Diversity in Venture Capital 2023

In 2023, the venture capital space is still severely lacking in diversity, and as a result, the companies chosen for funding have remained equally homogeneous. To explore the current state of diversity, equity, and inclusion (DEI) in the venture space, HubSpot for Startups commissioned a survey report of 200 professionals in venture capital firms across the US and Canada. We learned that though many firms have started working towards improving the status quo, there’s still so much more progress to be made. It’s time for VCs to take action and provide opportunities for all — not just the people already in their network or “traditional” founders. 

The Current State of Diversity at VC firms

• 74% of VC firms in the US and Canada have documented DEI targets in place for their internal organization. 68% have documented DEI targets for their investment portfolio.

• Newer, smaller firms are more diverse. Firms founded in the last 10 years have significantly better representation of Black and Hispanic investment partners, and of women.

• 65% of respondents indicated that their firm allocates <25% of assets under management (AUM) to DEI-focused investments.

• A McKinsey report states that only 1% of VC funding is given to Black founders. 1.5% is given to Latino founders. 1.9% is given to women-founded teams, and 0.1% is given to Black or Latina women-founded teams.

• Flexible work policies, family leave, and mental health and wellness stipends are the top three employee benefits that foster DEI.

“As long as firms remain over-reliant on recommendations from their personal networks and other investors, they have the potential to build inequitable organizations that don’t embrace diverse perspectives — from prospective employees or prospective founders.”
Kelsey Aina, Principal Head of Startup Partnerships, HubSpot