Tech and entrepreneurship is still a painfully unequal world, rife with discrimination. 

But solving the problem is difficult given the various forms of discrimination faced by women — especially those of colour. A new report from Berlin-based non-profit Founderland tries to chart all the insidious ways that talent gets excluded. 

It makes for grim reading, but here are Sifted’s key takeaways.

1. Even simple things like names can be used to discriminate

In Germany, migration background, religion and even the sound of a person’s name can affect their ability to find a job. Ironically, this can actually be an incentive for people of colour to found their own businesses, according to the Founderland report. 

According to a 2018 report by Germany’s Federal Anti-Discrimination Agency, people with non-German-sounding names were 24% less likely than those with German names to be called for an interview.

18% of respondents surveyed for the same report said they were asked if German was their native language, and 15% said they were asked what their religious affiliation was.

“Many individuals in positions of power in Germany, predominantly white men, seem to have a lack of understanding and awareness of the issue of discrimination,” says Stephanie von Behr, Founderland’s cofounder and managing director.

“They often adopt a ‘colourblind’ approach, failing to recognise the multiple ways in which racism continues to permeate society.”

“They often adopt a ‘colourblind’ approach, failing to recognise the multiple ways in which racism continues to permeate society. This lack of acknowledgement and engagement with the topic makes it a difficult and uncomfortable conversation to have, so they push it away,” she adds. 

Avoiding these conversations is going to be a problem further down the line, von Behr reckons. Germany needs 400k migrant workers per year to make up for labour shortages.

“And if we don’t have the vocabulary or the language or the skills to communicate with people who don’t look exactly like us and have exactly the same background, we’re going to have a bigger problem than we think,” she says. 

2. Exclusive networks remain a significant obstacle for founders

The German startup scene is undeniably homogenous, with many of the top unicorn founders coming from the same, traditionally elite backgrounds — they attended a top-tier university and/or worked at a large, successful company in consulting or investment banking prior to founding. 

According to a 2021 study by the Deutscher Startup Monitor, 36.4% of startup cofounders met each other in university, 34.5% were friends already, 28.2% knew each other from a common previous employer and 23% met through a mutual connection. 

These networks give founders a leg up which female entrepreneurs of colour, especially those from migrant backgrounds, are typically unable to access. One participant quoted in the Founderland’s study said that a VC told her that getting funded was all about getting warm intros.

“I was like, ‘to get a warm intro, you need to be a part of those circles, and being honest, most circles are still white German men,” she said. “I’m a Black queer working-class woman. I don’t understand how I’m going to get into those circles and get warm introductions.”

3. Hiring more diverse VCs needs to be part of the answer 

Less than 0.5% of venture capital goes to women of colour globally — a figure that’s likely not much better in Europe. 

More diversity needs to be brought in at VC level, especially among partners, says von Behr. 

“Research shows that VCs invest in founders who have a similar socio-economic, educational, class, race, gender, sexuality profile and about 80% of VCs are white men,” she says.

Building a more equitable ecosystem would also involve VCs investing outside of “benchmark profiles”, which typically include things like a founder’s educational background, professional experience and personal networks, as well as the industry or market in which the startup operates. 

Using these profiles helps investors make decisions about who to invest in and how much, but they can result in a lack of diversity in the startups selected for funding. 

Miriam Partington is Sifted’s DACH correspondent. She also covers future of work, coauthors Sifted’s Startup Life newsletter and tweets from @mparts_