At byFounders, Diversity & Inclusion is one of the four main focus areas of our impact-awareness strategy. We believe that VCs have a responsibility to recognize and respond to challenges in society. We are committed to devoting extra time and effort to the following areas of attention:

<aside> ❣️ Our long-term goal is to democratize the opportunity to build, scale, and invest in technology companies. We realize our level of responsibility as investors and our influence in picking which ideas get funded. Hence, we are committed to fostering a culture of inclusion across our investment processes, within our internal team, amongst our portfolio companies, and across the broader tech ecosystem.

Why do we do this? We believe that a more diverse tech ecosystem will result in better products/services and strengthened economic growth - i.e., a better society for generations to come.

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We recognize a range of critical diversity-related issues we need to actively work on, including gender, ethnicity, immigration status, disabilities, socioeconomic background, age, and more. To begin with, we believe we can have the most significant impact in bridging the gender gap in VC and tech. Considering that more than 90% of VC funding goes to all-male teams in Europe (source), we have decided to initially focus on minimizing this large discrepancy. However, we’ve already started to hone in on other diversity-related issues beyond gender.

The investment process

It's our firm belief that companies with a diverse set of demographics, backgrounds, and experiences are best placed to yield great results, both in terms of value generation and financial returns. Based on the three stages of our investment process - sourcing, evaluation, and investment - we've taken specific actions to incorporate aspects of diversity and inclusion at every step.

Sourcing

We are convinced that the importance of diversity and inclusion begins at the top of the funnel. At this stage, we have the power to influence the deal flow that we attract and should consequently be accountable for the deals that we see.

Therefore, we have agreed on the following actions:

• We actively host and contribute to events, specifically focusing on diverse founders, for our existing community and the ecosystem, such as Female Founders Office Hours.
• We recruit for a diverse investment team, hoping for a higher tendency amongst diverse founders to approach us for a potential investment.
• We record the gender representation of all startups we see and track the percentage of female founders and mixed teams throughout the following investment process.

Evaluation

To improve the quality and fairness of our decision-making, we must reduce unconscious or implicit bias in our investment decision-making. By introducing ESG topics early in our conversations with startups, we also hope to encourage the founders to recognize this topic and assess their mindset to the existing issues.

Therefore, we have agreed on the following actions:

• We use a de-biased team evaluation form during the evaluation of a startup to standardize the evaluation criteria across investment professionals. It includes a range of parameters regarding their previous experiences, team setup, and skills & behavioral traits.

  • The evaluation form includes the following DE&I parameters:

• We evaluate each company based on our 8 T Investment Framework, including an evaluation of Tomorrow and Transparency.

  • As a part of this evaluation, we ask questions such as:

  Diversity and Inclusion plays a big part in this selection criteria and we expect the founders to be honest about the areas in which they need help.

• The lead on each investment fills in a responsibility perception survey, answering critical questions based on their interactions with the founders. This is our way to ensure that we ask ourselves the right questions and reduce the risk of overseeing certain team risks.

  • The survey includes qualitative DE&I questions such as:

• We ask founders to fill in a responsibility questionnaire during due diligence before investing in them to ensure that they believe in the value of diversity and strive to improve this.

  • The survey includes DE&I questions such as:

Investment

When we invest in a company, we want to ensure that the founders are committed to building responsible companies with diverse teams.

Therefore, we have agreed on the following actions:

• We made our term sheet public and ensured to have some of the most founder-friendly terms on the market while also writing it in plain English. In the term sheet, we include a responsibility clause, in which we express the importance of ESG, including DE&I. We ask the founders to commit to a range of actions. This includes genuinely caring about their effect on people, continuously striving to improve their responsibility efforts, answering an annual ESG survey, and tracking their employee's wellbeing to ensure a good and inclusive work environment.
• We include a similar version of the responsibility clause in our shareholder's agreement.

<aside> 🎯 We aspire to:

• Per fund, see a 15% improvement of the female representation in the founding teams of our portfolio.
  • % of companies invested in Fund 1 with at least one female founder: 20%
  • Hence, our target for Fund II is: 20%*1.15 = 23%
• Target the same % split in total amount of money invested as number of investments
  • Hence, our target for Fund II is: 23%

‼️ This target will be adjusted if we realise that the market is moving faster than us, since we always want our aspirations to go beyond general market developments.

As a part of the Diversity Commitment, we've also agreed that we aspire to:

• Invest a maximum of 80% of the money for new portfolio startups with male-only founder teams* (Evaluation + Investment)
• Have a maximum of 80% of startups added to our investment portfolio with a male-only founding team* (Evaluation + Investment)
• Have a maximum of 80% of startups in our dealflow with male-only founding teams (Sourcing) </aside>

Portfolio Management:

We believe that we have an opportunity to support our portfolio companies in implementing diversity measures and review their progress. Since we invest at an early stage, we have the ability to bring positive change to a company's business approach and culture from the very beginning.

Therefore, we have agreed on the following actions:

• We host a conscious scaling workshop at our Basecamp for all new portfolio companies, where we discuss topics such as DE&I and employee wellbeing.