Diversity quotas: help or hindrance to VCs?
Tags: Investing, Diversity In Tech, Venture Capital, Diversity

Diversity quotas: help or hindrance to VCs?

Why does diversity (and inclusion) matter?

First of all, by no means is our fund Acrobator Ventures an authority on the subject. We do, however, understand our role within the ecosystem and that we can do our part. As a pre/seed investor we have a chance to support founders become the next job-creating tech giant.

Much has been written on the subject of the importance of diversity and inclusion in companies. Simply put, it makes sense bottom-line, culturally, morally, and from an innovation capacity point of view. An excellent resource for founders and investors alike is the work done by Atomico and Diversity VC. This report provides answers to why and how: https://www.inclusionintech.com/.

But what is diversity about for us?

From where we stand, diversity is not only about tolerance and gender equality. Diversity is also about varying experiences, backgrounds and walks of life of the people we bring together. From this perspective, gender quota may not seem to make any sense. Hiring two men from different cultural and educational backgrounds can diversify a team more than hiring a man and a woman from the same school and socio-economic background. So why does #fundright, the Dutch diversity initiative, call for a pledge by committed VCs to have more women (35%) represented in VCs’ management and board as well as among the founders they invest in? (source: https://fundright.nl/about-us)

The answer is simple: the one statistic a company is allowed to measure, pretty much wherever in the world it operates, is gender — male/female. In the US, for instance, companies can measure people of color in their workforce. In Europe, this is illegal. Topics like sexual preference are more or less taboo or even dangerous, depending on the country in question. The funny thing is that by implementing a gender quota, companies end up with a culture that is more conducive to becoming a truly diverse and inclusive company. And reap the benefits from that.

Diversity and inclusion to us at Acrobator is the foundation that is necessary for a company and all its stakeholders to thrive.

What is essential when choosing which startup to invest in?

We work with many businesses, but our main focus is investing in startups founded by Russian- or Dutch-speaking entrepreneurs. In most cases, our Eastern founders end up moving West with their company’s headquarters. Our sweet spot lies in pre/seed to early Series A rounds, up to €5 million. What else do we like? Our focus is on marketplaces, SaaS, and platforms, since we can add the most value in those sectors.

When deciding where to invest, we are looking for teams with deep sectoral experience. Does the team need to be mixed gender? Not necessarily. Should the diversity topic be up for discussion and on the agenda? Yes.

Acrobator Ventures Fund II Portfolio

As of now, our Fund II portfolio includes four companies: Let’s Enhance, StudyFree, Respeecher, and Leapfunder. Let’s Enhance (female CEO: Sofi Shvets) is a Ukrainian startup that developed an online AI-driven service that increases image resolution without losing quality. StudyFree (female CEO: Dasha Kroshkina) is an EdTech startup that enables students worldwide to get admitted to study abroad programs and obtain financing through scholarships and grants. Respeecher created a wicked voice conversion technology for a spectrum of b2b markets. Leapfunder provides financial products that aim to facilitate investments by angels into startups at the earliest stages.

Acrobator Ventures’ founder Bas Godska has made nearly half of his seven angel investments this year in companies with a female (co-)founder:

Three are female founded: design work platform-as-a-service Awesomic.com (Ukraine, co-founder Stacy Pavlyshyna), covid-19 IoT device Aura-aware.com (Netherlands, founder Janneke van den Heuvel) and IT-recruitment platform 6nomads.com (Russia, co-founder Ksenia Busheva).

(Ukraine, co-founder Stacy Pavlyshyna), covid-19 IoT device (Netherlands, founder Janneke van den Heuvel) and IT-recruitment platform (Russia, co-founder Ksenia Busheva). Four are male founded: omdena.com (collaborative platform for AI solutions, 1700 strong team from 86 countries), memoryOS.com (mnemotechnic VR game/method), instreamatic.ai (voicetech), gemms.io (SME accounting).

In addition, Acrobator.com, the Dutch/Ukrainian growth hack sister of Acrobator Ventures, is led by female managing partner Kseniya Negrutsa.

Each of the companies covers a different market. The companies come from three different countries. Five out of the abovementioned companies have a gender-wise diverse or female-only founder team. We just couldn’t deny the temptation to invest in such excellent ideas. Does this mean our work is done? Can we pat ourselves on the back? No. We need to get more diversity within our team (two men), our advisors (very male-dominated), and partners. We need to find ways to work with our current and future portfolio companies to help them diversify.

Acrobator Ventures partners Joachim Laqueur (left) & Bas Godska (right)

Diversity is a sensitive topic. All of us need to improve. Mostly by self-education and taking an effort into getting to know people we work with better. All in all, we have to get out of our comfort zone to succeed. That includes meeting and cooperating with people that are different from us.