Overcoming Biases and Unlocking Capital in Private Equity & Venture Capital

Written by Founder and CEO of Yareta, Manish Karani.

I recently had the honor of presenting ‘Fundraising Strategies’ to the Diverse Founders Network (DFN) at University College London (UCL). DFN is a vibrant community comprising LGBTQ+ individuals, women, non-binary and marginalized genders, ethnic minorities, neurodivergent and differently-abled talents, those who have experienced significant hardships, primary caregivers, and people from low socioeconomic backgrounds. These individuals, brimming with energy and ambition, are either embarking on or navigating their entrepreneurial journeys.

The Question of Access

During the session, a pivotal question arose: “In 2020, Black and Latina women founders received only 0.43% of the $166 billion in VC funding. How do we gain access to these investors if we are not part of that world?” This question captures the essence of the systemic barriers that underrepresented entrepreneurs face in securing capital.

Understanding the Biases

Key insights from our research on biases within the VC and PE industries include:

Gender Biases

Women-founded startups receive a disproportionately small share of VC funding. In 2023, startups founded exclusively by women garnered only about 2% of VC capital in the U.S. and 1.8% in Europe. Women of color face even greater challenges, receiving even less funding despite starting businesses at a higher rate than their white counterparts.