Empowering Change: Shaping the Future of Venture Capital through Diversity, Equity, and Inclusion

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by Chhata Gupta

In the rapidly advancing tech economy, a critical challenge persists with the underrepresentation of diverse voices within the venture capital (VC) ecosystem. This gap not only curtails technological innovation but also overlooks a vast pool of innovation and diversity that is crucial for shaping an inclusive future. The evolution of Diversity, Equity, and Inclusion (DEI) in venture capital is marked by progress, setbacks, and unyielding optimism for much-needed change.

Women and People of Colour in Venture Capital

The venture capital industry has long been criticized for its lack of diversity. Recent statistics shed light on the slow yet encouraging progress towards gender parity within the sector. According to a VC Human Capital Survey by Deloitte, as of 2022, women constituted 26% of the VC workforce, marking a significant increase from 15% in 2016. This growth, while noteworthy, barely scratches the surface of the entrenched systemic barriers that continue to stifle female talent and ambition. The fact that female entrepreneurs receive a fraction of total venture capital funding is a glaring testament to the economic and societal oversight plaguing the industry.  

In recent years, the venture capital (VC) industry has begun acknowledging the critical importance of Diversity, Equity, and Inclusion (DEI) in driving innovation and economic growth. This acknowledgement has led to a modest increase in the presence of Black professionals in investment roles within the VC ecosystem. However, despite this progress, according to a report highlighted by Girlboss, the number of women of colour in the venture capital space is approximately 7%, while, Asian women make up 6%; and Black women, 1%, facing even more pronounced barriers to entry and success within the industry.

Silent Struggles and Systemic Barriers

Entrepreneurs like Stephanie Lipp — who is leading the charge at MycoFutures North Atlantic by creating sustainable mycelium (root system of fungi) leather—and Azar Azad epitomize the overlooked potential stifled by systemic barriers. Azad is the founder of AI VALI, a company that enhances diagnostic accuracy and efficiency through advanced AI technology for endoscopic and medical imaging. Their experiences not only exemplify the urgency for a paradigm shift in VC funding but also highlights the rich tapestry of innovation that is at risk of being marginalized.  

As per Lipp, “A lot of people just assume there’s equity, that there’s accessibility for all types of founders”, however, once she entered the startup world herself, she realized it was blatantly obvious the number of barriers that exist.   

Azad agreed and mentioned how “social groups that are supporting also get tricky when it comes to standing by a startup company”.     

Both realize the blurring lines in the funding decisions that affect startup founders like them. As per Lipp,  

“…it does make me nervous about how we’re going to move forward with a start-up that has a really long runway, a long time to revenue, even longer time to profitability. It’s really hard in the beginning to determine if our early stage is the reason for our struggles, or if an individual with a different background would have had the opportunity to secure funding at these initial, high-risk stages.”  


Bryan Duarte, founder of Black Tech Capital, and EIR at Altitude Accelerator is committed to diversity, continues to challenge the status quo, to ensure that Black and diverse tech entrepreneurs receive the recognition and funding they deserve. Emerging fund manager, Giselle Melo, also an EIR with Altitude Accelerator, and Managing Director of MATR Ventures is taking bold steps to champion underestimated founders. Melo brings her journey of overcoming adversity and her deep understanding of the systemic barriers facing underestimated founders to spearhead initiatives that level the playing field in venture capital. Her personal journey led her to found MATR Ventures: 


“… if anybody knows Kobe’s [Kobe Bryant] mindset around having a mamba mentality, these are founders that have likely spent their entire lives experiencing setbacks, but just ultimately decided that success is their only option. And so that’s the reason I started MATR Ventures. I was in their shoes, at one point, experiencing [these setbacks]. But you just decide that it is not the game that you’re here to play, you’re here to win. And I figured out a way, even though I didn’t get the capital and you have setbacks and people that will judge you before a word comes out of your mouth. And the numbers sometimes speak for themselves, but they don’t even get to that point. Because as you walk in the door, they’ve made their decision.” 


When discussing systemic obstacles, it’s worth noting the Kapor study highlighted a significant difference in how investors engage with founders based on their gender. The study found that male founders are often asked about growth and market opportunities, which are promotion-oriented questions. In contrast, female founders are more likely to be asked about potential risks, market fit, or loss prevention, which are prevention-oriented questions. Interestingly, those who are asked promotion-oriented questions, predominantly males, are six times more likely to secure funding than their female counterparts. How can we address and mitigate these inherent biases that currently favor males in an investment community that appears resistant to change? 


Duarte asserts that we need to be more deliberate. It starts with recognizing your own biases,  

“I recognize my own privilege. I recognize my privilege as a male. I recognize my privilege as growing up very much in white spaces. So, I’m going to use that privilege to try to break down those barriers and go in.” 

 He also points out that we need to scrutinize and challenge the numbers,  

 “In the Canada there are two key areas we need to focus on for change. The first is the Business Development Bank of Canada (BDC). They have recently released studies through Diversio that require anyone they invest in, or any funds they invest into, to disclose their diversity statistics. As a government organization, it’s crucial that we, the public, apply pressure to ensure these numbers are transparent and accessible. However, their recent reports are too generalized, particularly when it comes to minority groups. Instead of lumping all minority groups together, the data should be broken down to show specific numbers for Black, Indigenous, and Latino communities. This will give us a clearer picture of the actual representation. 


Duarte points we need to get down to the “nitty gritty numbers”.  Funds like Black Tech Capital, MATR Ventures are focused on overcoming these biases and will be the ones to challenge these numbers. He contends, “… it’s a process, it’s a long game, it’s not a short term. This is not going to change overnight.” 

Together, Duarte and Melo are not just fund managers, they are advocates for change, leveraging their personal experiences and leadership to dismantle longstanding barriers in venture capital funding towards a more equitable and innovative startup landscape.  

Challenging the "Pipeline Problem"

As both Melo and Duarte defy the “pipeline problem” narrative which assumes a scarcity of investable diverse founders, faces significant scrutiny and challenge. Both Melo and Duarte highlight that the actual impediment is not a lack of talented diverse founders but rather the restricted networks and systemic biases pervasive among those who control venture capital funds. These entrenched barriers often prevent a fair evaluation and recognition of diverse-led ventures, perpetuating a cycle of underrepresentation.   

As per Melo, “if people have decided there’s a pipeline problem it’s because they don’t have an interest or an intention at all to make that investment in women and underestimated founders”.  

Duarte agrees and adds, “there’s no lack of pipeline problem for me. My problem is that I have too many, right? I see a lot of overlooked, under-invested, underestimated founders that to me, are further along, and have more resilience, and more grit. So, instead, it’s a great investment opportunity”.   

Fund managers are now taking active steps to dismantle these barriers by broadening their investment scope and actively seeking out untapped potential within underrepresented communities. Through their efforts, both Mello and Duarte are not only revealing the fallacy of the “pipeline problem”, they are also demonstrating the immense innovation and opportunity that diverse founders bring to the table. This shift in approach is gradually changing the investment landscape, challenging the status quo, and promoting a more inclusive and equitable venture capital ecosystem.

The World Economic Forum highlights that addressing the VC gender gap transcends moral obligations, serving as a critical economic necessity. Venture Capital can tap into previously unexplored territories of innovation and growth. The systematic underinvestment in women and minority-owned businesses represents a significant economic shortfall and highlights a missed opportunity for economic and societal advancement.  

Gayatri Sarkar, of Advaita Capital Challenges Industry Norms

Gayatri Sarkar, the visionary behind Advaita Capital, stands as a pivotal figure challenging the norms of the traditionally white, male-dominated venture capital industry. With a background as a physicist, Sarkar’s transition to a leading figure in venture capital underscores the importance of diverse perspectives in driving technological advancement. At Advaita Capital, a woman-led, POC-led firm, the focus is on investing in transformative technologies such as generative AI and decarbonization solutions, highlighting the firm’s commitment to financial returns and societal impact. Advaita Capital invests in Series B or C companies, and is the only female-led, POC led growth stage venture capital company in the US. 

Sarkar’s philosophy extends beyond tokenism in diversity; it’s about redefining the criteria for excellence and inclusion in the VC world. She states, “It’s acceptable to acknowledge that their talent search fell short, particularly in identifying exceptional women. In contrast, my approach involves running a diverse firm where the entire team hails from prestigious educational backgrounds and possesses valuable experiences. I don’t need to explicitly target women or individuals of colour. Instead, I prioritize assembling a team of talented individuals, and it naturally includes women. Ideally, their response should have been more along the lines of admitting their shortcomings and expressing a commitment to finding additional exceptional talent. Claiming a lack of talent in their location isn’t the right answer”.   

Gayatri Sarkar’s journey and methodology in venture capital reflect a broader call for accountability and intentional action within the DEI space. By emphasizing talent and diversity as inherently linked, Sarkar’s leadership at Advaita Capital not only challenges but also inspires a new generation of venture capitalists to think beyond traditional paradigms and to recognize the value and necessity of diverse perspectives in shaping the future of technology and society.

Envisioning an Inclusive Future

Addressing the venture capital industry’s trillion-dollar blind spot is crucial for leveraging the untapped potential within diverse and underrepresented entrepreneurial sectors. This oversight represents not just a significant loss in economic value but also a missed opportunity for fostering innovation and inclusivity. The journey towards incorporating Diversity, Equity, and Inclusion (DEI) within venture capital, as per Sarker, emphasizes the importance of rethinking investment paradigms.   

In navigating this path, the venture capital community must confront and dismantle systemic barriers. By advocating for DEI, the industry can unlock a wealth of creativity and innovation, driving forward not just ethical progress but substantial economic gains. The gains are slow but these are noticeable changes. The collective push towards a more inclusive venture capital industry is about harnessing the full spectrum of human potential and creativity, essential for a stronger and more equitable future.   

Rectifying this blind spot within venture capital is not merely a journey of challenges but a path that is brimming with opportunities. Visionaries like Gayatri Sarkar, Bryan Duarte, Giselle Melo, alongside pioneers, Stephanie Lipp, Azar Azad, are leading the way towards a future where the venture capital industry is as diverse and vibrant as the world it seeks to innovate. As the sector evolves, the commitment to DEI will be pivotal in unlocking the full potential of diversity to drive sustainable growth and groundbreaking innovation, ensuring a more prosperous and equitable tomorrow.

Seeking to elevate your startup and carve out a strong personal brand? Altitude Accelerator is here to guide tech founders through its vast network of seasoned mentors and investors, pushing your venture to the forefront of innovation. Interested? We are now accepting applications for our Market Readiness and Investor Readiness Programs.