Founder journeys and the barriers to inclusive investment

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What is the Cornerstone Report?

This research was commissioned in May 2020 by Cornerstone Partners, an angel investment network focused on investing in businesses run by black and diverse founder-led teams. A syndicate of individuals of African and Caribbean heritages, Cornerstone came to this work with first-hand experience of businesses that showed great potential for success, but struggled to secure venture capital.

Access to Venture Capital was delivered and supported by inclusion and research specialist consultancy Engage Inclusivity, with support from UK venture industry nonprofit Diversity VC and data sponsorship from company intelligence provider Beauhurst. Looking at the UK environment in particular, it presents findings from an investigation of how founder experiences in seeking and raising equity investment vary in relation to founder backgrounds and founding team composition.

Key findings

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Underrepresented founders are being excluded from the opportunities of equity investment at a very early stage of business development

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Black founders are particularly underrepresented in pre-VC and VC funded cohorts

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Black and racially minoritised women and nonbinary founders are the worst represented

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Three-quarters of founders come from advantaged socioeconomic backgrounds and hardly any founders come from families living on welfare entitlements

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The majority of all founders are graduates from prestigious universities and VC funding is more likely to go to founders who have been to the most exclusive universities

This research contributes to efforts to indicate that whilst the VC industry has in some cases suggested a ‘pipeline problem’ citing a lack of suitable businesses run by women, Black and racially minoritised founders – the problem lies with VC’s limited perspective (Forbes, 2018).

Key Recommendations

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Equity investment professionals must recognise the tacit use of networks for risk mitigation, and develop new processes to replace these exclusionary practices

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Create funding schemes that support and amplify the work of angel groups, accelerators, and diverse managers that invest in businesses led by minoritised founders

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Encourage an “Open VC” model which sees equity providers work with the BVCA, UKBAA and other relevant trade bodies to create guides that abolish exclusionary practices and enable businesses with less social capital to gain access to investment networks

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Introduce and support early career development programmes that increase the exposure of venture capital to diverse audiences

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Further research is needed at the beginning of the funding journey (i.e. prior to pre-VC stage) to understand where founders from
underrepresented groups face challenges in raising initial investment

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Further research is needed into the disparities within broad ethnic groups

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Further research is needed on the experiences of non-binary and gender-nonconforming founders

Our approach

Engage Inclusivity’s approach is characterised by a commitment to social justice praxis. Our work aims to support progressive thought and action, whilst using tools and methods of research which themselves further this mission.

Key questions

What are the backgrounds of founders in ‘VC-ready’ and VC-funded businesses in the UK? Is there a significant difference?

What are the investment experiences of founders from groups that are less well represented in both groups?


Surveys with the Pre-VC and VC-funded groups ran from September until December 2020. Sampled companies were approached via email and LinkedIn over the course of the campaign to encourage participation.


1186 businesses that, in 2019, had the characteristics of being VC-eligible according to criteria developed by the research team in consultation with investment professionals (see Methodology for our criteria).


A group of 696 companies which announced VC investment in 2019. This excludes any companies which raised VC money privately and chose not to announce the round in industry press.

The findings below bring together analysis of publicly available data and self-reported data gathered through our survey.

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