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To Narrow the Equity Gap We Should Use A Checklist System When Making Investment Decisions

In order to narrow the equity gap, I suggest we use a checklist system when making investment decisions, rather than purely ‘gut feel’ as that may bias investors against women.

A recent Fortune Magazine article reported that in 2017, only 2% of Venture Capital dollars went to female founders. I reached out to more than 15 prominent VCs to explain how these numbers are possible, what can be done in general to remedy this, and what they specifically can do to remedy these numbers.

I had the pleasure to interview Francesca “Check” Warner. Check is the co-founder and CEO of Diversity VC, the world’s first non-profit dedicated to promoting diversity and inclusion in Venture Capital. In May 2017, Diversity VC produced the first ever study on the number of women in VC, in partnership with the BVCA. Diversity VC’s work has been featured in the FT, Bloomberg and Business Insider and was highlighted in the UK Government’s November 2017 budget.

Check is also a Venture Advisor at Seraphim Capital, the Series A Space Tech fund with investments in companies including Spire and IceEye. Prior to joining Seraphim Capital, Check spent two years at Downing Ventures, investing in over 30 early-stage technology businesses, with a focus on consumer health and deep technology. Before moving into Venture, Check worked in marketing for AMV BBDO. She graduated from Corpus Christi, Cambridge in 2012.

Thank you so much for joining me Check.

What do you think is the root problem that lies behind the gender equity gap?

There are so many reasons why female founders get far less of a proportion of venture funding than their male counterparts. However, the key reason in my opinion is the lack of diversity in VC firms themselves. The organization I co-founded to address this challenge, Diversity VC, carried out the first ever study on the number of women in VC in the UK in partnership with the BVCA and This study showed that 48% of UK VC firms had no women in their investment teams and only 13% of partners in the UK are female. The statistics in the US are similar, with just 11% of partners being female. The statistics are even worse for ethnic diversity, with Social Capital reporting that 78% of VCs in the US are white men. This lack of diversity has a profound impact on the companies that are funded. Not only is it a less welcoming prospect to approach a group of white male venture capitalists if you are a female founder, it is also practically difficult, since many venture capitalists asks founders to get a ‘warm introduction’ through someone that they mutually know. Many female founders just don’t have the links into these funds through work networks. Finally, it’s been proven that there is significant unconscious bias in the decision making process when deciding whether to make an investment, which disadvantages female founders seeking funding. All of these factors conspire against female founders, so it is disappointing but unsurprising that they receive so few venture capital dollars.

Which specific steps would you recommend to help close the gender equity gap?

A straightforward solution is to hire more women in your VC firm. In order to do this I suggest using the Rooney Rule, i.e interviewing one woman for every man, for every open position. This is different from a quota, but at least ensures that the pipeline for hiring is 50–50.

I also suggest that VC’s examine their decision-making processes and think about how to reduce unconscious bias. One way of doing this is to bring multiple points of view into the decision making process (so more than one person has to approve a company being rejected for funding).

Another way of doing this is to use a checklist system when making investment decisions, rather than purely ‘gut feel’ as that may bias investors against women.

Finally, if you are a decision maker at a VC, you could commit to meeting at least 5 companies each month with a female founder. I have re-examined our internal investment decision-making process to ensure that it is as fair as possible from the top to the bottom of the funnel.

Thank you for these great insights, Check!