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Guidance and Best Practice Examples for VCs, Private Equity and Institutional Investors with regard to Diversity and Female Entrepreneurship

British Venture Capital Association

2021

Global

Guide

Impact Investing

Gender lens investing Impact Investing Diversity and inclusion

Guidance and Best Practice Examples for VCs, Private Equity and Institutional Investors with regard to Diversity and Female Entrepreneurship

Guidance and Best Practice Examples for VCs, Private Equity and Institutional Investors with regard to Diversity and Female Entrepreneurship

The British Venture Capital Association (BVCA) has published guidelines and best practice examples “by investors, for investors” with regard to diversity and inclusion. Co-authors include Atomico, Pollen Street Capital, Ada Ventures, Adelpha, Astia and KPMG, in partnership with Investing in Women Code, Diversity VC and Diversio.

The publication serves as a resource for all investors, regardless of what stage or sector they invest in, with a focus on four key areas: (1) Talent acquisition, retention and development; (2) Internal education, culture and policy; (3) Outreach, access to dealflow, and unconscious investment bias, and (4) Influence, external guidance and portfolio management. Best practices are listed per section, with 13 each for the initial two sections, and 10 each for the latter two sections.

Each section includes best practices and quotes on the subject from leading members of the venture community. They offer practical advice for institutional and other investors who wish to maximise access to diverse deal flow; increase investment in under-represented founders; drive diversity and returns across the investment sector; and manage their companies and portfolios to optimise return.

Key Insights

  • Use diversity and inclusion (D&I) as a requirement or metric for team composition, incentivisation, due diligence, and dealflow and portfolio management. Firms are encouraged to “actively seek out” under-represented groups, particularly female founders. Moreover, the guidelines recommend sharing investment diversity targets with other firms to encourage further adoption, and collaborating to push for industry-wide change.
  • Advance D&I within the organisation itself through goal-setting with an expected timeline of deliverables and tangible outcomes; a dedicated budget and resources; and progress tracking and accountability, managed by a chief diversity officer or champion. Clear and regular communication is important, starting with a publicised statement of support and overview of the organisation’s D&I strategy.
  • Focus on work-life balance and how “care” impacts “career” or vice versa. Best practices include: (1) considering how the timings of meetings and social gatherings impact those with caring responsibilities; (2) adopting and implementing a family leave policy that is equally beneficial to all caregivers, including fathers, and (3) providing emergency backup childcare and eldercare in major cities of operation.
  • Guidelines on leadership cut across the key areas, particularly in terms of intentional gender parity, proactive mentorship, and culture-building via modeling behavior. (For example, the guidelines encourage organisation-wide promotion of flexible working and working from home so that senior leadership, including men, demonstrate their adoption. This may help de-stigmatise female flexible work.) Using one’s position of authority responsibly includes “challenging companies that present male leaders in commercial and front office roles, and female leaders in senior support functions.”

The guidelines were originally published on the BVCA website.

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