How To Crack the Diversity Problem in VC
Read time: 4 min
Yes, there’s a massive diversity problem in VC.
Men-only founding teams raise 87% of all VC funding in Europe.
Funding raised by women-only teams dropped from 3% to 1% since 2018.
Only 1.4% of European unicorns are made up of entirely minority ethnic entrepreneurs (Source: Slush).
So, how can we fix it for good?
1. LPs, Stop Playing It Safe
First, Limited Partners (LPs) must get bold, real bold.
They wield the capital, they call the shots.
So they must take the bull by the horns and start addressing this issue seriously.
We need LPs to demand diversity like they mean it.
No more false promises.
It’s becoming WAY too obvious.
2. Women, Shake Off the Doubts
Here’s the scoop: women are killer investors.
The stats back this up.
So, why the scarce presence in VC?
Enough with the imposter syndrome.
It’s time to flex those investment muscles 💪, start small with angel investing, and build up to running your funds.
At Climate Insiders, our Climate investor community is full of Women Angels.
And they're killing it.
You’ve got this too! You can join them now.
3. Ease Up on the GP Commit
The infamous 2% GP commitment rule, which requires Fund Managers to co-invest 2% of the total sum for each investment, is outdated.
It keeps out the most capable and diverse investors.
Lifting this will diversify the field beyond the investment bankers and consultants who have already amassed wealth.
Why not lower the barriers?
Let's prioritize grit, insights, hustle, and entrepreneurial skills over wallet size.
By focusing too much on financial entry barriers, we're overlooking brilliant minds.
4. More Spotlight on Diverse Investors
We've got diverse founders and fund managers out there crushing it, so why aren't their stories front and center?
Journalists, media, and influencers need to put more emphasis on those role models to demonstrate that they’re the new norm and not the exceptions.
Visibility sparks inspiration, and inspiration leads to action.
5. Forget the MBA; Get Your Life MBA
You don’t need fancy Ivy League stamps or an MBA to make it big in VC.
What you need is grit, an eye for opportunities, and a willingness to take risks.
Consider this: instead of dropping cash on an MBA, why not invest that in startups?
Call it your “life MBA” — real stakes, real learning, Tim Ferriss style.
6. Own Your Story, Own the Room
To everyone from underrepresented backgrounds: take accountability, relay your stories, and put yourself out there.
Be willing to standout and claim your differences instead of trying to fit in a mold that clearly isn't meant for you
Don’t try to blend in.
Take risks, innovate, and try to stand out in your own ways.
Rap didn’t conform to music norms, and look where it is now.
Netflix didn’t try to follow the Hollywood codes, they rewrote the rules of entertainment.
We can shake up VC together.
Conclusion
Venture Capital isn’t just about funding the next big thing; it's a force for radical change.
Let’s wield this powerful tool to empower the right people for the right reasons.
Let’s not just embrace change; let’s be the change.
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Stay unapologetically you 🌍💥,