Knowing how to affect positive social change is no easy feat. Intention is only half the battle. Plug-and-play solutions aren’t an option. And short-term feedback loops that signal you’re on the right path can be hard to come by.

One issue we’re actively addressing at AirTree is gender inequality in the ANZ VC ecosystem. To do this, we’ve recently refreshed our diversity, equity and inclusion (DEI) strategy, and now we're pulling out some of the key lessons from this work.

Our approach has been built on the foundations of AirTree’s existing DEI programs Pioneers, Explorers and the Diversity Pledge. These have emerged organically over the years as a result of an appetite for change by the AirTree team, and the goal in polishing up our DEI strategy was to build on this, threading these programs together into a bigger, coordinated view.

Whether you’re new to DEI programming or are well on your way, we’d love to hear from you. We’re always keen to learn and share more.

Why this matters

Currently, the industry-wide crop of Australian and New Zealand founders are still overwhelmingly homogenous, with issues of diversity in both the quantity of founders and deal size. This is despite research that shows if women and men participated equally as entrepreneurs, global GDP could rise by up to 6%, boosting the global economy by trillions of dollars. It’s also been shown that diverse businesses are more likely to outperform, with gender and ethnically diverse teams generating 30% higher multiples on invested capital than homogenous ones. In the current economic headwinds, this makes diversity a problem for all.

One of the main levers we can pull to affect change is the mix of identities in our investing teams. Gender-diverse investing teams are two times more likely to invest in gender-diverse founding teams and three times more likely to invest in women CEOs. But it’s not just diversity that matters, equity across roles is equally impactful. While 58% of people in the US VC industry are white men, this group controls 93% of venture capital dollars.

By being eyes wide open about the reality of these statistics and strategic about translating intent to action, we’ll move more quickly to greater, more widespread prosperity.

Now it’s time for action. 

Spend time off the dance floor and on the balcony

There is nothing revolutionary about this tip. As with any new direction or transitional moment, it’s helpful to take yourself away from the day-to-day grind and make space for bigger picture, reflective thinking. 

Take time to think through current state questions. Get a few people to join you in mapping out the answers. The more lateral (and diverse 😉) you're thinking as you brainstorm, the more valuable your insights will be.

‍Ask yourself: 

• What are you currently doing? 
• What does the research show? 
• What have others done? 

‍Helpful resources: DiversityVC, NVCA, SBE, Giant Leap, Tripple, Scale Investors, Cut Through Ventures x Folklore Ventures, Kleiner Perkins, Carta, McKinsey, BCG, Deloitte, TechCrunch, Crunchbase, Forbes and HBR are a good starting place for resources and data.

Define better, and then own your definition

It’s crucial to find your own view in this work. Be informed by what others are doing and saying. Educate yourself by listening to experts and talking to people with firsthand lived experience of inequality, then form your own perspective. 

Map out what you think better looks like and why. This will help you bring energy to the problem (especially when things get hard), engage more constructively as you analyse results and pivot as you learn what works.

‍Ask yourself: 

• What change do you want to see, and to what magnitude? 
• What change can you uniquely affect, given your position, resources and capacity? 
• What are the expectations of your key stakeholders? (For us, these are our LPs, team, community and portfolio.)

What this looks like at AirTree:

At AirTree, DEI means:

• Diversity: The mix of identities in our team and portfolio of founders.
  Primary focus on gender (cis and trans women, non-binary people) and ethnicity (people of colour). 
  Secondary focus on geography (under-represented and non-metro regions, e.g. Penrith, Perth, Newcastle, Wollongong)
• Equity: providing fair opportunities
• Inclusion: Hearing and incorporating diverse views in how we think and make decisions

Know your levers

Once you know the kind of change you want to affect, be explicit about how you think this change occurs. Think about what levers you can pull to affect change.

Look at your operations, investments, brand influence and networks, and understand what tools are at your disposal. Once you have these in mind, determine what needs to be part of your strategy to improve outcomes. Think about how each lever ladders up to your ultimate goal.

‍Ask yourself: 

• How do you think change occurs on this issue? 
• What is your best guess for how to catalyse this change? 
• What does that mean your next step should be?

‍What this looks like at AirTree: 

Build the system as well as the programs

While you don’t want to get weighed down by analysis or bureaucracy in affecting change, it is important to bring some consideration to the broader system in which your change programs sit. As you design and deliver these programs, think about what metrics you want to shift–and by what magnitude–and then put time in to review your progress with key decision-makers.

‍Ask yourself: 

• What frontline projects will you take on straight away?
• What are the metrics and targets for these projects? 
• What governance structures are needed to review progress and identify any pivots you need to make?

‍What this looks like at AirTree:
Our programs include Pioneers, Explorers and the Diversity Pledge, as well as internal practices around how we hire for our team, build an inclusive culture and develop talent during their AirTree journey. To underpin this, we also have a live dashboard of DEI data that anyone in the company can access (snapshot below) and make space for an intentional review of our progress.

The table above shows combined data for new and follow-on investments. While it's helpful to see the big picture, we think it's also important to look at new investments on their own to understand the impact of new processes for our IC, which is where we're focusing our energy in order to affect change.

Don’t be the only one answering these questions.

If you’ve made it this far, you’re clearly passionate about these issues. That’s fantastic. Use that to fuel your answers to these questions but don’t let it be your only input. 

While your perspective is valid (no matter who you are), you can only represent one perspective. You need more variety to make your ideas robust. The best thing you can do is invite others to answer these questions too, especially people in decision-making positions within your organisation and people with lived experience of the issue (in this case, women founders, founders of colour, older founders as well as younger founders, and founders with disability, to list a few).

‍Ask yourself: 

• Who is affected by the changes you want to make? 
• Who are the decision makers around you? 
• Who is going to be implementing your approach?

‍What this looks like at AirTree: 

AirTree Co-founder, Craig Blair, was our internal sponsor on this work. Here’s his perspective on it:

“Our goal from the beginning has been to build a generational business that has its eyes on the horizon. Making space for these kinds of questions is one way we do this, taking the time to listen and reflect as we continue to grow as a team.”