Announcing our certification as a Diversity VC Level 1 Standard fund

NOV 30, 2020

BY Suranga Chandratillake

I’ve been in the technology industry for 25 years as an engineer, an exec, a founder and a VC and, in every one of those years, I’ve had difficult first-hand reminders of one of our industry’s biggest challenges: a massive lack of diversity.

While I’ve met many people thinking about and working on this problem, I was inspired by Check Warner and her team at Diversity VC from the first time we met and signed up to help on their board three years ago.

What was different about Check and her team’s approach?

First, I liked Diversity VC’s perspective that change has to start with investors. Investors are hugely influential in our industry because they get to pick which idea gets the capital to be put into action and there is now a mountain of research that shows that people invest in people like themselves (hello unconscious bias!). This means those early financial decisions set in motion a lack of diversity that then propagates and compounds over time and across the entire industry.

Secondly, unlike some similar groups, Diversity VC has always been staffed by full-time, professional VCs who did this in their ‘spare time’. As a result, there was always a ruthless focus about the way the team spent its time – carefully picking the next domino they felt they needed to knock over to get their mission accomplished. This time-starved execution mode has meant the team has also been amazing at prioritizing achieving real progress every year.

The first two dominoes of change were data (to demonstrate the scale of the problem so it cannot be ignored) and education (Future VC – now the world’s largest VC intern program that explicitly places people from non-traditional backgrounds into some of the best VC firms in Europe)

Both have been an unmitigated success. The data projects have highlighted the issues, spawned multiple government reports and ensured diversity is now a topic around every partnership table in the industry. And Future VC means tens of people who had likely never heard of VC before are now entering its junior ranks, slowly affecting change and making the industry a better, more diverse place.

Which is why I’m super excited about what comes next: The Diversity VC Standard.

The idea here is to create a detailed standard of processes and policies that have been shown to improve diversity in everything that a venture firm does – hire and retain talent, make and manage investments, and work with founders and team who build amazing companies.

The Standard allows for any VC firm to go through a process of assessment, some technological, some human, and really understand how they stack up. It allows them to understand where they are weak and where they are strong.

The Level 1 Diversity VC Standard seal

Ultimately, if and when a firm makes enough progress on multiple fronts, it means they get a grade – Level 1 or Level 2 – and I’m very proud to announce here that Balderton made Level 1 in the first batch of firms to take the assessment over the summer.

Certification can be a powerful driver of change

Certification is powerful in that it is a driver of peer pressure and change. I’ve already had five other VC firms reach out to me about our grading and how they should get involved. I’m excited that so many people have this on their agenda and the Standard gives them a concrete place to start.

I think it’s also powerful in that it provokes hard conversations. When we went through the assessment we were weak in areas that surprised us. That led to the realisation that despite best intentions, we were not doing everything we could. That in itself has led to change that will make Balderton a more diverse employer and a more balanced maker of investment decisions.

I’ll write more about our specific work in this area and how we are changing what we do to achieve a more diverse technology industry (and why this is so important to us!) but for now, I wanted to focus the light on Diversity VC and their latest great step forward in righting a great wrong at the heart of our industry.

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