Investing in More Women and Non-Binary Founders: Part 2

It’s been a little more than six months since we first published our blog releasing data on the gender of our investing pipeline publicly.  We are sharing an update today on our learnings because we believe transparency creates change. 

Who am I?

My name is Alexandra Gifford, and I’m Chief of Staff to the Blackbird Investments team. 

Gender equality is something I’ve always been passionate about. 

When I first saw the small amount of funding given to women and non-binary founders, I wondered if this ecosystem was for me. I had doubts there was any honest conversation happening and wondered if the problem was too big to solve. 

My first interaction with the ecosystem was through the Startmate Women’s Fellowship where I met 100 incredible women looking to work in or found their own startups. In the fellowship, I saw the results of direct action: more women got epic jobs in startups, more women joined VCs and more women founded a startup - because of this program.

Everywhere I looked, I saw people doing something big and ambitious. I decided reaching equality in funding for women and non-binary founders in our ecosystem is one of the most ambitious and important problems to solve.

I joined Blackbird in 2022 and in just 18 months, I have again seen the impact of direct action and effort. From internal OKRs to ecosystem programs to reducing bias in our processes & improving our founder experience to investing in diverse founders, the issue - and solution - is complex. 

But as Chief of Staff, part of my job is to continue to drive initiatives and keep our team accountable to our strategy and OKRs until we see the results we want to see, which is more women and non-binary founders in every stage of our investment pipeline. 

Where are we now?

In May 2023 we reported that 22% of the companies we’ve invested in over the previous 10 years have at least one woman founder, slightly above the industry average of 19% (2020-2022).

Since we started deploying our 2022 core fund in June 2022, we have invested into 22 companies (ten of which are not yet announced) and 23% of these companies (5 of 22) have at least one woman founder. Of those companies, 80% (4 of 5) are led by a woman CEO. 

Internally, we set a goal of 40% of companies pitching to our Investment Committee having at least one woman or non-binary founder.

We still have work to do to reach this goal. From June 2022 to now, 27.5% of companies who pitched to our Investment Committee had at least one woman or non-binary founder and in FY24 so far, 36.8% of companies who pitched to our Investment Committee had at least one woman or non-binary founder. 

What have we learned? 

1. There is still a lot of work to be done

We are putting a lot of effort into this at Blackbird. At the investment level, we have set clear targets for the investment team to make sure we are seeing more women and non-binary founders at each step of the investment process. 

This is a multifaceted issue that needs to be addressed on multiple fronts, including through greater transparency, but we ultimately believe it is through initiatives and programs that enable more diverse founders to enter the ecosystem earlier in the journey.

2. We need to set ambitious targets

At the top level, we need more women and non-binary founders to start companies. To drive that, we are focusing on programs like the Startmate Women’s Fellowship, Giants, Foundry and Protostars - and ensuring these programs are focused on making startups more accessible to diverse founders. 

Earlier this year, we set some ambitious targets for our programs. We wanted to have 60% of our Giants and 50% of our Foundry startups with at least one woman or non-binary founder as well as reach more diverse people for our Protostars program. 

While it is early, we are starting to see encouraging results… 

Giants

In Giants, our early-stage founder mentoring program run by Meg that supports >400 early stage startups every year to validate their idea with 100+ mentors, 55% of startups in our September cohort had at least one woman or non-binary founding member. 

In the same cohort, we saw the number of women or non-binary mentors increase to 40% - facilitating more women-to-women mentoring and continuing to build a stronger ecosystem. 

From our 2022 core fund, 40% (2 of 5) of the investments we’ve made into women-founded companies have come directly from our Giants program. 

Foundry 

In our most recent Foundry cohort run by Clare – our founder program for deep tech and biotech PhD students and researchers – 50% of startups had at least one woman or non-binary founder. 

Protostars

In our Protostars program run by Joel and Theia, where we give cash grants to young Australians and New Zealanders to complete passion projects, 67% of the most recent September 2023 were women or non-binary.

But it’s not as easy as that. We know that in order to make more investments into diverse founders, we need to be doing more than supporting women and non-binary founders at the top of our pipeline. 

3. We need to reduce bias in every part of the process 

We have taken a look at every part of our process: from founder NPS to investment processes to hiring. We’ve challenged ourselves to reduce bias across each of these processes through:

Unbiased selection criteria before making an investment decision

Of course, internal biases affect all of us on some level, whether we’re conscious of them or not. Because we recognise this, we have developed a framework built around six critical pillars that we use for every investment decision. These pillars help us create an environment for decision-making that is as unbiased as possible. 

We mark every founder on the same criteria with questions like: Is the mission high definition and vivid colour? Are these founders building a generational culture? Is the product roadmap spellbinding? Are there wonderful revenue expansion opportunities? What do we need to believe about this company for it to return the fund?

Before we invest, we ask questions about how the company is seeking diversity in its workforce and management in all areas from gender, ethnicity to age as well as how the company measures and prioritises employee engagement and culture.

Blind decision-making practices

For years now, we’ve used a blind polling system to collect the investment team’s views individually in written form to encourage healthy debate and diversity of thought around decision-making as well as ensuring diversity in those attending pitches. 

Term sheet requirements

We include 2 key clauses in our term sheet with founders to ensure companies consciously create a diverse leadership team across gender, ethnicity, age, sexual orientation, disability and national origin. We ask each company to have an “inclusion rule” in its HR policy that requires at least one woman and/or member of a population currently underrepresented within the company to be formally interviewed for any open executive positions.

Monitoring individual pipeline data

We look at every member of the investment team to make sure that there aren’t diversity hotspots, where one member of the team is skewing too far in one direction. If we find any hotspots, we work with the team to actively adjust the diversity of their pipeline to make diversity everyone’s responsibility.

Hiring

We use Applied, an anonymised de-biased recruitment platform that improves quality of hire and increases diversity in our team. As a direct result of this, we now have >60% of our team identify as a woman. 

Events

We strive to have diversity at any event we host for both speakers and attendees from Sunrise to founder and ecosystem events (goal: 40% women or non-binary). In running these events, we are experimenting with support for diverse founders (e.g. nanny or childcare support options).

Monitoring our founder experience 

We are acutely aware of how challenging it can be for founders engaging with VCs and seeking funding and we know the experience of women and non-binary founders seeking funding has its own unique challenges. 

We monitor founder NPS surveys monthly to give us a read on individual founder experiences and whether a founder would recommend Blackbird as an investor. 

We know there is no silver bullet, but we believe with these types of processes, bias can be better controlled and challenged, helping move the dial on the number of women or non-binary founders who receive investment.

Broadening our definition of diversity

This blog has been focused on gender as an important starting point for us. However, we do acknowledge there is a need to also look at areas of diversity. To start our journey on this, we have engaged experts to run workshops with us on allyship skills to expand our understanding of all types of diversity - an area where we, and our industry, have a great deal of work to do.

Diversity takes a whole-of-ecosystem approach and we are committed to trialing ways of achieving this not just with our investments but through cultivating the ecosystem.

Where to from here? 

Today, again, we are affirming our commitment to: 

• Publishing our data and sharing our learnings annually; 
• Continuing to collaborate with other VCs, incubators, community leaders and government partners including through a group of VCs publishing investment pipeline diversity data, Beyond the Billion, Scale Investors’ EmpowerEd program, Women in VC Down Under and WinVC.

We know the flywheel of all of this activity - ecosystem cultivation linking to investment - will not spin overnight nor will it always be smooth or consistent at least in the short term. But for us, it won’t deter or dampen our commitment to the effort needed to move the needle longer term.

Feedback is always welcome.