Rosie Wood is a (fictional) associate at the VC firm Mild Conviction. It’s a generalist, multistage fund with offices in London, Paris and Verbier. They’re not like normal VCs — they don’t need to do a tonne of due diligence to decide on an investment. Instead, they’re simply looking for companies and founders that are pretty good. Because pretty good is usually good enough. Catch up on her other dispatches here.
What’s the way to an LP’s heart? Outsized returns, of course, but also very detailed data on VC portfolio diversity, it turns out.
Which means a mad scramble to make their wishes come true whenever they’re seized by a whim to know just how not-diverse our portfolio is.
Since we started tracking portfolio diversity, we’ve learnt that it’s no small task. A lot of our portfolio teams are tiny, so they don’t have much data — and founders have gotten more and more frustrated with our requests. Why do you need to know what percentage of our team feels like the office is a pet-inclusive environment or support Man City versus Man Utd, they ask.
One early-stage founder told me that they felt uncomfortable reporting on ethnic diversity for their eight-person team and that they were only measuring diversity by Hogwarts house. By their measure, they're evenly split between Hufflepuff, Gryffindor, Slytherin and Ravenclaw. Another classified the team in terms of coffee tasting and aroma notes — they were overindexed on stone fruit. I’m trying to get more information from my woke friends in America about what this means.
After a particularly disastrous few reporting periods, we had no idea what to do. And to avoid a repeat of the Q4 fiasco, our managing partner Rupert Nickerson called an emergency meeting in the boardroom the first week back after the holiday season.
What do you mean you can’t get the diversity data? Can’t you just go on LinkedIn and find all these people and put them in the right boxes?
He was still working from South Africa, where he goes every New Year’s, so he boomed at us from the large screen in the room.
“What do you mean you can’t get the diversity data? Can’t you just go on LinkedIn and find all these people and put them in the right boxes?”
“We just don’t have the time or enough interns to do this — we’ve still got to do our day jobs winning deals!” our VP James said, joking. No one laughed.
There were a few more weak protests from the team until Rupert shut us all down.
“All of our portfolio companies do all-hands, correct? I want you to go to those meetings and find out how diverse those teams are. Rosie, why don’t you do it?”
I gulped. I was already working on some climate software and generative AI deals — there went the tiny shred of free time I had to enjoy my new Soho House membership. Gender is easy enough to discern, I was assured. But ethnic diversity — a little bit harder. Was I just supposed to ambush employees in the office and ask them outright? Or DM them on Zoom to ask where their parents had been born?
This is where James had a brilliant idea: the beige scale. A little like one of those paint sample sticks, he created a piece of paper with several different shades of brown on it. All I’d have to do was hold it up to people and I’d be easily able to categorise them.
Obviously, things could have been a bit skewed, given colour doesn’t come up too well on Zoom sometimes
I wanted to die of embarrassment. But off I went — clipboard and beige scale in hand. I was forced to attend all the UK all-hands in person and stood by the bathrooms after the meetings so I could complete the gender part of the exercise.
25 more virtual all-hands from Belgrade to Berlin later — and a bit of my dignity lost — I was on the other side. The findings were pretty dismal. 20% women employees and 11% “brown” and 9% “darker beige” across our portfolio. Obviously, things could have been a bit skewed, given colour doesn’t come up too well on Zoom sometimes.
My only wish for 2023 is that we can do better. And find a way to get rid of the beige scale.
Until next time, let me know how I can be helpful,