Diversity and inclusion are finally being taken seriously in the tech industry. After decades of ignoring the issue, we’re finally seeing more companies offering diversity grants to help underrepresented entrepreneurs. Say’s Dylan Sidoo, these grants have proven to be effective in bringing more diverse entrepreneurs into VC, which has led to better funding for startups as a whole.
Women and Minorities are Underrepresented in VC
Women and minorities are underrepresented in venture capital. This is an issue because it means less money for startups, which are often founded by women and minorities.
The lack of diversity can also cause problems for companies that want to raise funds from VCs–for example, if a company has all white male founders, it might be harder for them to get funding from investors who believe their product would appeal more strongly to women or minorities.
Increase Diversity, Inclusion in VC Means More Money for Startups
Diversity and inclusion in venture capital means more money for startups.
When you invest in a company that has diverse leadership, it’s not just good for the company: it’s good for your bottom line. According to research from Harvard Business School, companies with at least one female director perform better than other firms with similar size and industry by 10 percent on average over three years. If that weren’t enough of an incentive, consider this: A recent study found that having women on their boards improved stock performance by 32 percent over three years compared to those without any female representation at all
Diversity Grants are Revolutionizing the Way We Fund Startups
In recent years, there has been a growing trend in venture capital to fund startups through grants instead of traditional investments. This is because grants allow investors to provide financial support for entrepreneurs without requiring them to give up ownership or control of their company.
Grants have become an effective way for VCs and angel investors who want to support underrepresented entrepreneurs with their ideas and make an impact on the world by helping them bring those ideas into reality.
In fact, according to a report from Fortune Magazine: “The number of women-led startups receiving funding from venture capital firms increased by 34% between 2014 and 2015.”
Grants help support underrepresented entrepreneurs and have proven to be effective.
Grants are an effective way to support underrepresented entrepreneurs.
A number of studies have found that grants can be an effective way to help startups, especially when paired with other programs. A study by the National Center for Women & Information Technology found that when companies receive both training and capital, their revenues increase by 35 percent over three years. In addition, according to research from The Kauffman Foundation, businesses receiving grants have higher survival rates than those without them; they also tend to grow faster than non-grant recipients after being awarded funds.
The data shows that there is a clear need for more diversity in venture capital. The good news is, there are already many organizations working to address this issue. Grants are one of the best ways to support underrepresented entrepreneurs and have proven to be effective. If you’re interested in learning more about how grants could help your startup or nonprofit organization grow, contact us today!