A recent Sifted piece on job adverts for roles at VC companies highlighted the common things venture firms are looking for. It made my heart sink.
There's no shortage of aspiring and advancing talent keen to secure roles in the industry, which means VCs can afford to be selective when it comes to hiring. But as well as being selective, the data in the article also shows they’re being prescriptive. And with that comes a huge blow to diversity.
The degree preference stacking the odds against women by default
It’s no secret that VC has a long way to go in terms of representation. Though firms like Dawn Capital, LocalGlobe and Bethnal Green Ventures show diversity can be improved, the demographics of venture can’t fully evolve if hiring frameworks remain rigid.
The data in the article shows that engineering and computer science degrees are highly prized by VCs. A whopping 42% of job adverts for VC internships specifically mentioned engineering degrees and 20% expressed a preference for computer science. However, a recent report from EngineeringUK showed that only 18% of those studying undergraduate engineering degrees in the UK are women. And although more women are studying computer science than ever before, they are still outnumbered by male students at a rate of 4.3 to 1, according to 2022 data from the UK.
Pretty much all the degrees VC seem to favour, according to those listed in the article, have more men among their cohorts at both A-level and degree level
Across Europe as a whole, only 19% of IT specialists and a third of Stem graduates are female, according to European Commission data. That's despite women representing 59% of graduates in Europe overall.
The preference for VCs to hire engineers and computer scientists means, by default, the scales are stacked against female candidates.
In fact, pretty much every degree that VCs are listed as favouring have more men in their cohorts at both A-level and degree level. For an industry where women only represent 15% of GPs, a preference for male-dominated degrees does not bode well for a gender-equal talent pipeline. It’s baking today’s biases into tomorrow’s leadership.
This isn’t to say we don’t want people from Stem backgrounds moving into VC. Because we absolutely should encourage that. Traditionally, lots of VCs have entered the industry following business or management-focused graduate training schemes. Getting more scientists, pharmacists and programmers into the VC ranks is a good thing.
But we can’t embrace that while ignoring the gender issues that pervade those spaces. We must figure out a way of championing both Stem candidates and those from diverse educational backgrounds, including the arts and humanities. That means building relationships with the right institutions, ensuring we’re promoting roles within a diverse set of communities and focusing recruitment on the skills gained through education rather than specific experience.
We need to wave goodbye to the warm introduction
It was also hugely disheartening to see that VC firms expect interns to have between 0.5 and 1.11 years of experience on average. In general, internships are already plagued by issues around bias, particularly if they're unpaid.
Work experience and internships are often heavily linked to personal introductions. These connections are all too often leveraged by people from more advantaged socioeconomic backgrounds. Expecting entry-level hires to come armed with reams of experience is a sure-fire way to narrow your talent pool.
If VCs set themselves parameters like this, the homogeneity of the industry won’t change. We'll continue to see people from overlooked and underestimated backgrounds struggling to break in. And this isn’t just bad news for aspiring VCs who don’t come armed with an engineering degree and a CV peppered with relevant experience. It’s also bad news for founders.
The non-representative money wheel backing non-representative founders
According to Atomico’s latest State of European Tech report, 87% of VC funding in Europe is raised by men-only founding teams. Funding raised by women-only teams has dropped from 3% to 1% over the last four years. And 84% of VC capital was raised by funds with all-male GP teams. These stats are correlated — whether the bias is conscious or unconscious, non-representative VC teams are overwhelmingly backing non-representative founders.
Some VCs are doing the right thing and making meaningful progress towards building a more representative, inclusive industry. And initiatives like Diversity VC and Included VC are helping drive this forward, by working with VCs to build DEI strategies and offer access to diverse talent through fellowship programmes and internships. But other VC firms are saying all the right things, and not translating that sentiment into action.
Narrowly focused hiring contingencies will restrict progress
This means VCs will continue to miss out on brilliant talent and overlook investment opportunities. At Newton Venture Program — which provides training programmes to help people unlock or accelerate a career in venture, no matter their background — we’ve seen poets, architects, teachers, civil servants and doctors come through our doors, all offering a unique set of skills and life experiences. This diversity of thought and experience is what will make them excellent VCs, able to spot opportunities and ideas that might go overlooked by a team with a groupthink world view.
We cannot hope to move the dial on founder diversity if VCs don’t address their own internal issues. Narrowly focused hiring contingencies will restrict progress. Now is the time to review your job descriptions and the channels you use to advertise roles. Then explore how you can make your application and interview processes fairer and remove opportunities for bias to creep in.
The time for vague promises and empty gestures is over. Now is the moment to make a change and prove your firm is a true champion of a better, more diverse future.
👉 Read: Who does what at a VC firm?