-founded by a visually impaired gentleman who struggled to review documents in the same way as non-visually-impaired people. He joined forces with his co-founder (also from a cultural minority) to establish a company which allows documents to be read, and definitions within these documents to be accessed in a much more efficient manner.

Ajitsaria believes that this pairing of talent with individuals from minority backgrounds allowed for the creation of a tool that is immensely valuable for everyone.

“That notion of why diversity is important is because oftentimes when someone’s looking at a problem from a completely different perspectives, it gives you a product built from a completely different perspective that may in fact be applicable to everyone.”

Elly Hardwick, former banker and now sought-after board member, circled back to the importance Devin places on diversity of funding models. Hardwick argued that this is critical as not every business fits into the typical model, particularly so for women.

“I think in my experience a lot of women prefer to start businesses off the side of their desks, they prefer to bootstrap for longer. Maybe it’s because they're put off by that sort of male dominated VC or maybe it just doesn't fit […] It's a shame that there have to be VCs focused on female founders in some ways, but in other ways, it's great because that different model is really required.”

From the perspective of representation on boards, Hardwick also offered a unique viewpoint. She observed that being present on a board is really a luxury situation compared to the executive life, because “on a really well constituted board everyone should be a minority in a way […] I’ve found myself being listened to on boards in a way that I would have died for in executive roles.”

Additionally, when providing advice for women who wish to pursue and thrive on board positions, Hardwick emphasised the importance of not feeling as though you are only present to tick a diversity box.

“Don’t let it put you off. It’s the best opportunity to get in there and prove them wrong. Pick out the gnarliest, most hard to reach person and show them what you’re worth to make your presence felt early on.”