In September, we wrote about the fact that the world of venture capital tends to have a diversity problem. The entrepreneurs most likely to receive funding are both white and male. The bias against women and minorities might not be intentional, but it is nonetheless a serious problem.
Moreover, venture capitalists and other investors are missing real opportunities by not investing in ideas from diverse sources. There are some business ideas born of personal experience and perspective. A good example is a new dating website with some significant twists on the tradition model.
According to a recent news article, tech entrepreneur Whitney Wolfe recently founded a new app-based dating startup called “Bumble.” The site focuses on putting women in control of making the first move, which largely defies convention both online and offline. Wolfe believes that this will lead to a more comfortable experience for women, less harassment and more polite behavior from male users.
Ms. Wolfe brings a lot of hard-earned experience to this new project – both positive and negative. She was a co-founder of the dating app Tinder, but left the company after being sexually harassed by one of her colleagues.
It seems unlikely that a male entrepreneur would have come up with the Bumble dating model on his own. It is a uniquely female perspective, and that’s one of the many reasons why diversity in venture capitalism is so important.
A 2014 study from Babson College found that among companies backed by venture capital, just 3 percent are run by women. According to one of the report’s authors: “Only a small portion of early-stage investment is going to women entrepreneurs, yet our data suggest that venture capital-funded businesses with women on the executive team perform better on multiple dimensions. The venture capital community, therefore, may be missing good investment opportunities by not investing in women entrepreneurs.”
Hopefully, examples like this one will prompt venture capitalists to look at investment through a wider lens. If and when that happens, there will be plenty of diverse entrepreneurs ready and willing to bring their best ideas to market.