Camilla Sievers (Qi Health, Female Founders)
More and more startups go through their phase of initiation with accelerators and incubators; dozens of these institutions are appearing each year, many with a specific focus on an industry, a particular group of founders, or a geography. We spoke with three accelerator experts: John Lynn, who has built many accelerators over the years with Cela out of New York; Camilla Sievers from Female Founders in Austria; and Kevin Liu, investor in San Francisco for Techstars. We asked them about the role and responsibility of accelerators in considering DEI. We also discuss unconscious bias, opening up the funnel, and the importance of fostering not only diverse hiring and accelerator intake, but also inclusive practices within the accelerators and portfolio companies.
Interviewed December 2020
Building Community for Women and Support for Diverse Founding Teams
Erika Brodnock (EB): Camilla, you’re a part of the Female Founders accelerator in Austria. What motivated you to start at FF and what are the aims of the program?
Camilla Sievers (CS): I became part of the startup world from early 2013. At that time, while there was only a small ecosystem in general, there was for sure no visibility for women at all, no female role models, no network, no female investors—none of that. As these things go, the couple of females that were in the space in continental Europe found each other very quickly. We immediately saw that there’s huge potential in this market because people don’t know that they have a place to come to, where they will be understood and welcome. So we want to encourage women to become part of the industry, to have role models and mentors and people they can talk to about ideas and about problems that they’re facing. We started by building a community for women to meet each other.
Now the core of our program, the mission of our accelerator, is, obviously, to foster diverse teams across Europe. We all know female-led startups or even diverse teams aren’t funded. They, at the moment [in 2020], get between 2% and 3% of all VC money. This is crazy when we also know that they tend to outperform male-led startups by two to three times. We don’t just focus on female-led teams but diverse teams more broadly, and then the potential within the marketplace becomes even bigger.
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We believe that biased investors or investor networks, where women are not represented as much, are a core reason why women are not put in positions where they are actually visible. So diverse and female-led teams have a much harder time to raise capital to get into this network that is very much male-driven, and find the resources that they need. That’s where we come in: we help them build the network, and meet role models and mentors. We help them become investment ready, which is at the core of our program, and then help them with the fundraising process.
The Role of DEI in Setting up New Accelerators
Johannes Lenhard (JFL): John, you’ve helped quite a few accelerators over the last five years get off the ground. How important are different principles of diversity, equity, and inclusion when you set up a new program, and why is that something that you care about?
John Lynn (JL): We believe that the essential function of an accelerator is to systematize access. So it’s inherently a tool that can be a vehicle for inclusion and diversity. Installing an accelerator system that can be applied to address the problem of inclusion and set up in the right way is essential to a good accelerator, even if it’s for a homogenous group. I think from the perspective of what makes an accelerator work, being able to understand what kinds of access someone needs and prepare their contact with your network to achieve that need—that should be at the core of an accelerator. But from the other side of things, it’s also what makes accelerators a really good tool for solving the problems of diversity to some extent. So not only is it something that makes an accelerator work, but it’s also a resource that’s only beginning to be tapped in the right way to solve this greater problem.
Strategic Commitments and Working with DEI Data
EB: Kevin, you’ve been with Techstars for more than two years and you mentioned before that you’re doing some interesting things around DEI. How important is it to you, and can you go into the specifics of what you’re doing to increase DEI in your programs and investments?
Kevin Liu (KL): At Techstars, DEI is very important to us. Over the last few years, we’ve done various efforts at the strategic level. For example, we kicked off our 1,000 diverse CEOs initiative. The goal is to invest in 1,000 diverse CEOs through our accelerators by 2026. This has been primarily led by our head of D&I, Andrea Perdomo, and she’s done a fantastic job to push that create a culture of awareness for D&I within Techstars.
From the investing side of things at Techstars, we do want to have high percentages of companies that do well financially. So at the end of the day, we as investors push DEI because it has been proven to be good for startup businesses, too. That is an opportunity point that we do want to push on. That is also very much in line with our overall philosophy and vision. When we began Techstars in 2007–2008, the goal was to go into a market and help entrepreneurs and places that historically were not seen or supported; our founders did not focus on the coastal cities. Most of our programs are in the Midwest here in the United States.
One other observation I want to bring up is this: if you’re not tracking it, you’re not going to improve it, right? So, DEI is something that we do track. So, you know, looking at my dashboard right now, and some high level stats, I can present here, about the kind of companies that apply and are accepted, the makeup of teams. And we have good news there: close to 30–35% of teams that are accepted into our programs have one or more female founders in that mix. Another interesting stat: about 40% of the companies that are accepted have one or more underrepresented founders from the race and ethnicity side.
Now that we know that, what do we do with this data? How do we increase the numbers? I’m looking at the questions right now. The problem of increasing a number and widening a pipeline is not just about the portfolio and the companies in our program; it is also about the decision makers. We are always actively trying to increase the number of manager directors that we have in our pool that are female or come from underrepresented backgrounds.
One final thing I want to mention is the work we do with portfolio support. A lot of the work we do is post-program support work. How do we help companies when they graduate, go out, and find capital? We do have active programming, where we help connect founders to the right investors. One of the parameters that we recently introduced is, for instance, if you’re a female founder and a female-focused fund, we will make that connection more systematically than we have done in the past.
Tackling and Revealing Unconscious Bias
JFL: Camilla, you have already built in a certain bias in your accelerator given your specific focus. And Kevin, you just talked quite a bit about how you’re trying to widen your lens as much as possible. But do you believe that you have had unconscious bias in your programs before and that you have been able to eliminate it?
CS: We explicitly talked about certain biases we needed to avoid and eliminate. We also went the other way and tried to not completely overcompensate; we decided that we didn’t want to have a female-only funnel, a female-only investors network, a female-only venture partner network, ambassador network, etc. It needed to be diverse, as we can only achieve our goals in equality if every stakeholder (and sex) gets involved and contributes to the conversation. We believe that in terms of age of gender, ethnicity, and probably also life experience, we need to be diverse in order to build the best product and I think we are on a good way to raise awareness about bias and be mindful in our day-to-day operations to foster an unbiased environment.
JL: In the overall ecosystem, we see the element of unconscious bias permeating many business relationships. It is especially hidden in language—the culture of emailing and calls (VCs are known for using subject-only messages, or messages in the body of an email that have no capitalization, punctuation, greeting, etc.), entrenched terminology (almost any startup term: hustle, scalable, innovative, disruptive, etc.).
We’ve seen coordinating direct interactions between diverse entrepreneurs and key stakeholders like investors or customers has been a high-cost but impactful solution—and is ever-present in accelerator program experiences. Our own Cela Office Hours series focuses on producing direct interactions between diverse founders and mentors that identify the same way as the founder. Finding mentorship that identifies the same way as the founder is the top problem of diverse entrepreneurs (next to capital), so we’re able to address it by isolating this key connection activity in accelerator programs. This is a crucial part of what has made the access elements of acceleration central to our belief that accelerators offer a missing piece to education, generally.
Best Practices for Widening and Filtering the Funnel
EB: In the interest of sharing good practice, what are some of the key processes that you are using in your respective programs to widen participation and filter applications?
KL: As Techstars evolves, we’ve played around with many different methods around sourcing companies into the accelerator programs. Historically, sourcing was done very locally, the managing directors would go out sourcing companies; these days, we have a central sourcing function with a team of people who do sourcing very broadly. What we are trying to do is engage in a more systematic discovery process of what opportunities are out there; we believe that doing this centrally can help with eliminating some of the more local biases. So the sourcing effort now involved a lot of different puzzle pieces (in addition to MD-led sourcing efforts) to achieve this goal: it is everything from having associates go through conference schedules, looking at relevant companies in Pitchbook (and Crunchbase), and plugging into special interest forums—for example, Techstars worked with Barclays to run their Female Founders First program. The global pipeline team aggregates those leads and then distributes them to the MDs, making sure they’re a fit for specific programs, corporate partners, and themes that the programs are focused on. So that’s a big piece we’ve done in the last year or two to invest in some central resources that we hope will yield a lot of longer term benefit in terms of increasing the diversity of our sourcing channel.
JL: A concrete step for every accelerator is to have a systematic process for applications, and to minimize warm introductions. What you see happening a lot is that a system or process is lacking completely; the investors see a startup out on a platform or an article and they hunt them down. The number of startups that are applying and getting in is often quite small, there are accelerators that get thousands of applications and half of the 50-company cohort that gets into the program has been found in other ways, based on the personal preference of individuals. So there should be an institutionalized application process that every company has to go through and that is influenced by a large group of people. The diversity of decision makers in that process can again eliminate a lot of bias.
Encouraging DEI in Portfolio Companies
JFL: For portfolio companies, or the companies in the accelerator, how do you think about D&I and address it there? What are tangible actions when it comes to increasing DEI in the companies?
JL: This is right—while accelerators can help produce progress on DEI, the ultimate outcome for the ecosystem is that companies themselves can bring on more diverse leaders and team members. One of the key struggles of entrepreneurs is that they are looking to move too fast—helping them realize that they themselves are investors of time, energy, skills, recruitment, and that they should take time and care in making those investments, is a fundamental concept that can help them build more diverse teams early on. Accelerators are in a key position to make this case, and to start making it a part of the startup’s DNA by including it in the curriculum or other program activities. Next, attaching key outcomes to greater diversity can work as well: diversity can help attract better talent, capital, and overall make for a more comprehensively creative and productive environment.
CS: It starts with the startup team itself; we need to foster the mindset in them that it is in their biggest interest to increase diversity. At the end of the day, they will make the decision on who to employ. Again, role modeling can play a big role here, we need to show them what works and connect them with the right people to implement change if need be. At Female Founders, we have a job platform, where they can put up job posts, for instance. We actively share best practices on how you can diversify your funnel. We give them some input on how to win female talent, for instance, because women have to be addressed differently.
And once you manage to recruit, for instance, women, you have to be aware that this talent needs to be supported so that these people stay on. One way of encouraging thinking through the whole process from diversity to inclusion is to suggest to companies to nominate a diversity and inclusion officer. They are responsible for diversifying the recruiting but also the development of the team; it is important to grow a feeling of belonging and openness. Diversity needs to be fostered every day and lived every day. That is why we also focus on personal development topics within the accelerator to address these unconscious biases that one might have, and how to be more aware of them.