The U.K.’s Treasury Select Committee last month released a report on the diversity — or lack thereof — of the nation’s venture ecosystem. Black founders there receive less than 0.4% of all venture capital, and women founders receive around 2%, the report found.
The report called such dismal stats “unacceptable.”
Venture capital firms are dominated overwhelmingly by white men and the receipts of venture capital funding are even more unrepresentative of the wider U.K. population in terms of gender and ethnicity. While there have been some improvements, it is happening far too slowly and affecting rapid change should be viewed as a priority by government and industry.
And it’s not just in the U.K. In the U.S., funding to Black founders in H1 fell 40% from a year earlier — of the $75 billion invested in the first six months of 2023, just $565 million was raised by Black founders. And women in the U.S. consistently raise just 2% of funds allocated in any given year. As TechCrunch+ has frequently reported, firms and investors have taken only a few steps to create a more equitable landscape, but financial incentivization and a push from the government could help them go all the way.
Brandon Brooks, a founding partner at Overlooked Ventures, said venture capital is already on the minds of many lawmakers in Washington. He said he was summoned to a hearing in April to discuss the U.S.’ venture capital landscape.
Senators took an interest in the sector after the collapse of Silicon Valley Bank in March, looking to find more ways to impose regulation. During the hearing, some senators had qualms with the lack of funding and opportunities going to their own constituents. “Now that it’s been brought to their attention in a very public way, they’re going to start taking action,” Brooks said of how policymakers are now showing more interest in the industry. “We can now use [the U.K.] report as a guideline to say, ‘let’s do something similar in the U.S.’”
Ladi Greenstreet, the CEO at Diversity VC, was one of the many summoned by the Treasury Select Committee to share his experiences in the U.K. venture ecosystem. The Treasury had already responded to the report, saying it would consider the suggestions of its select committee. “But at the end of the day, it’s politics, so I can understand that a whole bunch of other things must happen for this to be put through,” Greenstreet told TechCrunch+.