 to get some whoops. Thank you. Hello, Slush. Day two. Thrilled to be here. I hope you're having a wonderful time. So I'm sure many of you were here yesterday for the State of European Technology presentation from Atomico when Tom Wehmei told us the State of European Tech and there were lots of many great things that we discovered. Investment in European Tech reached a record 23 billion last year. European founders created 17 billion dollar companies. Europe produced three of the 10 biggest venture backed public listings. It's a major driver of economic growth in Europe. But, and it's a big but, there is a huge diversity and inclusion challenge in European Tech. One stat really stands out. Well, there's many that stand out, but 93% of funds raised by European venture backed firms in 2018 went to all male founding teams. There is one female CTO out of 175 CTO, sorry, CTOs that work at VC backed European Tech companies that raised Series A or Series B last year. And the uncomfortable truth is that the technology industry today is not a place where everyone, regardless of gender, race, disability, religion, sexuality or socioeconomic background, can thrive and succeed. So what are we going to do? Well, today we're going to have a conversation from two people who are really trying to address this issue and this very kind of urgent challenge that we all face. This year's State of European Tech report from Atomico partnered with Diversity VC to create a practical guide, a toolkit that's intended to help anyone leading, working or investing in technology companies to provide, to promote diversity and inclusion in their business. So to discuss the guide here today, we have Nicola Zenstrom from Atomico and Francesca Czech Warner from Diversity VC. So just to kick us off, check if you don't mind, tell us a little bit about Diversity VC. Yeah, so Diversity VC is a nonprofit. We're made up of a group of interested individuals. We all work in some capacity in the VC industry and our mission is to promote diversity in tech in all of its forms. We kind of do four things. We collect and publish original data. We help young people get into the industry from all kinds of backgrounds. We help VCs themselves to be more inclusive through a training program and a VC specific toolkit. And then we help entrepreneurs access capital. We started out last year by doing a study which was the first ever study on the number of women in VC in the UK, which revealed that two-thirds of funds had no senior women in their investment teams and only 13% of partners in UK funds were female. It's really important to say that we are looking at the diversity issue in its broadest sense, so we're not just looking at gender, but that study gave us a real kind of indication of how bad the problem was today. This report is actually the first thing we've done for entrepreneurs, and we're really, really excited to partner with Atomaco to do that. What it is, as you said, a really practical toolkit. It includes eight case studies from founders of companies from 10 people up to 500-plus people. So the idea is that it's people talking about where they're at on their journey, not saying that they're perfect, but it's a starting point for a great conversation. So Nicholas, the annual European sort of state of tech report that you guys produce every year, it's very much a benchmark. It really does indicate that the state of European tech. Why did you decide this year? What kind of provoked you to sort of really think, okay, we need to address this issue? Yeah, it is a huge issue, and you can look at this from a few different areas. One is like if you purely look at this from a performance point of view, which are the best company? How can a company perform better? How can investment perform better? It turns out that studies show us a diverse team performs much better than a non-diverse team. So there's a business case. It's a real business case. Yeah. So and of course, this is really the right thing. There's no reason why the tech world should be so small. Yeah. And one of the biggest challenge that all companies have is talent. How to access talents, how to find more talent. So if we broaden the talent pool, we will be more competitive. Yeah. So I think it's important maybe to sort of like now look at very specifically VC and the role of VCs in this issue. Jack, how do you see VCs being able to really have an impact into sort of like drive change? Yeah. I mean, the reason we started as an organization with VC was because we thought that VCs had a disproportionate impact on the companies they fund. Right. And the thing about tech companies is they often are growing very, very fast. And the problem compounds. If you don't get them the sort of solution right at the very beginning, then the problem, you know, when you're a company of tens of thousands of people, it's actually really, really difficult to then subsequently fix. Yeah. So we think that VCs have kind of two major roles to play. One is making it a priority and actually, you know, talking to the founders of the companies that they're backing in their meeting all the time and saying, you know, this is something that we really need to see from you in order to kind of work with us. And the second thing is using their resources and using their networks to actually source talent across the whole portfolio. Right. Because VCs can kind of leverage themselves and build those networks to make those key hires for those companies from day one. Sure. And Nicholas, from your experience, does this resonate for you in terms of just, you know, the cultural fit with the kind of, you know, startups that you maybe want to back? Yeah. So going back to this whole thing about hiring people because that's all what it's about. We have conversations today with founders before we make an investment. And we talk about how they think about diversity, how they think about values and culture. And that gives us a really good clue if this company is going to be successful or not because founders who are leaning forward and saying, yes, I understand that being inclusive, thinking about diversity and building a strong value set early on, those are the companies have a much better chance to build a sustainable long-term profitable company. If founders don't really care about this, this is going to be a really, really big red flag for us. So we use this now already in the screening process. And we're asking these questions about diversity, how do you think about it? And what are you going to do about it? So I think also when we as a VC community starting asking these questions before we make an investment, I think over time, this is something that maybe become a standard that companies they know that when they need to raise money from a VC firm, they need to think already about diversity. So I think we can really raise the bar. And, you know, when a VC firm comes in, what we do is also, of course, introduce governance that we're putting a board together. And the first time that the company started to think about how did you think about governance. So this is the time when we also need to include diversity and inclusion on the board level. So kind of raising these questions when we look at hiring plans. And so then that's I think that's one one of the things that we can really play a role. And would you consider such a As you say, to this point, I think it's interesting to kind of ask yourselves the question. If you do run a company, when was the last time you had diversity and inclusion policy as a standing agenda item or as any agenda item on your board pack? And kind of as a VC, you know, often you get appointed to a board at these early stages and sort of insisting that that's at least discussed can have a massive impact. So maybe Nicholas, would you consider ensuring that, you know, a potential portfolio company that this is this is kind of baked into the term sheets? So we actually introduced that in our term sheet this year, that companies that don't have a diversity and inclusion policy that we require them to put one in six months off their investment. And that's something that like that's, that's the easy way. And it's like, so far, everyone think that's great that you all got for me. No one is like, so far, no, no one of the companies we investing in have a problem with this. So it's just putting this on agenda, and also raising these at a board meeting. And what you said, check is very rare that I've seen board materials that talks about diverse and inclusion. So that's something I would say, like if we check in a year from now, success would be that most board materials have this in their in their in the board meetings and the material. And this is where this kind of came from. It was about making it as easy as possible for people to implement something. This is completely free. Please send it to all of your companies and use it and add to it. Because we want this to be a resource that people can really easily just slot in to their companies. Yeah, this is the part I think we should really get into because I think this is the key for everyone here to understand that this is a toolkit. This is something that can be used. It's practical. And maybe check, you can kind of just take us through what that roadmap in terms of the practical steps that startups, you know, Nicholas was saying, you know, maybe some startups, they don't have, they have the will, but they don't necessarily know how to do it. What does that roadmap look like? So the first thing is about understanding the topic and actually prioritizing it. So as a leadership team, you know, saying this is a year, you know, for 2019, we're actually going to look at this. We're going to make this priority. In terms of understanding it, you know, it's not like, you know, how do you scale to a new country? It's not, it's a much more complex and nuanced topic. So, you know, really recommend spending proper time understanding the deep nuances of diversity and inclusion, the reasons why our industry today is not as inclusive as it should be. The second thing is about planning and really making sure that you're talking to all the different communities in your workforce and also thinking about communities that are not currently represented in your workforce and thinking about how you can bring those people in in the future. Then it's about implementation and looking at how you hire, you know, it's a key part, how you kind of on board and how you actually create an inclusive culture because it's all very well hiring people in the future. So, you know, we're talking about people who are from diverse backgrounds, but unless they feel like they can thrive and succeed and do well in the company, then that's not going to end very well. And then thirdly, product design, you know, thinking about how people actually access your products and how they can kind of use them. And then finally, building in kind of feedback loops to allow everyone in the company to give their view on what they think, you know, has been achieved by the diversity and inclusion focus and how it could be changing, how it could be improved. Because the research and our understanding on this topic is just constantly changing and evolving. So, it's not like, you know, once you put this in place you can just kind of forget about it and move on. You need to constantly keep updating it. I was going to ask that question actually. So, once it's been put in place, that's not then an excuse for start-ups to say great, we've done that. Let's get on with growing and scaling. This is something that needs to be done as constantly being iterated, right? Yeah, and it's about a communication channel, and actually involving and including your employees in that conversation. Yeah. And I think that the case studies, if you look at the back here, you know, these eight case studies, a really strong theme that constantly came through was the companies that were engaging in their own, in the conversations with their own employees were the ones that seemed to be doing best on implementing the policies that people were happiest with. And does that change according to the stage that a company is at? Presumably it's far easier to think we're going to bake this into our business, but when organizations get larger, it's more of a challenge. Are there different, are there different kind of case studies here between those kind of different kinds of businesses? Yeah. So one of the case studies we have in here is Monzo, for example, which is one of them, you know, very exciting challenger banks in the UK, and they are actually the company that has the one CTO who's female in the Atomaco report. And, you know, that's a really interesting example of a company of over a year, you know, as it's scaling. And I think it's about sort of making sure that the priority is also through the whole line. So every single line manager has this as a reporting kind of line up to the leadership and then know that this is a serious priority. So Nicholas, from your perspective, when you're thinking about maybe adding, you know, making an investment to add a company to the portfolio, would you decide even if the business was extremely exciting and you thought it had real potential, would you decide maybe not to shift in terms of, you know, a founder's attitude towards diversity and inclusion? I think the key question here, keyword here is attitude to it, because there's a lot of teams that we see that are very, very early stage which are not diverse. And then we, like, we see that, you know, the presentation they come to us, or maybe here's our teams, like, okay, there's all white males. Okay, then we ask the questions, like how do you think about that? And if they don't think about it and when we kind of prompt them a little bit, if they think it's an issue, if they don't think it's an issue, think it's nothing to focus about, that's a red flag. But if they think about, yes, we're aware of this and we really, really, really want to build, we understand it's important to build a diverse team. It's really hard so far when we got started. If they lean in and understand the issue, then that's good. If they don't understand it and they don't want to understand it, that's a red flag, because it's about building a team that can be, not only big, but also a diverse and well-performing team. So I think that, I really doubt, seriously, that companies that are ignoring diversity can be a long-term, sustainable great business. And that's what we would kind of really step away from that kind of companies. The other thing I was going to say was that both companies, when we meet before investing, but also we went out to all our portfolio companies earlier this year and asked them, how do you think about diversity? Do you have a diversity policy in place? And pretty much everyone thought it was important, but not everyone, actually less than half, had a policy in place. And they said, that's great, yeah, we want to have one, but then they asked us, but how do we do it? It's like, we don't know. So that's why we kind of started this conversation with Czech. It's like, okay, we actually need to help out here. But it was really, really great here also, just connecting founders together and start talking to us. So then there's also a peer learning thing here. So what we hope that we will achieve with this is like, this is the launch of this report, or this toolkit or this guide what we really want this to be is a first iteration and then that this is something that can become, build on this. And then there's a lot of peer learning, hopefully, so it can be really, really fruitful. So 88% say that having a diverse team is a benefit to company performance. I mean, all the evidence that we have suggest that, actually, other than being the right thing to do, the ethical thing to do, the responsible thing to do, there's actually a really strong business case for this, right? And I think it is also a point we were talking about earlier is the idea of creating global companies, which Tom mentioned earlier, and one of the things we're really doing in Europe particularly is creating companies that can compete on a global scale. And having companies, the teams of companies actually represent the global society that we're in, rather than just a very small subset of it, is a really key part of understanding customers and hopefully getting to that successful global outcome. So Nicholas was just talking about the sort of startups that he's meeting, sort of at relatively early stage. There's obviously challenges when you're a larger company, there was a news story last week about a guy at Facebook who posted a story about there were disproportionately few African-Americans working for Facebook. Do you think this is for larger organisations, it's fundamentally a question of will, or do you think there are kind of big structural challenges for larger organisations? I think it's really the whole industry that has this problem across the board, and there are major problems we have in both the pipeline, but also in every single part of the funnel of getting people into and including people in tech companies. So I don't think it's necessarily a question of will, I think it's really about making sure that you get it right early. I think the slight challenge that those companies have is that they're so late on in their development that they haven't got that kind of culture that they needed from day one. You mentioned modern so, are there other examples that you can cite in terms of, I mean clearly this is a work in progress for most organisations, but are there other companies that you did some research on that you'd like to talk about maybe? Yeah, I mean there's a few companies that we've talked to who are specifically building for audiences that maybe are not represented in the tech industry today, so Beauty Stack is one of those companies which is an incredible company, but it is run by Sharma Dean Reid who's this amazing kind of inspirational role model and she's talked about how diversity is in their DNA and they got it right really from day one and they've really been conscientious about thinking about the composition of their team because the products that they are selling or their services that they're selling are targeting women particularly and it's sort of to do with beauty and nails and so they need to make sure that the people in their customer. Yeah, I guess also that's maybe you could take this Nicholas, that's also just about understanding, it's almost like a product decision as well, if you're building a product you need to make sure that it's got as wide of kind of marketplace as possible and so clearly that's something that just all people working in product need to be thinking about these issues right? Yeah, big time because representing the customer base and I think it's also both product design but also I think it's also understanding your customer base it's really hard for you know like beauty stack is like I would, I mean I have a background in product design, I don't think I would be really good in doing beauty stacks products because I don't I wouldn't resonate very well with the customers so I would probably be lousy in that probably be lousy anyway but so I think this is really really important but I also think about you know this product but also you think about the environment and it's also kind of coming back to these big companies versus startups and there is you know we talk about feedback loops and data and I think what's going on right now is that you talked about the Facebook issue and it's not only Facebook, there's a lot of companies you have you know Uber and a bunch of these companies which are very successful today that were started maybe you know 10 years ago when this was not discussed on stages on conferences you didn't have this so this was not like in when these companies were founded long time ago or some time ago this was like it was about move fast and break things and wear a hoodie and and then you build a culture and then you have a massive company it's really really hard to change that culture what I observe today is that there's a bunch of founders who are just getting started they see that and say like I don't want to build that I want to build something different that is sustainable for the future that has a have a value set that can be sustainable and diversity inclusion is critical to that so that's what I'm really really optimistic that the next generation of companies that being built here founders are here at Slush this is like on top of mind and presumably this also means that if the industry opens up to diversity and inclusion there's a massive talent pool out there that we're you know we're just simply not appealing to and it is excluded from the industry yeah and I think another great example I think is Glossier and we had a great quote from Henry Davis of Glossier in this report and that's a company which is just growing incredibly quickly and probably you know is targeting an area that hasn't really been touched by tech before so they created a new beauty brand a lot of their products actually come from comments from Instagram from their customers and initially they started out as a media brand so the fact that they were able to really have that empathy with customers from early on has created this amazing culture that's incredibly aspirational for people to go and work for so we talk a lot about you know gender and race I think the other area that maybe we need to think about is also sort of socio-economic sort of challenges that people who simply have the opportunity maybe to learn about tech but is there anything in the report that kind of touches on that and how that could be addressed? Yeah so one aspect of that question is how you look at evaluating your kind of sourcing of candidates and looking at you know if you just take MBA candidates or MBA students or people who went to certain kind of Ivy League universities then presumably and you're not necessarily going to get the broadest way of society we just talked about interns and diversity VC runs an internship program which is for young people from all kinds of backgrounds to get a foot in the door at some of these places which they otherwise probably wouldn't get the opportunity to work at and there are now two people working full time in the venture industry who've come through that internship program so we're quite excited about that for ourselves but we think that that's an area that companies should explore when thinking about talent and hiring for aptitude rather than hiring for a tick box Nicholas from your perspective do you think VC is still sort of dominated really by what Czech was describing Ivy League schools you know people who've been through MBA programs at prestigious universities? Yeah I think we need to be very introspective and realize that the VC industry itself has failed on this it's tradition has been very very skewed towards men coming from Ivy League universities and also a lot of these VCs you know we've had a stereotype what a great founder should look like and that's not a diverse kind of open minded outlook so we have a lot to do in our industry ourselves and what we have observed is that having members of the VC team who come from diverse background you know females but also from different cultural and ethical background finding companies and entrepreneurs of that diverse background so it's not kind of rocket science that a female investor probably will actually find easier to find female founders and I think one part of that is psychological safety that I would think that female founders find is more comfortable having conversation without their female partner at the VC firm so one thing that's important for us is to recruit more diverse set of members at Atomico because that's the way for us also to be more better at diversity in the ecosystem. So we're kind of running out of time few more minutes, just got a couple more questions that I think would be important to touch on but check obviously everyone can have this report available to them online but people going leaving here today what advice would you give them in terms of what's the first thing you can do other than reading your excellent report? Where do people start? Especially people founders you maybe don't you know they're working in relatively small teams. Yeah so I think getting together as a leadership team getting together as a founding team and messaging to your investors and to your boards and to other stakeholders around you and saying in 2019 we are making this a priority just you know putting that statement of intent out there is really important if you can publish it to the rest of employees even better and then opening up some sort of feedback channel or some sort of open channel of communication with your employees to help inform what that policy is going to look like and then I think hopefully you will read the report and then we can get to the next slide. I think we have a lot of things out there but there's also so many organizations working on this. I mean I'm just kind of one tiny bit and you know this has been created by a whole group of volunteers we've had 60 contributors to this and it's amazingly been this sort of huge team effort. There's 28 different organizations in the UK alone that we've just identified that are working on different aspects of this question but I think it's really important that you have the same kind of engagement with them. How can you give them a platform to come in and talk at your workplace or in your community? So one final question there's a lot of tech bashing going on at the moment out there but let's not forget the amazing progress and the amazing kind of changes that tech has driven over the last 20 years. Can tech play a role and start off? Yeah absolutely there are today there are several tools that can help you to for example to think through or not think through but also to help you just scan when you do job postings to take away words that are gender loaded but also when you get your applications to scan and anonymize them to take out any kind of diverse or gender background and it's already proven that if you take away initial screening of a CV if you take away anything that has to do with backgrounds of gender but also cultural background I think of background then you will screen you will get through much more diverse CVs it's really scary we as humans we have a lot of issues and so of course there is also I would start with let's just go and get some bias training to start with there are tech tools and there will be more tech tools for this but I think we need to start with our humans and our attitude towards this and understand that this is something we need to start with today and even for a small company you should not think that we need to focus we don't have time for this it's actually now when you are a small company that when you set this from the beginning and think about diversity and also the first few people that you recruit are from a diverse background then organically it will be diverse so I would say yes there is tech but start with yourself I think tech is such an amazing force for social change and for being able to do the most incredible things and this should be something that the tech community can also tackle it's not hopefully that hard so I'm really optimistic about how much we can actually work together collectively and start to solve some of these problems so if you have any companies you're working on anything that you think we should include in this guide please do you get in touch so guys it's a free resource it's a very powerful toolkit very practical guide for all the entrepreneurs out there all the investors out there to actually really try and make a difference thank you both for your work everyone there are copies of this around if you can't pick up a print copy please do go to inclusionintech.com and you'll find the whole report there thank you so much