Connectd听poll finds Covid-19 pandemic is 鈥榖reaking down barriers鈥� for early-stage听funding.
听
Discrimination in the Startup Community
Nearly three-quarters听(74%)听of entrepreneurs and investors听say they have witnessed听discrimination within the听startup听community,听harming the growth of听many early-stage businesses.
That鈥檚听according to a听Norstat听poll of early-stage entrepreneurs听and investors听commissioned by听Connectd,听the online platform bringing together听startups, investors and business mentors.
However, it听is believed that the Covid-19 pandemic听has听created听a turning point where investors focus more on the credentials of the entrepreneur rather than age,听ethnicity,听gender, sexuality, disability听or religion.
Online Connection
Almost three quarters (74%) of investors polled said they expect to complete more deals with businesses from听across the UK听in the next 12 months, rather than relying on traditional networks based in and around London.听Connecting with potential business partners online rather than in person is seen as a key driver for this.
The study found a third of businesses run by Millennials had been forced to pivot their business model and had witnessed growth.
Supporting this, almost half of investors said they put money into more companies in the last 12 months than they did before the pandemic. As a result, 84% said they expect to invest the same or more this year.
Roei Samuel, founder and CEO of听Connectd, said: 鈥淯nfortunately, until recently听growing a business was as much about who you know as what you know, but this study tells us that entrepreneurs and investors alike are breaking down barriers that have traditionally held back听so many entrepreneurs.
鈥淲e see a world where听startup听founders, investors and business mentors have far more diversity听鈥撎齛nd听it isn鈥檛 simply the 鈥榦ld white male鈥� club that it can often be accused of.听听Instead,听we want to听connect听entrepreneurs听with investors and business advisors from all walks of life.鈥�
Carli Sapir, founding partner of Amboy Street Ventures, a VC firm dedicated to supporting growth of sexual health and women鈥檚 technology听startups, said: 鈥�12% of VC funding goes to听startups听with co-ed founders, which drops to less than 2% for all-female founder teams. This is a direct reflection of the demographic of VC decision makers: in the US, only 5% of VC decision makers are women. At Amboy Street Ventures, we have committed to make 70% of our investments into companies with at least one female founder.鈥�
Diana听Greenhalgh, Co-founder of听MyBespokeRoom,听a technology platform changing the world of Interior Design, said: 鈥淗istorically, being two female founders, we have felt the fundraising process to be dominated by a certain type of male who often finds it hard to understand the听sector, and听would predominantly ask very gender-based questions.鈥�
Amy Williams, founder of Fem-Foundry, said: “For every 拢1 of venture capital investment in the UK, all-female founder teams receive less than 1p, whereas听all-male founder teams get 89p, and mixed-gender teams make 10p of that 拢1.听You can see that discrimination will have been present in听startups听for this to be the standard ratio.听At current rates, for all-female teams to reach even 10% of all deals听it听will take more than 25 years, so we鈥檙e looking at 2045. It鈥檚 because of this forecast that I鈥檓 dedicated to helping women to upskill, network and to minimise that time scale.鈥�
