With our #ESGinVC initiative, we want to foster a discussion around ESG and help each other develop and improve our frameworks. As part of this initiative, we spoke to leading managers and LPs about their ESG frameworks. The long-form interviews will be published in a reader on our website, while we will regularly post interview extracts on our social media channels (Linkedin — Twitter — Medium).
The extract below is from the interview with Check Warner, Partner at Ada Ventures.
Previous interviews include: Kinga Stanislawska (Experior VC, European Women in VC), Miki Yokoyama (Tech Founders), Fabian Heilemann (Earlybird, Leaders For Climate Action), Kanyi Maqubela (Kindred Ventures), David Teten (Versatile VC)
Your fund’s mission is to invest in overlooked founders and markets. Can you tell us more about your motivation to create the fund and your investment thesis?
At Ada, we believe that talent is evenly distributed but, at present, opportunity is not. We also believe that the VC industry is missing a huge opportunity, because it isn’t investing in so many groups of talented people.
My business partner Matt and I worked at a UK seed fund together and whilst there, I co-founded the non-profit Diversity VC. Whilst at that seed fund, we saw first-hand the number of great founders who faced barriers to accessing capital. We set out to design a fund with inclusion at its core, which is what became Ada Ventures.
“…the VC industry is missing a huge opportunity, because it isn’t investing in so many groups of talented people.”
What needs to change for the VC industry to become more diverse and how can VCs address their biases in the investment process?
Many aspects of VC need to change! Firstly, leaders at funds need to deeply understand the complex and nuanced nature of inclusion and systemic inequity. I recommend Fearless Futures and Hustle Crew who both run excellent training courses. Funds then need to review and audit every aspect of their operations, from their deal sourcing, to assessment and decision-making, to their recruitment policies, to internal policy and culture and portfolio support.
Once funds have understood the drivers of exclusion and bias across these areas, funds need to implement steps to address them. This may mean team change, spending money on new systems and processes and it is likely to take some time to start to see results. However, it’s never too early to start the process.
“…leaders at funds need to deeply understand the complex and nuanced nature of inclusion and systemic inequity.”
At Diversity VC, you have a certification called “The Diversity VC Standard”. Could you tell us how it works and how it is bringing accountability and transparency to VCs?
The Diversity VC Standard is an assessment and certification process which covers many of the steps I described. We launched it in September 2020 in response to a number of funds reaching out to us to ask for advice on where to start on Diversity and Inclusion. We realized that there was a need for a universal standard for what ‘good’ was in 2020 for Diversity and Inclusion. This also served as a way for funds to learn best practices from one another. We’ve since had 20 funds in the UK and Europe and a further 10 funds in the US become certified, including Bessemer and 500 Start-ups.
How do you assess startups when it comes to diversity and how do you monitor your portfolio’s ESG track record?
We work closely with the companies after we invest to define their theory of change if they are a business which is focused on driving impact. We ensure that every company has a D&I and ESG policy in place within six months of our investment.
Was it difficult for you to approach LPs with your investment strategy?
Yes, it was a slow and challenging process to raise funds for Ada Ventures. As well as being a new fund, several aspects of what we’re doing are new and innovative. However, when we found the LPs who were actively seeking a strategy like ours, we clicked immediately and have ended up with a strong and mission aligned group of LPs who we are really proud to partner with.
How do you address environmental responsibility as a fund and what can the VC community do to have a better impact on climate?
We’re actively exploring this issue at the moment. We’re taking a similar ‘root and branch’ approach to the one we took with The Diversity VC Standard. We’re examining each aspect of the fund’s operations, portfolio, communication, commitments, actions. Venture Capitalists have an outsized impact on the economy because of the funding decisions we make so it is even more critical that we get this right.
About Check Warner
Check is one of the founding partners of Ada Ventures and the co-founder and CEO of Diversity VC, a non-profit that works to promote diversity in the venture and tech industry. Prior, Check held positions at Seraphim Capital, Downing Ventures and Techstars. She has a degree from Cambridge and was named 35 Under 35 in Management Today 2018 and Forbes 30 Under 30 Europe in 2019.
About Ada Ventures
Ada Ventures is a venture capital fund, backed by entrepreneurs and a group of global, mission-aligned investors. The fund invests in overlooked founders and overlooked markets.
Ada Ventures is named after Ada Lovelace, the pioneering computer programmer, and mathematician, who was never recognized during the time she lived for what she contributed to the advancement of technology and science.
About Munashe Demawatema
Munashe joined Blue Future Partners in 2020. As an Investor in Residence, he is part of the investment team, focusing on investment opportunities in Emerging Markets. He has a strong passion for innovation, technology, and venture capital. Munashe began his career as Co-Founder of on-demand delivery start-up Amigo Fetch, before gaining experience in consulting, investment management, the startup ecosystem, and venture capital across the UK.
Munashe holds a Bachelor of Science (Hons) in Finance, Accounting, and Management from The University of Nottingham. In 2020, Munashe was selected to be one of the 48 fellows of the diversity in venture capital fellowship Included VC.
About Blue Future Partners
Blue Future Partners is a Fund of Funds with decades worth of experience in investing in Venture Capital. We specialize in backing Emerging Managers focused on early-stage technology investments. We are people-centric and relationship-driven. We have a global mandate and existing relationships with Emerging Managers in the US, Europe, Israel, China and South East Asia.
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