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Closing the Funding Gap: 3 Practical Ways Investors Can Drive Diversity
Not every founder has equal access to funding opportunities and while improvements have been made in recent years, there is still a long way to go. So how can investors close the funding gap and drive diversity? We hear from KPMG’s Head of Private Enterprise Access, Amy Burnett on practical steps investors can take to help create this step change.
Increase representation in funds
Only 13% of senior teams in UK Venture Capital firms are made up of women and 48% of investment teams have no women at all as highlighted in the UK VC and Female Founders report.
The above is a shocking statistic highlighting a significant gender disparity, but one that if addressed could have a huge impact on closing the funding gap for women and underrepresented founders.
To effectively close the funding gap, it is essential to ensure that women and underrepresented individuals sit on Investment Committees. An Investment Committee holds the final decision-making power regarding investments, therefore having a varied and diversified Investment Committee is critical for closing that funding gap.
Having more women and underrepresented individuals in senior positions within a fund can also help to achieve this. This can be achieved by promoting your internal team and by hiring in senior positions.
Recruiting more women and underrepresented individuals into the venture capital industry is also key. This can involve targeted outreach and support programmes aimed at encouraging diverse candidates to enter into venture capital roles, thereby enriching the industry with a broader range of experiences and insights.
Improve knowledge and access to finance
The Invest in Women Code report 2024 highlights need for access to tools, resources and finance (Investing in Women Code Annual Report 2023 to 2024).
Investors can provide insights, education and tools to support founders on their journey through fundraising. Running free workshops, drop-in sessions or programmes to educate and support founders can add real value and level the playing field.
KPMG is playing it’s part to support women founders, and delivers annually the #FoundedbyHer KPMG Private Enterprise programme. Focused on supporting women prepare to got to market for their Series A fundraise, this programme seek to equip founders with the knowledge and network to do this. Over a 4-month period, the cohort of up to 15 founders meet with advisors, peers, investors and experienced founders who all play their part to support the founders on their Series A journey.
Raj Maghani, Co-Founder, BlockAPT states:
“As a female Co-Founder in tech, this cohort gave me more than knowledge; it gave me a powerful network, unwavering confidence, and a refined vision for BlockAPT's future.”
Finally, Investors can volunteer to get involved in these types of programmes or can look to set up their own initiatives. By doing so, they not only contribute to the growth of diverse business but also foster a more inclusive investment ecosystem.
Mitigate unconscious bias
Unconscious bias is learned stereotypes that are automative, unintentional, deeply engrained, they have the ability to affect your behaviours in ways we may not recognise.
Being aware of unconscious bias as an investor is paramount to be able to prevent and reduce its impact on decision-making processes. Providing your team with training and education on unconscious bias can help. It’s also important to critically examine your investment process and identify ways your current system could be amplifying unconscious bias and what methods you could use to mitigate this.
One common source of unconscious bias in the investment funnel is the reliance on warm introductions. The practice can favour certain founders over others, limiting access for those without established networks who are often female founders. To create a fairer system, you can set up an application form on your website, provide your contact details on the website or on LinkedIn so that each founder has an equal opportunity of presenting their business to your fund.
The above highlights a few practical ways investors can close the funding gap for women and underrepresented founders. However, this is just the beginning and there is a lot more that needs to be done.
If you are thinking about fundraising, then do reach out to KPMG for support.
techUK’s TechTogether campaign, taking place throughout March, is a collection of activities highlighting the UK’s technology sector pursuit to shape a more equitable future. In 2025 we are exploring: Inclusive AI, investing in diverse founders and entrepreneurs, the power of allyship and mentorship, and empowering young people.
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Amy Burnett
Amy heads up the KPMG Private Enterprise Access programme in the UK, delivered via the Emerging Giants Centre of Excellence. Emerging Giants is a Global KPMG brand for our support of fast growth and innovative scaling businesses. The team identify and support high potential startups and scaleups across the UK and work alongside them to accelerate their success. We are here to work organically with businesses, delivering traditional and new KPMG services and support throughout their business lifecycle.