When I think about the startups that I’m most excited about this year, they are invariably led by underrepresented founders.
Exceptional founders building businesses that range from fertility treatment services to AI-powered solutions sorting recyclable materials and hugely ambitious innovations designed to drastically improve the solar energy grid, concrete manufacturing, or the container haulage industry.
And yet the numbers haven’t changed. Female-founded tech startups receive 2% of VC funding, for black founders it is about 0.5% and for LGBTQ+ founders very little data even exists.
This is a long road to travel. Our research shows that 96% of Europe’s unicorn founders are men. In fact, you are considerably more likely to find a white, male Oxbridge graduate running a tech unicorn than you are to find a unicorn with a female founder.
My hope is that 2024 will finally mark a turning point in how the VC ecosystem is meeting the demand for serving underrepresented founders with more funds and more capital being allocated specifically to diverse founders.
Underrepresented founders often showcase exceptional entrepreneurial prowess, leveraging distinct life skills, experiences, and perspectives that enhance their grit and determination. These qualities uniquely position them for success as high-performing tech founders.
But too often, they are excluded from the privileged networks that investors turn to for deal flow and origination.
I work with hundreds of founders and a third of Antler’s investments go to startups with at least one woman founder. Based on my experience in VC and the success stories I’ve seen from founders, this is the advice I would give to underrepresented founders about how best to secure venture capital this year:
- Make connections and build a strong network. Building relationships early in the industry can open doors to opportunities and introductions in the future. There are many investors breaking down barriers who want to meet with you.
- Leverage key players in the industry and funds designed to support you. A good way of understanding the values of a VC firm is to see their investment thesis, companies they invest in. Additionally, observe how they highlight diversity within their team and portfolio through their social channels.
- Research and target inclusive VC firms. Identify investors (angels and VCs) that actively support underrepresented founders. Some firms have specific initiatives to invest in companies led by women, minorities, or individuals from other underrepresented groups.
- Highlight your unique superpower. Celebrate your uniqueness and the perspectives and experiences that being an underrepresented founder brings to your business.
- Compelling pitch. Develop a compelling and concise pitch that clearly communicates your value proposition, market opportunity, and growth potential. Practice your pitch so that you can confidently articulate your vision to potential investors.
- Power of storytelling. Investors are looking for well-thought-out product ideas and effective storytelling around market potential, revenue, and profit.
- Show velocity, momentum, and traction. Remember that the same rules apply for all founders. If you can show progress and milestones achieved by your startup, whether it's customer acquisition, revenue growth, or product development, tangible results make your business more appealing to investors.
- Seek mentorship. Connect with mentors who have experience navigating the startup ecosystem. They can provide valuable advice, introductions, and guidance on how to approach investors.
- Be persistent and resilient. Navigating the fundraising process poses challenges for founders, irrespective of their experience level. Embrace the need for diligence and a significant time commitment. Engage with a multitude of investors (100+ in many cases), and diligently follow up; the urgency lies on your end, not theirs. Persevere with tenacity, absorb insights from feedback, and cultivate resilience in the face of rejections. Approach each interaction as a chance to fine-tune your pitch and strategy.
- Project confidence. You are not asking for money, you are offering to sell part of your company.
Entrepreneurship is a powerful force for social change and the financial system that drives entrepreneurship is imbalanced at the moment.
Nevertheless, we’re seeing lots of positive change in the industry already. The prospect of nurturing a new generation of diverse founders holds great promise for the advancement of UK and European tech.
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