"Entrepreneurs come from everywhere. Any background, geography, ethnicity, upbringing, or belief system. They are challenging the status quo to solve our world’s biggest problems.

Over the past few months, we have formalised a set of Diversity Commitments to hold us accountable to this view, building on the work we’ve been doing over the last few years.

The aim of sharing our journey publicly is to show how our efforts in London have positively impacted our team, and above all to share our process in the hope that those reading it find it helpful when looking to build their own commitments for different organisations.

We began to take affirmative action in 2019 by putting an increased focus on gender diversity, which we chose as our first pillar because it would affect the greatest number of people. After a successful year of action, including a 52.6% increase in female representation in the FF operations team, we collectively chose to focus on a commitment to ethnic diversity, with a particular focus on supporting the vastly underrepresented Black community.

These commitments impact how and who we hire, what investments we make, and how we strive to positively impact the technology and investment community at large. The whole operations team in London has been instrumental in helping to develop the following commitments. Importantly we have also recognised that we cannot act alone and have been fortunate to be able to partner with YSYS, Inclusive Boards for unconscious bias training, Tech Nation, and 10x10 for black founders office hours.

Below, we’re sharing with you where we’ve come from, where we hope to go and most importantly, the actions we’re taking to get us there."

- Henry Lane Fox, Co-Founder and CEO, Founders Factory

What actions have we taken?

We knew that the first step towards increasing the diversity of our teams was to elevate diversity to the same level as any other of our essential business KPIs. And that meant taking a far more strategic and data-driven approach.

We knew that we needed a formal group that would drive these commitments forward.

• We set up the Founders Factory diversity committee (DC) a five-strong group consisting of a selection of leadership team and a rotating member of the broader team - everyone has the opportunity to be a part of the DC which meets quarterly, with all sessions recorded, to hold ourselves to account on our commitments.

  • Crucially, it has the highest level of buy-in, chaired by FF CEO Henry Lane Fox, as well as budget behind it.

  • DC is the formal steering group, but the whole company is involved in the development and execution of the commitments.

• We have taken affirmative action towards our hiring. Our main aim is to take affirmative action to ensure equality of opportunity for all. By equality of opportunity, we mean that we will ensure there is full representation of diverse candidates, through the pipeline and at the final stage.

  • If there is not equality of opportunity, we will take active steps to make sure that there is. We created red flags which signal when there is not equality of opportunity (i.e. not enough diverse candidates in the pipeline) and a number of affirmative actions we can take to redress the balance (see more below on our gender, Black, and BAME diversity actions).

• We are recording our data and report on it quarterly. Whilst we are now officially tracking our team’s make up, we continue to expand on the data points we collect.

Each quarter, we report on our data: who we’ve invested in and who we’ve hired. This is reviewed and any issues identified are escalated for action among the wider team.

• We have allocated a budget to implementing our commitments so we put our money where our mouth is. This means the team has access to resources to execute our commitments such as investing in relevant diversity funds and initiatives, and hosting events.

In 2020, our agreed focus has been on supporting Black founders and prioritising fair representation from all minority ethnic backgrounds:

Supporting Black Founders

• We will offer black founder office hours which are designed to help level the playing field. Any entrepreneur outside of the Founders Factory portfolio can get dedicated time with the investment team, senior management, talent and others from Founders Factory for advice, feedback and one-to-one discussion

• As part of our black founder office hours, we have launched a content partnership with Black Ballad, the leading voice of UK Black British women, to provide business workshops for female entrepreneurs

• We have invested £10,000 in the Fanbytes Fund created by Tim Armoo, founder and CEO of Fanbytes, and will continue to encourage others to do so

• We commit a budget to help build an app for The Black Curriculum and help support the team as they scale.

Prioritising fair representation from all minority ethnic backgrounds

• We promise fair ethnic minority representation of 35%* at the final stage of hiring and will take affirmative action if there’s not - at least one final candidate will be from an ethnic minoirty

• We promise fair ethnic minority representation of 35%* at the final stage of meeting the investment committee and if there’s not we will take affirmative action - at least one final stage business will have a person of colour in the founding team

• We will always pick the candidate or founder from an underrepresented ethnic group if there are two equal businesses or candidates at these final stages

• We actively manage the language of our job descriptions and in the recruitment process to ensure neutrality and avoid bias when recruiting to attract a diverse pool of candidates (you won’t ever find us looking for “ninja” developers, for instance)

• We will always endeavor to have a minimum 35% BAME panelist representation at any event we host. And external events we attend must have this too

* According to Diversity VC, UK BAME representation is 14% (specifically 3% Black in UK population) but we don’t think it’s good enough to aim for 14%, that’s why 35% is our trigger point for taking affirmative action.

What results have we seen so far?

2020 Snapshot:

How does this compare? According to research from Diversity VC, women represent 27% of people working in venture capital in the UK, on average, and in senior leadership roles, it’s 13%.

We also want to share that, when it comes to our startups, in 2020, in total, one third of our studio businesses (the startups we build from scratch) have female CEOs.

As of end of Q3 2020 we can report the following progress:

• A 52.6% increase in female representation in the FF operations team since we started to track this data in 2018

• A 113% increase in female representation in FF leadership since we started to track this data in 2018

• So far this year, 55% of the CEOs we have hired for our studio startups, are women, up from 36% last year

• Now 15 people who self report as BAME in the operations team, representing 27% of the business

• An average of 29.4% of businesses that get to the investment committee have BAME representation

What next?

This is just the start of our commitment to creating a fairer, and more inclusive business and wider technology ecosystem. In spite of being ahead of the industry-wide norm, we don’t believe that’s good enough. We want to - and know we can - do better. And that goes for our Founders Factory team, our portfolio companies and beyond.

• We want to continue learning and improving and welcome suggestions and partnerships to help make that happen.

• With our new increased focus on supporting the Black community, we are hoping to increase the representation of Black people within our organisation and the businesses we invest in.

• We have launched a campaign in partnership with startup community YSYS called #KnowYourData, designed to help startups take their first steps in collecting and sharing data on diversity. We encourage everyone to join this movement.

• We will keep everyone updated on our progress, initiatives and more in our newsletter - sign up here.

• If you would like to know more and have suggestions to share with us, please email our Head of Talent, Selina Parmar on selina@foundersfactory.co.

* See box out below