Venture Capital/Opinion/ Time to stop using the term BAME Busting catch-all terms is an important step in ensuring that diversity isn't a tick box exercise. \Venture Capital Hoxton Ventures to add a new partner in April By Amy Lewin 17 February 2023 Venture Capital/Opinion/ Time to stop using the term BAME Busting catch-all terms is an important step in ensuring that diversity isn't a tick box exercise. By Erika Brodnock and Johannes Lenhard Monday 19 October 2020 By Erika Brodnock and Johannes Lenhard Monday 19 October 2020 Charmaine Hayden, who is currently raising money for her venture capital fund GOODsoil, does not have much love for the term BAME. The acronym has become widely used in the UK tech sector, from lists such as the FT’s ‘10 most influential BAME tech leaders in the UK’ and Nesta’s ‘BAME role models’ in tech to reports in Tech Nation on the percentage of BAME people in the industry. “It groups together a bunch of people and enables people to leave out, say, black people,” says Hayden. “Black people, specifically black women, end up coming last, and even more so black women from working class backgrounds.” “Asian founders, who are often perceived to align more closely with VC ideals are chosen, allowing investors to still make their quotas whilst leaving other groups out.” BAME does not equal black This is an issue which has gained even more prominence following the Black Lives Matter protests: across the different ecosystems, black entrepreneurs — and investors — have historically been overlooked and locked out of the wealth that venture capital can create. For context, roughly 3% of VCs in the UK are black, 5% are mixed race and very few of these are partners with decision making capability within their firms (in London, where most UK VC firms are based, about 18% of the population is black or mixed race). In 2018, 5.4% of UK SMEs were led by non-white founders; overall, just 1% of venture-backed founders were black. At least partly, these structural inequalities have been masked by language and categorisations such as BAME classing together Asians — from Japan and China to India and Pakistan — with black and mixed race people. Tom Adeyoola, one of the cofounders of Extend Ventures, a not-for-profit founded to diversify access to funding for innovation, says it doesn’t make sense to use the term in many contexts. “[BAME] is an identifying term, but it isn’t self-chosen. This terminology shouldn’t be used as a catch-all for statistical, social and political purposes — that is where we need to come up with something else.” More nuance is needed The effects of using terms such as BAME are widespread, often reproducing structural inequalities under a possible cover of ‘increasing diversity’. It is well accepted within the industry, for example, that well-educated South Asian men are more favoured than other ethnic groups, some of whom are overlooked on account of both ethnicity and gender. Suranga Chandratillake, partner at VC fund Balderton Capital, says: “To be blunt — in our industry — if you look like me, it is not a bad thing. It is totally different if you are black. People will see me and assume I am a computer guy. My existence props up the industry’s numbers on diversity, but I am really not sure it should.” In this way, diversity can easily become a checklist item and box-ticking exercise facilitated by the usage of terms such as BAME. Linguistic challenges Obviously, the acronym BAME is only the beginning of our struggle with language. ‘Ethnic minority’ and ‘sub-group’ are similarly problematic. Such terms indicate a lack, being less, being minor. Gary Stewart, founder of The Nest, an alternative education platform for aspiring entrepreneurs, says: “The term minority assumes some sort of deficiency — it always means somehow less than.” Beyond this psychological and symbolic issue with the terminology, the indication is also often misleading factually. Depending on the viewpoint and context, many ‘minorities’ are in fact not minorities at all. June Angelides, VC at Samos Investments, raised this issue with us: “I grew up in Nigeria and never felt like a minority obviously. I only became conscious of it when coming to the UK when I was 17 but I still don’t identify as a minority.” Much of the language used in describing ethnic diversity is derogatory. Terms such as BAME, ethnic minority, disadvantaged groups, or ethnic subgroups aren’t good; they are not self-chosen or enabling and hence lack any political power. So, what can we do about it? Identify yourselves Gary Stewart believes the first step is to form self-identified political communities. “The first thing that the black British community needs is to come together and become politically active.” The venture world in the UK took its first steps towards galvanising the black and mixed-race community last year with the launch of 10×10 VC. Ella Wales Bonner, an investor at JamJar Investments, is one of the organisers of the group. She believes in the power of such community organisations and is promoting a push for new, more direct language, too: “People are not nervous to use the term black anymore — it is okay to host events and office hours specifically for black people. Black people face distinct issues, and it is okay to call them out. In that sense BLM has helped to move the conversation on.” Yvonne Bajela, an investor at Impact X Capital, an all-black VC firm in London, is similarly encouraged by the momentum generated by the recent Black Lives Matter protests and how they have cast doubt on the term BAME. She believes the onus is on investors to be specific and to search for overlooked founders: “It should be part of an investor’s fiduciary duty to look at the entire market!” Overlooked founders are an area of focus for Check Warner, partner at Ada Ventures and founder of Diversity.VC. Internally at the fund level and also slowly with portfolio companies, Ada Ventures has started to collect data and to have conversations about diversity. Warner believes that we need to move towards more specific language — and that investors could be a major driving force in this direction. There is no single way of changing the terminology — from overlooked founders to multi-ethnic or simply using more specific terms such as black and Asian, better alternatives are out there. Busting catch-all terms such as BAME is an important first step in ensuring that diversity doesn’t become a tick box exercise. All players — from government bodies and investors to VCs and the tech companies themselves — need to work together to promote the use of language that really reflects reality. We believe that the language we use plays a pivotal role in helping or hindering progress. Erika Brodnock is a Research Fellow in the Inclusion Initiative at LSE and Head of Research Extend Ventures, where she is leading pioneering research into access to venture finance for ethnically diverse entrepreneurs; and Johannes Lenhard is the Centre Coordinator at the Max Planck Cambridge Centre for Ethics, Economy and Social Change. He is writing a book about the ethics of venture capital. Erika and Johannes are also currently putting together a volume called ‘Better Ventures: Diversity, higher returns and a new frontier for VC and tech’. Related Articles “There is one thing we need more of in corporate innovation: diversity” By Kimberly Eynon Click here to read more “Nepotism is rife, innovation is rare and diversity is a sham” By Secret VC Click here to read more “VCs are exploiting underrepresented people to solve their diversity problems” By Anisah Osman Britton Click here to read more Most Read 1 \Healthtech Is Daniel Ek’s new body scanner worth the hype? Sifted tried it out 2 \Venture Capital VC diversity needs to change — and white men need to take responsibility 3 \Venture Capital New €3.75bn European Investment Fund pot to back late-stage VCs 4 \Sustainability Counteract closes £15m fund for carbon removal solutions 5 \Mobility Was the $5bn that VCs plugged into escooters worth it?