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Portfolio guidance
and management

Purpose and principles

Manage diversified portfolios of quality companies that maximise risk-reward and financial outcome.

  • Track portfolio data with a female founder and other diversity lens

  • Understand the financial importance of strong ESG within the portfolio and pipeline companies, and your ability to affect change

  • Engage LPs and underlying investors on ESG within the portfolio and report to them in qualitative and quantitative form

Margo Polishchuk, Co-Founder, proSapient

"We built a $10m ARR business in three years by having a high-performance culture. But a high-performance culture is kept high by being sustainable. It comes hand in hand with a working culture that is rich in diversity, equal opportunities and inclusion."

Julia Rabin, Project Lead, Diversity VC

"A start-ups diversity of thought and experience doesn’t begin and end with its founders. Just as a fund must create an inclusive environment where all voices are heard, so should its portfolio companies develop their internal policies to ensure individuals from all backgrounds have an opportunity to grow. Providing guidance and support to portfolio companies from the start will pay back in dividends, not just in team success but in widening your network as a whole."

Best practice examples

Best Practise

D&I as a metric

  • Strongly encourage companies to collect diversity and employee engagement data that identifies bias and barriers on an ongoing basis
  • Review D&I policies of portfolio companies and to compare with internal VC and PE firm policies
  • Review if you want to set a minimum D&I policy standard within portfolio companies
  • Make D&I an agenda item on investor updates and at the board level within portfolio companies
  • Consider if you want to set targets for inclusion or create incentivisation within team compensation

Provide additional guidance to female-led companies and other diverse groups

  • Work on a stand-alone basis or in partnership with established organisations to mentor diverse fund managers and portfolio company leadership
  • Provide guidance on how best to raise funds and operate within the venture capital ecosystem

Diversity on boards of directors

  • Encourage and promote diversity at the boards of directors of portfolio companies

Elspeth Briscoe, Founder and CEO, Learning with Experts

"Most investors are smart, successful, data-driven and nuanced. However, many seem not to reflect on how any of that might be affected by closed networks and elitism. I'm excited to see this beginning to be addressed – I recently met a well known and successful VC principal who was humbly and honestly referring to their subconscious bias. It is clear to me that people graced with the right networks take less time to raise investment. For others who have to build relationships and trust from scratch, this additional time can kill your runway."

Anonymous, Founder (Series D)

"Our team, product, end market is diverse. I wish our board was more representative of that. However, all of our investor directors are male. I would love to have more gender-balance on my board but can’t do that without incurring the additional overheads of hiring extra NEDs."

Standard code of conduct and zero-tolerance policy

  • Provide portfolio companies with a standard code of conduct and zero-tolerance harassment policy templates
  • Set minimum requirements that must be met by portfolio companies
  • Socialise these on an investor website as a resource for portfolio company employees

Culture and executive training

  • Guide and support companies to build inclusive cultures
  • Hold a training seminar for the senior leadership teams of portfolio companies
  • Focus specifically on setting transparent culture, establishing robust feedback loops, conducting feedback calibrations and 360-degree reviews

Portfolio inclusion assessment

  • Assess diversity and inclusion within your portfolio to identify gaps in your investment pipeline and practices
  • Use the results to implement targeted interventions to support portfolio companies
  • We recommend Diversio’s portfolio inclusion assessment to measure your fund against industry standards and uncover data-driven best practices

Mental health support

  • Provide portfolio companies with template mental health policies and best practices
  • Encourage leaders to engage with their employees in open dialogue around mental health, and formalise policies

Liz McCarthy, Founding Partner, Lizzie Loves

"As we move from a start-up, into a scale-up it has been a strategic priority to strengthen the senior and wider team. This rate of growth depends on an inclusive, pioneering, hard-working team who are well supported. I am sure that the leadership framework, tracking, two-way dialogue and culture within the company has all been key to the success we’ve had so far."

Diana Greenhalgh, Co-Founder, MyBespokeRoom and DesignPalPro

"Opportunities for women to work, grow and flourish are embedded in our culture. Our team is made up of women who have demonstrated great and meaningful success. We have broken down barriers through flexible working, listening, pulling together and showing support for each other. Our team drive each other to achieve, and come up with creative solutions that set us apart from the competition."

Elizabeth Tweedale, Founder, Cypher Coders 

"Mentorship from investors, founders and executives has been one of the single most important pieces of growing Cypher Coders, particularly as a solo founder. Access to senior professionals across different parts of business fills the gaps that potentially exist within a growing team, and help with introductions and advice I would not have otherwise had access to."

Independent ombudsman

  • Onboard a human resources professional to act as an independent ombudsman for employees of portfolio companies without HR departments and/or low safe work scores
  • Publish and socialise this resource as a means for employees to confidentially report harassment or discrimination without fear of retaliation

Include D&I questions during due diligence

  • As part of the due diligence process, ask for demographic data of teams, samples of policies and strategies that support D&I, and evidence of commitment to advance ideals
  • Use responses as part of the scoring/ranking process

Use your position of authority responsibly

  • Challenge companies that present all-male management teams, advisory boards or other notable absence of diversity
  • Offer support and access to quality diverse talent: become a first call when companies are looking for quality and diverse talent
  • Challenge companies that present male leaders in commercial and front-office roles, and female leaders in senior support functions
  • Challenge tone and language in presentations and ongoing portfolio management where it is offensive or lacking appropriate inclusion
  • Endorse, promote and stand up for the interests of female founders and other diverse groups in public forums, including events, media and government level
  • Ensure that government and other policies are structured strategically and in practice to promote, or at least not disadvantage, female founders or other diverse groups or sectors
  • Offer senior access to panels and events that promote female founders or other diversity
  • Follow corporate leads by offering financial incentives/penalties to legal and banking deal teams that are lacking gender and other representation

Ann Kramer, CEO, The Electrospinning Company

"We are proud to have a 50:50 gender balanced team in our engineering company, aged from 20s to 60s, and with eight nationalities. We believe this makes us more innovative and sensitive to customer needs. These seem reasonable and meaningful data sets to supply to investors and be questioned on."

Camilla Richards, Partner, Atomico

"We believe that it is critical to help companies to embed a D&I culture from the outset, and it is our privilege as investors to support them to do this. We work closely with our portfolio to support them on building out their D&I strategies and policies. It is one of our termsheet requirements for portfolio companies to have these in place within six months of our investment."
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