Included VC is a fellowship program that provides access, opportunity, and knowledge into the world of Venture Capital for individuals from diverse communities which are often overlooked or excluded.
Second annual fellowship programme!
In this regard, Included VC has launched recruitment for its second annual fellowship with a mission to change the face of the VC industry, dramatically increasing diversity and maximising fund success by transforming networks, staff, deal-flow, and investments.
Talking about diversity in Venture Capital, Nikita Thakrar, co-founder and Director of Included VC, in an exclusive interview, says, “Diversity significantly improves financial performance and profitability both for startups and the funds that support them. To put this into perspective, the success rate of acquisitions and IPOs was 11.5% more successful if investment partners had different educational backgrounds, and an investment’s comparative success rate increases by 32.2% if partners are from different ethnicities. Why is this? Homogenous funds (which are the most common, with VC being 70% white, 80% male, and in the US 40% either hailing from Stanford or Harvard) tend to invest in founders who look like them. This means a significant amount of money gets left on the table which could have been invested in innovative businesses which may not tick the firm’s standard boxes.”
Aims to tackle the systemic lack of diversity
This global fellowship will provide 40 individuals from diverse groups into venture capital, with education & mentoring from partnering VCs to tackle the systemic lack of diversity in venture capital.
Shedding more light on changing the systemic lack of diversity, from an operational perspective, Nikita Thakrar, explains, “Included VC is committed to creating effective multi-generational and systemic change to reduce barriers for traditionally overlooked and excluded groups. One of the most critical elements of the fellowship is that it isn’t run by one firm, but is the result of numerous VCs in the industry coming together. The partnership of VCs behind Included VC can create a genuine impact. They don’t just provide financial assistance to the fellowship, but also give their time to mentor and network with the fellows, teaching them key skills, and helping them build a community that enables them to truly succeed in VC.”
The fully-funded 12-month fellowship comprises 14 components, totalling 4,000 hours of collective contact time and access to Europe’s top investors. This is delivered via masterclasses and mentoring, deep foundational learning, executive coaching, simulation investment committees, and in-person summits to support professional networking.
Notably, the first cohort welcomed Fellows from 14 European cities; 60% of the cohort is female, 50% are from BAME (Black, Asian, Minority Ethnic) backgrounds and 10% identify as neurodiverse.
Demonstrating broadest definition of diversity
Coming to the criteria for its fellowship, Included VC looks for individuals who are entrepreneurial, passionate about technology, and fascinated by the potential for venture capital to drive change on a massive scale. The Included VC also believes that entrepreneurs and the VCs can come from anywhere: any gender, ethnicity, geography, upbringing, age, neurodiversity, disability, or belief system.
“Much of the recruitment in VC at the moment relies on acquired traits such as what school or university you attended, or where you have worked before, meaning it may seem impossible for an outsider to enter. Then, if they do get the opportunity to enter the sector they’ll see that there is no one else looks like them or shares any traits with them, which psychologically can mean an individual feels excluded. This is why it is extremely important to empower diverse individuals to get into the sector urgently. So that these individuals can act as role models for others who will see them and understand that VC is a viable career choice for them,” says Thakrar.
It’s worth mentioning that Chris Tottman, from Notion Capital, is one of Included VC’s partner, who himself entered VC from a working-class background and with no qualifications having left school at 16.
Positive change is the order of the day
Speaking about the positive changes, Nikita Thakrar, says, “Positive change can occur both in the short and long term. In the short term, around three to six months – simply making a measured and conscious choice to hire investors who are from diverse backgrounds can make a lasting impact on the industry. VCs tend to be small and only hire every one to three years, so ensuring the hiring funnel consciously welcomes more diversity will encourage positive change. We will see a real positive change in the long-term, around five to seven years from now. This is where we will see those from diverse backgrounds who are entering the sector today becoming partners in their firms, executing exits, and having a true influence on the industry.”
According to Nikita Thakrar, Included VC isn’t an institutional VC fund, clarified, but a unique 12-month educational fellowship program. The Included VC is also working with other organisations with the same goal to make VC more diverse.
“For example, one of our Community Partners in the first year was Diversity VC, a non-profit network of diverse VC professionals who work together to open up VC to broader communities and help firms hire from more diverse backgrounds.”
The fellowship is funded by an international consortium of Venture Capital Partners and Sponsors including Creandum, Daphni, Enern, K Fund, Mangrove Capital, M12 – Microsoft’s Venture Fund, Notion Capital, Seedcamp, Santander Innoventures, Wilson Sonsini Goodrich & Rosati.
Can VCs create an inclusive environment?
A lot of people who care about inclusion and equity have insisted that the world of venture capital needs a significant culture change. Well, in this regard, Nikita Thakrar explains, “In the short term, VCs must ensure they are transparent about their criteria for investment and implement clear guidelines on what they require from their portfolio in regards to diversity to generate change. This doesn’t mean treating investment as a tick-box exercise, it means utilising a diverse panel of VCs to reduce pattern matching and intentionally ensuring a more varied group of businesses receive investment. As alluded to before, this won’t just increase diversity in the industry, it will also result in higher financial returns for your firm.”
She further added, “In the medium to longer-term, there are many important things VCs can do to create lasting change. They can diversify their recruitment pipeline by implementing intentional analyst positions or apprenticeship schemes for people from diverse backgrounds; they can also seek out training or consultancy to help eliminate unconscious bias from within. Certain excluding practices must also be reassessed, for example, many founders rely on family and friends rounds to get their startups off the ground, while those from less privileged backgrounds may not have access to this early-stage funding. VCs can counteract this with specific pots of money for pre-seed businesses with diverse founders; this will help to create a larger pool of genuinely innovative businesses, not just services, products and companies built by the same kinds of people.”
Main image credits: Included VC