Jos White talks about the Diversity VC Standard for diversity and inclusion.
At Notion we invest in fast-growing start-ups in the Cloud-based software industry. But we see ourselves as doing so much more than that. We want to create the conditions for extraordinary success that goes well beyond our financial investment and helps our companies to fulfil their full potential.
At the centre of this mission is people; within Notion, within our portfolio of companies and within the wider ecosystem that we operate. It takes a complete ecosystem to support a company along the road to global success.
Over Notion’s 10 year history we have always tried to treat everyone we employ, invest in and work with fairly and ethically, regardless of age, gender, ability, ethnicity, religion, culture or sexual orientation. We believe that we have established a working environment and investment process that meets these standards.
However, by nature of the way we were formed, we recognised that our company was ‘pale, male and stale’ and there was much more to be done. The lack of diversity within the VC industry remains shocking and is dominated by white men:
- According to The Information just 1% of decision makers at VC firms are black and 1.5% Latino.
- According to a study by Diversity VC just 1% of the founders VCs invest in are black, 1.9% Latino and 2.4% Middle Eastern
- In the same study only 9% of the founders were female and in 2018 female founders received just 2.2% of the total US venture capital investment
Yet, according to McKinsey’s 2018 ‘Delivering through Diversity’ report, companies in the top quartile for ethnic diversity are 33% more likely to have above average profitability than companies in the bottom quartile. It’s a similar picture for gender diversity, with companies in the top quartile for gender diversity being 21% more likely to have above average profitability than companies in the bottom quartile.
There is a complete disconnect between the venture capital industry, in terms of its teams and the founders it invests in, and the rich diversity of the society we live in. We are committed to closing this gap at Notion. It starts with our own team and we will continue to push for greater diversity and inclusion within our team until we are satisfied that this gap has been closed.
Not only is diversity simply the right and fair thing to do, it also leads to materially better business success. Diversity means, amongst many other things, that the markets you’re serving are better represented and also that you will have a wider range of knowledge and perspectives to draw from, leading to richer debates and, ultimately, better decision making.
There is clearly much more work to be done. And we in the VC industry have an outsize role to play. Not only do we build our own teams, we also decide the teams we want to invest in, we help our companies to expand and grow their own teams and have a responsibility to the wider ecosystem within which we operate.
That’s why we made the commitment to be one of the pioneering VC’s taking part in the new Diversity VC Standard for Diversity and Inclusion and are proud to have attained the ‘Level One’ standard.
Here are some of the measures or initiatives than we were either already running or have initiated in order to meet this standard:
- Continue to invest our time and energy into Included.vc, a platform to bring more people from excluded backgrounds into venture capital; Notion founded the program and it is now on its second cohort and has the backing of more than ten leading VC’s
- Introduce a transparent, anonymized and open hiring process
- Measure the levels of diversity and inclusion within Notion and our portfolio of companies
- Develop and document diversity and inclusion best practice including research into the D&I strategies of the best performing tech companies
- Introduce clauses in the standard Notion Term Sheet on D&I policy and hiring practices
- Appoint a Chief Diversity Officer and draft a new Diversity and Inclusion statement
- Appoint an outside consulting group to work with us to further remove bias in our deal origination and decision making processes
- Reach out and build relationships with local education institutions to deliver in person sessions and related content that inspires and educates people from a wide variety of backgrounds and demographics on Venture Capital and the wider technology industry
While we are happy to have reached the Level One standard, we recognise that this is only the beginning and that there is much more work to do before we, as an industry, start to materially change the numbers. Our strong belief is that the VC industry should reflect the society it represents. This will be a collective effort and we are determined to continue to play our part and be one of the drivers of change across the venture capital industry.