Diversity pays off: increase your returns
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Diversity pays off: increase your returns

Many startups are led by men. This leaves opportunities, as research shows that diversity within your startup leads to higher returns. To increase diversity in the world of startups, Techleap.nl has drafted the diversity statement Fundright. NOM signed the statement along with 40 other parties. In this article you can read what that means.

The challenge

Startups get a lot of opportunities in the Netherlands. But if we look at the numbers, we see that it is a world where men play a predominant role. For example, 94.3% of growth money between 2008 and 2019 went to startups with only male founders. Because there is so much to gain in this area, Fundright's primary goal is to give women entrepreneurs fairer opportunities. Not necessarily because there should be more women at the top, but because this will help raise the overall level of startups in the Netherlands. The underlying idea is to create more mixed (management) teams, which, according to Techleap chairman Constantijn van Oranje, are "more versatile, resilient and stronger."

The problem of implicit bias

The best person for a position should fill that position, whether a man or a woman. But in the world of startups, there is something called "implicit bias. Because often, a lack of diversity is not a conscious choice, but comes almost naturally. Unconsciously and unintentionally. After all, there are more men working in this world than women. And male investment managers search their own network, full of men, for a suitable member for the supervisory board of the startups they invest in. Or a man gives input to a job posting for the management team, which is therefore full of "masculine" terms that appeal to men. As a result, fewer women automatically respond to a job posting. And that vacancy is then posted in the company's own network. Exactly: a network with mainly men.

Diversity in startups pays off

While diversity in startups can actually be very good. A study by the Center for Collective Intelligence at the Massachusetts Institute of Technology found that the more women on a decision-making team, the better the outcomes of those decisions. The suspicion is that this is because women have a better understanding of the different perspectives involved in a decision. Making diversity negotiable should reverse the effect of bias so that more objective decisions can be made.

The rule of 35%

Fundright's diversity statement includes a target for partners to make results measurable: portfolio companies must have a management team made up of at least 35% women within 3 years. The same percentage must apply to the investors themselves in 3 years.

Looking at the situation at NOM, there is plenty of work to be done. While our own investment team consists of 32% women, only 9% of our portfolio companies have a management team consisting of at least 35% women. In fact, 88% have management teams made up entirely of men. In order to improve these ratios and thereby promote the returns of innovative companies, we want to get diversity on the agenda.

We have the ambition that all startups and scaleups in which we put or have put money into have a management team with at least 35% women within 3 years. Our own investment team should also have at least 35% women within 3 years. By making the subject discussable, we are going to discover how we can (a) include it in our own HR processes and (b) get it on the agenda with startups in the Northern Netherlands. Because a broader view makes for better decisions. Because diversity in your management team pays off.

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