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Investment bias

Purpose and principles

Improve access to quality and high-conviction investment opportunities and returns.

  • Access higher quality and less crowded deal flow by diversifying of investment sources

  • Tackle unconscious bias in the investment process

  • Track and report deal-flow demographics

  • Create partnerships and outreach events to provide access and confidence to more diverse deal flow

  • Consider referral schemes, compensation incentives and designated funds


"I’m in the interesting position where I work in an 80% to 90% male-dominated industry (commercial data science) where I am a female that is usually an investor being pitched to, but sometimes I am part of a pitch team. There is a colossal difference in how I am treated depending on whether I am the investor or on the pitching side, and whether or not I have had a warm introduction v no introduction. I can’t begin to tell you how starkly different the experiences are."

Kathryn Parsons MBE, Co-Founder and CEO, Decoded

"We need to deeply reflect on the fact that only 1% of venture capital in the UK is currently invested in female founders. If venture capital is meant to invest in the businesses of the future, they are sending a clear message that they do not believe that women have a place in that future." 

Best practice examples

Best Practise

Tracking and reporting deal-flow demographics

  • Implement a process to track diversity among applicants, assessments and portfolio investments.
  • Monitor diversity from applications to meetings to investments within the context of mandate
  • Report these statistics annually


  • Review and sign the Investing in Women Code
  • Use the code's standardised definition of a female-founded business and begin tracking investment dealflow with a gender lens 
  • Set targets for diversity of investments made, focusing on gender diversity of founders, and track these targets
  • Share these targets with other VC firms to encourage further adoption, and collaborate to push for industry-wide change
  • Expand targets to cover ethnicity and other areas too

Partnerships with D&I organisations

  • Build relationships with groups and organisations that work with communities and founders from diverse backgrounds

Diversity referral programme            

  • Implement a programme where employees or scouts receive an incentive or recognition for referring a team with an under-represented founder
  • Reconsider any culture or statement that looks for “warm introductions”

Anjel Noorbakhsh, Founder of Iranian Women’s Association

"I work with a number of VCs to help them access high-quality and unique deal flow with high ROI potential. The deals come from networks such as the Iranian Women’s Association, which investors might not naturally have access to. I tend to focus on female founders and foreign-born, founders which represent a huge overlooked market: 65% of the UK’s start-up unicorns have at least one immigrant co-founder, yet teams with an immigrant co-founder receive less than 2% of early-stage VC capital."

Check Warner, Founding
Partner, Ada Ventures,
and Co-founder, Diversity VC

"Founders that are introduced to investors by friends, school friends and colleagues are 13 times more likely to receive investment, compared to those who don’t have a ‘warm introduction'."

Executive compensation

  • Tie executive compensation (eg 15% of total annual bonus) to concrete diversity targets (eg 10% increase in diverse or female-led companies)

Dedicated fund

  • Create a dedicated pool of funding that is reserved for teams led by under-represented groups, or focused on under-represented populations

Access and outreach programme

  • Review best practices on how to actively seek out under-represented founders, and name leaders responsible for implementation
  • Look for deal flow beyond the traditional channels and personal networks
  • Actively seek out female founders in circles where they typically network
  • Actively attend showcases of female-founded companies
  • Look at potential partnerships with D&I industry organisations to increase networks and pull through
  • Participate in a programme that enables potential entrepreneurs from under-represented groups to be trained, mentored and supported through their application process
  • Give clear advice on how to approach your firm or other VC or PE firms, how to present, language, KPIs
  • Proactively create an ecosystem that promotes access, confidence and network for diverse and female founders
  • Run drop-in sessions and round-tables for diverse and female founders

Qualitative and quantitative scorecards

  • Actively use qualitative and quantitative assessment, scorecards and deal-flow analysis
  • Diversio publishes an inclusions scorecard for deal-flow assessment and benchmarking data

VC investor

"We considered a dedicated fund for a long time, but think the better way is to set targets for female and diverse investments and tie the investment team's compensation to hitting those targets. This incentivises the team to dig harder and look harder for quality and diverse investments to put into the main fund." 

Check Warner, Founding Partner, Ada Ventures, and Co-founder, Diversity VC

"We have our emails on our website, we have published our investment criteria and we have invested in a company in 2020 that applied for funding through our website. Ensuring that founders can reach you, wherever they come from, is critical in ensuring diversity in the pipeline of founding teams and therefore increasing the likelihood of diverse founders receiving investment."

Lucy de Laszlo, Head of Origination, Adelpha

"We use a quantitative scorecard for assessing earlier stage private investment opportunities aimed at tackling unconscious bias and improving ROI. It’s eye-opening and helps drive unique, high-conviction, uncrowded investment opportunities and track record."

Communication, review and feedback

  • Invite diverse and and female-led companies to stay in touch on their progress
  • Be clear on your mandate and process and, “what good looks like”
  • Give direct challenge and feedback to founders regardless of gender, ethnicity or background
  • Challenge investment teams to articulate concerns or areas that need to be addressed directly to the founding teams

Unconscious bias

  • Ensure investment committee panels are themselves diverse, including – and especially – at the first review stage
  • Proactively bring female-founded and diverse businesses in for face-to-face meetings or calls
  • Resist inclination to reject on a paper or digital application, especially if they sit in or close to the mandate
  • Enforce targets for deal pipeline, such as a minimum of 50% of deals that reach the investment committee must be female-founded or have C-suite teams with qualifying diversity
  • Understand and break down language bias
  • Consider gender-blind investment process

Addie Pinkster, Founder and CEO, Adelpha

"Communication is key. The best investors work hard to give direct feedback on what they like, where their concerns lie and whether the founder should keep them up to date and, if so, how and when. If you don’t tell a founder what you are thinking or wanting then it is very hard for them to respond, action or re-engage. Be direct, straightforward and complete in your feedback to all founders (whilst also being polite and professional), and fight the unconscious bias to be more direct with male founders and more placatory with female founders."

Ciara Ferguson, Data Scientist, Advisor, Investor

"I would encourage all investors to be aware of what initial impressions they give and how much that matters. The power imbalance of the pitch room or call can hugely exacerbate the impact this has. It is incredibly difficult to deliver a successful pitch if you have to negate unconscious biases before convincing investors of your ability to outperform."
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