How This Book Came About

10 minutes, 7 links


Updated February 11, 2023
Better Venture

Erika Brodnock is an award-winning serial entrepreneur and philanthropist. Following her MBA, she was Research Fellow at King’s College London, and is currently finishing a PhD at the London School of Economics and Political Science. Through her work at the intersection of technology and wellbeing, Erika specializes in building products and services that disrupt outdated systems. Erika is co-founder of Kinhub (formerly Kami), an employee wellbeing platform focused on enhancing equity and inclusion in the future of work. Erika also co-founded Extend Ventures, where she leads research efforts that aim to democratize access to venture finance for diverse entrepreneurs.

Johannes Lenhard is a researcher and writer based in London. Following his PhD at Cambridge, he spent three years during his postdoc researching the ethics of venture capital between Europe and the US. His first book, Making Better Lives—on homeless people’s survival in Paris—was published in 2022. He regularly contributes to journalistic outlets such as Prospect, TechCrunch, Vestoj, Aeon, Tribune, The Conversation, and Sifted. Most recently, he is the co-founder and co-director of VentureESG.

Johannes’s Work and Research

My research on the ethics of venture capital (VC) began in the fall of 2017. I started interviewing venture capital investors, first in Europe and then all over the world between Silicon Valley, New York, London, Berlin, Nairobi, Lima, Tokyo, and Paris. Over the past five years, during my post-doctoral research at Cambridge, I’ve spoken to more than 300 partners in venture capital funds across stages, geographies, and asset classes. Before I began this research, VC was a place to earn some money on the side for me; I started as a “student temp worker” for a corporate VC fund when I moved to London. Over the years, I have supported and consulted a number of VC investors in areas as varied as reporting, fundraising, and as a deal-flow generating “venture partner.”

At first, my interest in VC was abstract: I wanted to use my contacts to shed some light on what venture capitalists do, who they are, and why it matters. It seemed to me not enough scrutiny has been on these “kingmakers” of big tech. By 2019 I had already spoken to almost 100 VCs, but it wasn’t until I arrived in Silicon Valley that summer that my eyes were opened to the issue at the core of this book: the absurd lack of diversity, equity, and inclusion (DEI) in VC and the related homogeneity across the tech industry.

During my first conversations in Silicon Valley, I always asked about what problems people thought the industry was facing at the time; the biggest issue people pointed out to me (apart from already skyrocketing valuations) was DEI. I went back to my own sample of interviews. I was stunned: out of my first 100 or so interviews, five were with female VCs, and even fewer were with people of color. I had also met most of the VCs through “elite networks,” as my university and industry contacts provided warm introductions (referrals or endorsements). That was the time when I started to explicitly reach out, first to female VCs, and increasingly to a wider set of investors who weren’t either male or white or elite-educated. It was also then when I first started writing about my findings.

When I arrived back in the UK later in 2019, I was curious to compare the European ecosystem to Silicon Valley. I reached out to and asked for introductions to DEI champions. That’s how I met some of the people featured in this book, like Maren Bannon of January Ventures; Sophia Bendz, who is now at Cherry Ventures, but at the time was the first female partner at Atomico; and Check Warner, founder of Diversity VC and GP at Ada Ventures. One interview I’d scheduled was with Erika Brodnock, the founder of a company called Kami (and before that Karisma Kidz), to learn from her about intersectionality and racial disparity in the UK tech ecosystem. We connected immediately over the issues, straight away got to write our first piece together for Sifted. I was absolutely taken by Erika’s experiences—having raised five children, started two companies, and just embarked on the complicated journey of a PhD at the London School of Economics (LSE)—and had found my match to start working on this book.

And it was an absolutely necessary match, obviously: I am a white, privileged man with ten years at one of the best universities in the world under my belt. Unlike in many other contexts where “expertise” comes with the privilege to speak, in this particular case you might think: why listen to me on questions of gender, racial, and all kinds of other social justice and equality? What do I know about diversity, equity, and inclusion? The good news is that you won’t have to listen to my voice for too much of this volume. Not only does my co-author Erika Brodnock have all the experiences I am missing (more on that next), this book is first and foremost a book of interviews, the collection of an almost two-year long journey through the worlds of venture capital and tech between the US and EU. My privilege helped us to go on this journey—to get into many rooms, to listen, to ask questions, and to distill what we heard. I hope the result helps you, the reader, gain valuable perspectives and participate in positive change.

Erika’s Founder Story and Research

My background is incredibly different from Johannes’s; some might say it’s the polar opposite. I am a Black female, born and raised in Streatham Vale, South London. I was educated in comprehensive schools and, despite being advanced a year in secondary school for being gifted and talented, I stopped education at A-Levels due to circumstances. I went to university for the first time in 2017 to study for an EMBA at the University of Surrey. Having graduated within the top percentile of my class, I wrote my PhD proposal for the development and deployment of algorithms that would enable an analysis of the allocation of capital by the UK’s venture capital ecosystem as pertaining to the perceived gender, ethnicity, and educational background of venture-backed founders. I was offered places at several leading universities and eventually decided to read at the LSE, where I was awarded a fully funded studentship and have been privileged to work with Professor Grace Lordan in the Inclusion Initiative, and am supported by leading figures who are committed to creating tangible change in the venture capital and private equity industries.

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Over the last decade, I have been able to co-create two for-profit enterprises as well as two non-profit organizations—one of those is Extend Ventures, where I am co-founder and head of research, alongside the incredible co-founders Tom Adeyoola, Patricia Hamzahee, and Kekeli Anthony. Our research outputs, including the Diversity Beyond Gender report, have succeeded in illuminating many of the stark disparities in access to funding, in ways that have not previously been possible. As a result, we have been able to partner with Atomico, Nasdaq Entrepreneurial Center, JP Morgan, and Innovate UK to support the global analysis of capital allocation to diverse founders. This research has been credited with being a catalyst for many new funds receiving funding that is specifically for diverse entrepreneurs.

Prior to Diversity Beyond Gender being released, I had not been able to raise capital for my entrepreneurial endeavors. Even in 2019 and early 2020, when my co-founders at Extend Ventures included an exited entrepreneur, an investment stalwart, and a Bain consultant with degrees from Oxford, Cambridge, and Columbia, while I was at the LSE, as an all-Black team, we needed to bootstrap the first research piece to “de-risk” our proposition. Going back further to 2015 and 2016 when I sought Series A investment for my first company, Karisma Kidz, it was similarly impossible to raise money.

Since the Diversity Beyond Gender report, things have improved. We tracked one UK Black female who had raised more than £1M in capital for her venture between 2009 and 2019. That number has risen to more than 16 Black women in the two years since the report was published, however, a significant proportion of the 16 have not been able to raise this money from venture capital funds, having instead to rely upon angel investors who are keen to expedite change.

When Johannes approached me with the opportunity to co-author this volume, I saw an incredible opportunity. This is an issue that goes far beyond just me or the other Black women who are struggling to raise money for industry-altering and immensely profitable ideas. This volume allows us to share the stories of people who bring more diverse experiences to the venture capital and tech industry, as well as spotlight those who promote the fair and equitable allocation of the capital and connections that entrepreneurs need to thrive.

Why Diversity in Venture Capital Matters14 minutes, 41 links

Diversity Issues in VC

The National Venture Capital Association’s (NVCA) 2020 VC Human Capital Survey sampled 2,500 investors in the US, and found that 3% of partners—those with decision-making and check-writing power—identified as Black (compared to 12.6% of the US population); 3% of partners identified as Hispanic or Latinx (16.9% of the US population); 14% of partners identified as women (52% of the US population). In the UK, figures based on a similar sample of around 2,100 venture capital investors mirrors this picture. For the UK, Diversity VC’s latest survey from 2019 reported that only 13% of partner roles are held by women (compared to 47% of the UK labor force overall), and 83% of all UK venture firms have no women in their decision-making bodies. Further, the number of women on investment committees has not improved since Diversity VC started reporting on these numbers in 2017. The study found that just 8% of all VCs in the UK are Black or of mixed heritage (versus 13% of the population in London, where most of the UK’s tech sector is based), while 12% are Asian. As we’ll discuss later, these numbers have remained stagnant since 2020, and some have shrunk to even smaller percentiles.

The disparities in other parts of the VC world are similarly pronounced: a 2022 report on the European ecosystem, “European Women in VC,” found that 85% of VC general partners in Europe are male, with the UK (87%), Southern European (90%), and Central European countries (90%) trending even above this average. Even more telling is the “fire power” that certain investor groups have, meaning the overall share of the money in VC; according to the same report, women in Europe control only 9% of capital (5% in the UK, 6% in the Nordics). Indicative numbers for Latin America and Canada tell a similar story. Class is a significant variable as well, and the numbers are staggering: in 2018, 40% of US VCs had degrees from Harvard or Stanford; in the UK, one in five VCs went to Oxford or Cambridge (compared to 1% of the UK population average). As this book will reveal, the closed networks of elite institutions play a large part in keeping the industry homogenous, with many people intentionally locked out.

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