The UK’s history of immigration means that the country is home to a diverse and multicultural population. In 2018 about 13.8% of the UK population was from a minority ethnic background with London having 40% of its population from the Black, Asian & Minority Ethnic (BAME) background.

Despite improvements in recent years, the UK’s BAME individuals are still underrepresented in business – a primarily white sector. Currently more than a third of the UK’s biggest firms have no ethnic minority representation at board level. Just six ethnic minority directors hold the position of Chair or CEO in the FTSE 100 and nine in the FTSE 250.

Venture capital is also primarily white. Diversty VC’s ethnicity survey of 223 UK venture capitalists suggests that 24% of the venture workforce is non-white – however the sample was not adjusted for selection bias. Many of the firms surveyed were located in London, one of the most ethnically diverse regions in England and Wales where over 40% of residents identify as Asian, Black, Mixed race or Other ethnic group. This shows that compared with the London average, ethnic minorities are underrepresented in venture capital.

With venture capital having such a large influence on the economy and society – a small venture investment early in a company’s life can help to create an influential, global company – it is crucial that VCs represent the diversity of the UK population. Data from the government’s Future Fund revealed that just 12 BAME (Black, Asian and minority ethnic) startups gained financial support, further proving the need for BAME investment.

Nayan Gala, Founding Partner at venture capitalist firm JPIN VCATS, comments on the importance of diversity in venture capital and business:

“The UK should be proud of its diverse and multicultural heritage, but it’s clear to see that BAME individuals are highly underrepresented in private sector leadership roles and venture capital funding. With venture capital funding the future of businesses and startups, it’s crucial that investment is distributed fairly and diversely. Increasing representation of ethnic minorities in venture capital is an important step to increasing funding – and success – of BAME owned startups and businesses.”