Diversity VC says certified firms boost team diversity

Diversity VC has published a report marking its tenth year in venture capital, saying firms that use its certification standard have made stronger gains in team diversity than the wider market.

Titled The Infrastructure of Change: What 10 Years Taught Us About Driving Impact in Venture Capital, the report reviews the non-profit’s work over the past decade and sets out recommendations for the sector. More than 100 venture capital firms representing USD $44 billion in assets under management are now certified through the Diversity VC Standard, it says.

According to the report, certified firms increased gender representation across teams by more than 10 percentage points after certification. It also found higher ethnic representation across teams, including a doubling of Black representation at senior levels.

These findings come alongside broader shifts in the UK venture market. Women on UK venture capital investment teams rose from 18% in 2017 to 31% in 2025, while the share of UK firms with no women on investment teams fell from 48% to 21%.

Structured processes

Diversity VC said the strongest evidence of change came from firms that adopted structured processes rather than relying on informal commitments. It argues that diversity work in venture capital has moved from the margins towards the mainstream of how some funds are organised and assessed.

The review also points to the role of investors and public bodies in driving those changes. It cites activity by institutional backers, including the British Business Bank and UK Private Capital, as evidence that inclusion is becoming part of fund selection, research and market practice.

Programme impact

One section focuses on Future VC, a programme designed to widen routes into the sector. According to Diversity VC, 97% of Future VC alumni are now in full-time venture capital or wider investment ecosystem roles.

The organisation has also expanded its own output during the period covered by the report. Since launch, it has run 447 workshops and published 19 reports and six toolkits, alongside programmes including Future VC, the Career Development Program, the Diversity VC Standard and the Diversity Data Alliance.

Long cycle

Meghan Stevenson Krausz, Chief Executive Officer, Diversity VC, said, “Over the past decade, there has been measurable progress in how venture capital understands and approaches diversity. Representation has improved, awareness has grown, and expectations have shifted. And yet, when viewed through the most visible metrics, progress can still appear slow and uneven. It would be easy to read this as a lack of change. But that interpretation misses what is actually happening beneath the surface.

Part of this disconnect comes from the nature of venture capital itself as a long-cycle asset class. The outcomes we most often measure – who gets funded, who holds power – are, by definition, lagging indicators that reflect decisions made years earlier. They tell us where the system has been, not where it is going.

Over the past decade, Diversity VC and Extend Ventures focused on something different: not just measuring outcomes, but changing the conditions that produce them. Many diversity efforts begin with culture, with a shared belief that things should be fairer, more inclusive and more representative. But without structure, culture remains fragile.

Funds that adopt structured frameworks like The Standard are moving faster than their peers. Limited partners and development finance institutions are beginning to embed diversity into capital allocation decisions. Policymakers are shifting from aspiration to transparency. And for the first time, there are credible pathways into venture capital for people who would previously never have seen the industry as accessible. These are signals that the system is beginning to shift. If the first decade of this work was about making the invisible visible, the next will be about making change unavoidable.”

Next steps

The report argues that venture capital should apply diversification principles to the people making investment decisions, not just to sectors, stages and geographies in portfolios. It says narrow networks and shared backgrounds can shape pattern recognition in early-stage investing and cause firms to miss investment opportunities.

The same argument extends to limited partners, which decide which funds to back and which managers build track records. Progress will remain uneven unless diversity and inclusion are treated as a core part of how those investors assess funds, the report argues.

Diversity VC also calls for more formal policies within firms. It says diversity should be built into hiring, investment decision-making, portfolio support and performance tracking, rather than treated as a separate initiative.

The report sets out a series of measures it says are already established elsewhere in financial services. These include equalised parental leave, continued pension contributions and carried interest vesting during leave, flexible working arrangements, broader hiring pipelines beyond investment banking, and development programmes for mid-level talent from underrepresented backgrounds.

Its central argument is that venture capital has become better at gathering diversity data, but weaker at acting on it. The next phase, it says, should focus on using those figures to shape how firms are built and how careers progress within them.

More than three-quarters of respondents in a recent survey said Diversity VC had contributed significantly or moderately to making the venture ecosystem more inclusive, according to the report.