'There's an economic value which is under-exploited' – why this VC is raising €100m to back underrepresented founders

The right-wing backlash against Diversity, Equity and Inclusion (DEI) efforts has been quite hard to miss. From major corporations quietly shelving their DEI programmes, to the new US president railing against the very concept of diversity itself, it feels like a time where calling for more inclusion in business and finance can be a risky thing to do.

But while the US voices may be the loudest on the subject, they are by no means representative of many other parts of the world.

"You know, diversity is very diverse," says Anita de Voisins, venture partner with Paris-based VC firm Daphni.

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De Voisins and her team are right in the middle of raising funds for an initiative targeting underrepresented founders in France, named Time4. The aim is to raise about €100m and later this year begin targeting 100 early-stage startups founded by people from the kinds of socio-economic backgrounds in France that often get overlooked.

The initiative is also partnering with three other organisations, the non-profits Live for Good and Les Déterminés, as well as the prestigious HEC Paris business school, to provide a support programme to the founders.

"There are talented entrepreneurs who are still [overlooked] by the venture capital system, especially in France, for many different reasons," de Voisins tells Impact Loop. She says there are many economic opportunities to be found investing in such founders, but for that to happen "we have to change the way venture capital funds identify deals in France."

We have to change the way venture capital funds identify deals in France

A regional focus on inclusion

Daphni's fund addresses a number of diversity-related issues that are very salient in the French context. One of the most important is the power of the prestigious business school system in shaping the networks of 'insiders' who often get the lion’s share of funding.

At the same time, while in the Anglophone investment world there is more awareness of the value of 'outsider' perspectives, as well as the resilience and hard-scrabble work ethics of people who have faced adversity, in France those attributes remain often overlooked.

But for those who do see the value, says de Voisins, there is real opportunity. She hopes the fund will demonstrate to traditionally conservative investors that there's value in looking beyond conventional investment strategies.

"There's an economic value which is under-exploited. So if you don't come in the first [fund], you will really lack the best opportunities."

Millions in turnover

She gives the example of one young founder Daphni's been in talks with, who is from an underprivileged socioeconomic background. The founder’s startup is already doing brisk trade, with millions in turnover after just a few years, but is also benefitting the community by deliberately recruiting other staff from disadvantaged backgrounds.

"These kinds of entrepreneurs try to put some social respect in the way they develop their companies," says de Voisins, "whereas others would not think of it naturally."

Diversity is a tricky issue in France, where a secular republican legal framework informs an outlook that is often agnostic to ethnic and religious backgrounds.

For this and other reasons, Time4 takes a largely geographically-based approach, looking for founders in historically underprivileged regions of France, and in particular outside of the Paris bubble where almost all the VC action tends to take place. They also take into account more qualitative factors such as family and educational backgrounds.

Ignoring the noise

As the Time4 initiative is initially focused on this specific French context, de Voisins is – quite understandably – not interested in engaging with the global politics of diversity playing out across social media and current affairs shows right now.

Anita de Voisins believes these narratives are largely irrelevant to Daphni's initiative, which simply aims to offer a helping hand to under-served founders.

She says she is therefore not concerned about how apparent global DEI backlashes might affect Daphni's efforts and, in any case, believes that "the best projects normally emerge in the most difficult situations".

Moreover, de Voisins even sees a potential advantage amidst today's divisive diversity politics. Building up an investment fund takes considerable time and effort, particularly when convincing potential limited partners (LPs) to buy into the vision.

In this climate, de Voisins believes the hesitance some people might have about associating with the 'diversity' label actually works in Daphni's favour – since less enthusiastic investors will self-select out of the process early.

"Either you've got an LP who is really interested, because he wants to diversify his way of sourcing deals [or] it's a very rapid 'no', because they just don't want to go [in] on this subject," she tells Impact Loop. If that happens, it's simply a case of concluding "okay, fine", says de Voisins, because "then we don't lose time."