Black professionals remain significantly underrepresented in the UK venture capital industry. According to Diversity VC’s The Equity Record UK 2023, only 8.32% of respondents identified as Black, and fewer than 20 Black professionals hold investment decision-making roles across all UK VC funds.
Intersectional analysis reveals even starker disparities, with no Black women from lower socioeconomic backgrounds currently working in the sector. This lack of representation extends to founders, where Black entrepreneurs received just 0.24% of VC funding between 2009 and 2019 — a figure has risen only marginally to 0.95% as of 2023.
Tech Funding News spoke to Black people driving change in the industry — here’s what they told us.
Progress since 2020: Incremental gains and persistent challenges
Since 2020, the UK VC industry has made some progress in addressing ethnic diversity. Representation among Asian, Black, and Mixed-ethnicity VCs has doubled since 2019, and initiatives such as Google’s Black Founders Fund and Black Seed have emerged to provide targeted support for Black entrepreneurs.
Kenneth Kashif Thomas, a Principal at BackFuture, shared with us: “The current state is still low on the investor side of the table. While this makes the community small, it does mean the community tends to tie together well. With recent attrition in the industry, this might more affect those along intersectional lines.
On the founder side, things are improving marginally. From 2009 to 2019, only 38 Black founders received over £1m in funding, increasing to 80 from 2019 to 2023. This is more heavily skewed across gender lines, where the number doesn’t even reach ten.”
Despite heightened awareness, funding for Black founders has not kept pace with that of other groups, reflecting ongoing biases in capital distribution. Additionally, 71% of VC partners come from upper socioeconomic backgrounds, reinforcing exclusivity within the industry.
Anu Adebajo, LP at Atomico, expressed concern about regression: “It feels worse than it has been historically. Not only have we lost momentum in terms of D&I, but there is active pushback, and many of the gains made have been lost. Many firms were following trends or pursuing D&I as branding but have not followed through with long-term inclusion. Where only superficial changes were made rather than the deeper structural shifts needed, as soon as D&I fell out of fashion, many firms quietly dropped their Black investors, founders, or programs with little to no pushback.”
She added: “Unfortunately, I’ve seen several Black investors leave the industry with burnout as the desire to be a good overall investor has conflicted with being pigeonholed as the ‘diversity’ investor and the pressure from Black founders as the sole team member they have access to.”
Barriers to entry and advancement: the invisible glass ceiling
Black professionals face numerous challenges when entering and advancing within the VC industry. Over-reliance on referrals disadvantages those without access to elite networks; only 25% of state-educated individuals find roles through referrals compared to 35% of privately educated peers. Additionally, non-white VCs often require advanced degrees at higher rates than their white counterparts to attain senior positions.
Women of color are underrepresented in senior investment positions, limiting diversity in decision-making roles. Meghan Stevenson-Krausz, co-CEO of Diversity VC, highlighted this issue: “Signing the Invest in Women Code could be a starting point, but it shouldn’t stop there. The UK’s population is beautifully diverse, and if we want everyone to participate fully in the economy, startups and venture capital are key levers. But we need an intersectional lens that goes beyond gender to include class, ethnicity, disability, sexual orientation, and more.”
Intersectional barriers further compound these challenges. Black women experience discrimination based on both race and gender, limiting their opportunities for advancement. Adebajo highlighted another troubling trend: “Many Black founders (especially female) have effectively closed their companies… There is definitely a difference in who is given more runway to fail with continued bridge funding and who is left to collapse.”
Interestingly, pipeline data contradicts claims of a talent shortage. The Newton Venture Program reports that among its Foundations learners, 19.2% identify as being of African descent; among its Fellowship cohorts, this figure rises to 20%. These statistics suggest systemic barriers, not a lack of talent, prevent aspiring Black professionals from entering and succeeding in VC.
Strategies for aspiring Black founders
For aspiring Black founders looking to enter and succeed in venture capital, several strategies can help overcome systemic barriers. One approach is leveraging niche networks like Diversity VC or participating in programs like Barclays’ Accelerator to access mentorship and funding opportunities tailored to underrepresented entrepreneurs.
Speaking specifically, Barclays’ Black Founder Accelerator provides expert masterclasses on product development and leadership while connecting founders with investors during Demo Days — a vital opportunity for scaling businesses like ScribePay that benefited from this initiative.
Another option is targeting aligned investors who prioritise diversity-focused investments such as Google’s initiatives or Ada Ventures. Daisy Onubogu, founder of Chat with Daisy, emphasised: “Build your network! Use that charisma, grit, and hustle to take advantage of the fact that people do want to see change — they just don’t want to overhaul the whole system — and therefore are happy to champion any ‘exception to the rule’ they get to know.”
Building demonstrable traction is equally important for founders seeking funding opportunities. Non-dilutive financing options such as grants or crowdfunding platforms can showcase early success without sacrificing equity ownership or control over their businesses. Kenneth Kashif Thomas noted: “On the founder side… I think the lack of reliance on capital will be game-changing, allowing them to go farther with significantly less.”
Catherine Fadashe, Marketing and Communications Associate at Hayfin Capital Management, added another perspective: “You may not always be able to find a mentor… However, finding an advocate can be even more helpful — someone who champions you behind closed doors in rooms you might not be in.” She also emphasised perseverance: “You need something that drives you other than success or recognition — for me, I want to look back knowing I left the industry better than I found it.”
Emerging opportunities for Black founders across sectors
Certain sectors are beginning to offer more opportunities for Black founders due to targeted initiatives and growing market demand across healthtech, fintech, and social impact ventures. Thomas observed: “I’ve been seeing Black founders do quite well raising in spaces that are heavy in sciences and engineering… It’s definitely more binary to illustrate expertise, opportunity, and track record.”
Startups like Axela and Research Grid, which secured funding through Google’s Black Founders Fund, are examples of success stories. Programs like Barclays’ Black Founder Accelerator focus on businesses addressing inequality or sustainability challenges. Fintech innovations targeting remittances and cross-border transactions are also gaining traction in African markets like Nigeria and Kenya.
However, these opportunities remain limited compared to broader industry trends. Onubogu noted: “Besides areas like applied AI… there is still significant skepticism about whether diverse founders can scale globally.”
She also reflected on her own experience: “Feeling the weight of expectation from underrepresented founders that you will be able to significantly change things while in fact having your hands tied by all the systemic factors keeping the status quo going.”
Fadashe, added, “Venture capital is still an asset class that many people do not know of. Fortunately, several organisations have been doing excellent work on education and providing exposure through internship programs and masterclasses for young people.
To name a few: Diversity VC, 10,000 Interns Foundation, and Future VC. However, the industry still faces a significant challenge in terms of the invisible glass ceiling often encountered by Black VC professionals in the UK and Europe, especially those seeking to rise through the ranks and secure decision-making roles, such as check-writing positions.”
Toward structural change: policy solutions and industry accountability
Structural changes are needed across recruitment practices, funding decisions, and cultural norms within firms to address systemic inequities in venture capital. Stevenson-Krausz suggested adopting policies similar to California’s SB-54 legislation requiring VC firms to report on founder diversity: “We would like to see similar legislation in the UK… LPs should also be required to report on the diversity of their fund managers.” Mandatory reporting on ethnicity, gender, and socioeconomic data could create accountability within an industry resistant to change.
Retention strategies are equally critical. Firms must go beyond recruitment by fostering inclusive cultures that support underrepresented groups’ career progression. Adebajo concluded: “I think we are in a holding pattern right now given everything going on in the world. I do see that the lack of performance from the incumbent groups presents an opportunity for those from underrepresented groups who have been quietly working away, producing something tangible while being relatively under-resourced, to be attractive to investors who are feeling the pressure to stop following hype and find returns.”
Over the next five years, several trends are expected to reshape venture capital for underrepresented groups, including increasing LP demands for transparency on DEI metrics and broader adoption of mandatory reporting practices within firms like Ada Ventures or Cornerstone Ventures, leading efforts toward inclusive entrepreneurship ecosystems.
While junior roles show increasing diversity levels across firms nationwide, retention into senior decision-making positions remains a critical challenge requiring sustained focus.
The need for sustained action
While incremental progress has been made since 2020 in addressing diversity within UK venture capital, systemic barriers persist, particularly for Black professionals seeking decision-making roles or funding as entrepreneurs. Initiatives like Google’s Black Founders Fund or Barclays’ Accelerator provide hope but remain insufficient without broader structural reforms.
As The Equity Record UK 2023 emphasises, diversity is not just about representation but also ensuring equitable influence over decision-making processes that shape innovation’s future.
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