When The Diversity Commitment was established, 95% of venture capital went to male-only founding teams. That wasn’t just a sign of lack of diversity – it was also a clear indicator that we didn’t harness the full potential of talents, innovations, and ideas. Based on these numbers the goals of The Diversity Com¬mitment was set in collaboration between Innovation Fund Denmark, DanBAN, Danske Bank Growth, Vaekstfonden, byFounders, Dreamcraft Ventures, PreSeed Ventures and Seed Capital. Goals that among other things included to invest max. 80% of money into startups with male-only founding teams. Goals that seemed ambitious in relation to the starting point, yet realistic to reach in the framework of the three years set for The Diversity Commitment.

Summary

In 2021, 89% of VC funding was invested in male-only founding teams in Europe. 9.3% was invested in mixed founding teams and 1.8% in female-only founding teams.

At the same time, the gender distribution for General Partners in VCs in Europe showed a gender split of 85% male and 15% female partners.

The numbers from The Diversity Commitment Partners overall show that 79.6% of new investments are made in male-only founding teams and 80.3% of the money.For General Partners, the number is 75% male partners and 25% female partners across organizations with partners. This means that the Diversity Commitment Partners overall has met the goals of the Diversity Commitment of max. 80% of new investments and almost met the goal on the money invested in male-only founding teams and max. 75% gender homogeneity in the partner group.

This is an indication that it is possible to create a change by collectively committing to more diversity and sharing insights and learnings.

Still, there is a need for improvement. Not all The Commit­ting Partners met the goals in Year One.

• Female-only founding teams still account for a very small percentage of the new investments compared to the deal flow.
• Female-only founding teams account for 12% of the deal flow, yet only 8% percent of the new investments and 5.9% of the money invested.
• Mixed founding teams account for 16.6% of the deal flow, but only 12.2% of the new investments and 13.9% of the money invested.

Also, a max. of 80% gender homogeneity should just be a stepping stone towards a more ambitious goal reflecting society and the deal flow available to a much larger extent.

There is a potential and a will to create change.

 

Key Findings

• Based on this year’s data on the deal flow across all Committing Partners, 28.6% either have a mixed or a female-only founding team. This is a startling figure as it indicates the potential for less homogeneous investing.
• Looking at the data across all organizations for Year One, 79.6% of new investments are invested in male-only founding teams. Thus, The Committing Partners meet the goal of max. 80% in startups added to the investment portfolio with a male-only founding team.
• The data from The Committing Partners shows that 80.3% of the money is invested in male-only founding teams, nearly reaching the goal of max. 80% of the money for new portfolio startups to be invested in male-only founding teams.
• With female-only and mixed founding teams accounting for 28.6% of the deal flow but only 20.2% of new investments and 19.8% of the money, there is a gap between the deal flow and the investments.
• Throughout the investment journey, a higher percentage of money is invested into male-only founding teams compared to the available deal flow.
• The representation of mixed founding teams in the deal flow is more than 50% lower, from 34% at the BA stage to 15.9% at the government VC and 14.8% in the private VC funds.
• The Diversity Commitment Partners have a gender split of 45.7% female and 54.3% male employees meeting the goal of a maximum of 66.6% gender homogeneity in the entire organization.
• The Diversity Commitment Partners have 66.9% men in their investment teams and collectively almost meet the goal of max. 66% gender homogeneity.
• Looking at the data across all organizations with partners in their organization, the gender homogeneity is 75%, with an overrepresenta­tion of male partners. Overall, the organizations meet the goal of max. 75% gender homogeneity and show numbers above the industry average in the Nordics of 85% of male General Partners.
• Gender homogeneity of men across business angels in the relevant organizations is 84.8% and 82.1% for Collective members which means that the goal of max. 70% gender homogeneity is not met.
• With 52% gender homogeneity for job applicants using TheHub, the applications more or less reflect society’s gender balance. This underlines that men and women are equally interested in applying for a job in a startup or scaleup.

 

Moving Forward

There is an untapped potential for investing beyond the homogeneity we have seen in the past and in getting access to a large pool of talent, innovation, jobs, and growth.

The results of Year One of The Diversity Commitment indicate that the goals are reachable within the framework of the three years.

The fact that The Diversity Commitment Partners have met the goals as a group in relation to the investments and almost met the goals on invested money show that there is a potential to raise the bar as a community.

No organization has met the goals on all parameters but everyone has reached some of the goals. That calls for further knowledge sharing among the existing The Commit­ment Partners but hopefully also for new organizations to join The Diversity Commitment.

The existing goals of max. gender homogeneity in invest­ment processes and internal operations are from our side also just a starting point. We see potential to add other diversity parameters beyond gender and to nuance the data to a larger extent to get even more insight.

As more investors join The Diversity Commitment the investment process will become even more transparent and also contribute to a further acceleration of the process toward a startup ecosystem built on diversity instead of homogeneity which will benefit us all.

We invite the broader financial ecosystem to join The Diversity Commitment to increase the impact together, ensure diversity throughout the codepending deal flows and hold each other accountable for reaching the goals.

By joining as a Commiting Partner, participants will have influence on the development of the common goals andset the standard for the industry. All while getting insights from the others, ideas for actions and the opportunity to create change together.

While writing this report the European Parliament and the EU Council reached an agreement on a “Women on Boards” proposal. From 2026, women must make up at least 40% of non-executive boards or 33% of all directors of listed companies.

This indicates that the target is moving and ambitions for diversity goals should reflect this. While change may hap­pen at different speeds, no change seems non sustainable as an option. Leaders will have an opportunity to lead the way with more ambitious targets.