"What would it tell us that we don't already know?" – VC scraps diversity report in favour of action plan

The venture capital sector's glaring lack of diversity and equality – both in terms of representation and investments – remains a persistent thorn in the industry's side.

For the past five years, the situation has been highlighted and scrutinized in the recurring Funding Gap Report from Nordic investment firm Unconventional Ventures, helmed by Nora Bavey and Thea Messel. As the title suggests, it's rarely uplifting reading – at least not for those who believe in inclusion as a business opportunity.

But 2024 will see no report. In a LinkedIn post, Bavey explains the decision:

"So why aren’t we publishing the report this year? Because another report with the same message won’t fix the problem. What we really need now is an honest conversation about the systemic barriers that create this gap in the first place."

"And no I don't mean another "mentorship program" for founders or investors looking to fix this or are affected by it, but one more for the 90% of the gatekeepers."

"We could present neat charts and graphs that illustrate how the gap persists, despite all the initiatives, panel discussions, and promises of change. But honestly, what would that tell us that we don’t already know?"

A handbook for action

What Bavey is calling for is a shift in focus – from strengthening founders’ presentation techniques, networking skills, and inclusion strategies, to putting the real decision-makers in the hot seat.

The result is The UV Blueprint for Inclusive and Impactful Investments, a practical guide for the actual power players: LPs (limited partners) who invest in funds, and GPs (general partners) who run the funds and source new companies to invest in.

When Impact Loop reaches Bavey on the phone, she's in London attending "yet another conference". She's noticeably tired of the talk – now action is required.

"This is basically our own playbook, it's how we've built the structure at Unconventional Ventures. Now we're sharing it with everyone who's serious about change," she says.

The frustration over the slow pace of progress has shifted the perspective to addressing the practical work behind the scenes.

"The difference today is that more people are coming to the dance and participating in the conversations. But there are still far too few actually acting to mobilise capital. We've had many years of hand-holding and educating those affected by lack of inclusion, while 90 percent of all gatekeepers avoid investing more broadly."

Like putting lipstick on a pig

Nora Bavey is well-versed in media logic and readily delivers punchy quotes.

"We want to contribute structural and clear steps that LPs and GPs can take today, while also strengthening founders in their situation. And it's not about another advisory call about their pitch deck - that's like putting lipstick on a pig."

How do you want to support them instead?

"We need to give founders more power. An important start is doing their own due diligence on investors to decide how to spend their time when looking for capital. Look at how the existing portfolio companies look and ask about the investors' inclusion strategy."

What's the message to the LP crowd?

"We've lived with this gap for far too long. The situation has become accepted, despite all figures showing what business opportunities are being lost. If you as an LP are serious about capturing the full potential - then ask your GPs or funds and demand they set up goals, criteria and KPIs for inclusion. Another workshop won't cut it. We're done with just talking."

The topic has become a circus that everyone likes to participate in, according to Nora Bavey.

"The situation isn't improving, despite us living through a transition that needs all the ideas and innovations we can get to market. We don't have time to talk anymore. The era of symbolism is over."