Diversity Beyond Gender: An interview with Patricia Hamzahee

Patricia Hamzahee is an investor and co-founder of UK-based Extend Ventures. Her team’s November 2020 research, Diversity Beyond Gender, into access to funding for diverse founders in the UK was the first of its kind, and they have recently been commissioned for similar research in the European context. Patricia speaks to us about the particular challenges facing UK investors when it comes to investing with an equity lens, and what they’re doing to build a better evidence base.

You use the framing diverse founders, could you talk a bit more about that language and why that was your choice?

While investing with a gender lens has been a priority in many circles for some time, there has been much less focus, attention, and impetus behind investing with a racial equity lens. So for us, diversity is across the spectrum. It includes gender, it includes race and ethnicity, we also really spend time looking at social economic class, as reflected in educational attainment, for example. We also try to look at geography. And in a UK context, that is what the landscape looks like around different parts of the country. We also look at access to funding, and who has had limited access. We haven't specifically looked at disability or LGBTQ yet, but we would. We're all about evidence and building that evidence base through research.

Tell us about the research you've done so far.

Findings from our first UK report were quite startling. We have a unique methodology and tools which allow us to apply AI to identifying the founders, and not just rely on people's names or self reported data (a lot of things around race and ethnicity are not reported for many reasons). We looked at ten years of VC funding for the startup community, and we found that in those ten years 11% of funding went to women, 0.24% went to Black founders, and 0.02% went to Black female founders. That is just 16 women. There was some news pickup last year for reasons I think we can all understand but not significant as it could be. That is just a startling figure, and it tracks with what was found in the US as well. 

So what do you think the particular barriers and challenges are in the UK? I appreciate there are some similarities with the US, but where do you see the distinctions?

“We looked at ten years of VC funding for the [UK] startup community, and we found that in those ten years 11% of funding went to women, 0.24% went to Black founders, and 0.02% went to Black female founders. That is just 16 women”

Since 2019, there's been an Invest in Women Code, a prioritisation of gender lens investing by a whole cadre of organisations. When more than 50% of the population are female, redressing that imbalance is really important. But there has been no similar impetus around looking at the disparities for race and ethnicity at all, until very recently, on the back of the murder of George Floyd and reinvigoration of the Black Lives Matter movement. There have been some declarations of allyship, and that's great and to be welcomed. But it's quite recent. I totally support the focus on increasing and improving investing in women. But I think it is telling that even something like the 30% Club only just recently started to think about race and ethnicity. If you are a champion of inclusion, and you're only looking at diversity through one lens, then the whole edifice of that is weakened. And the lack of inclusion is very visible.

Now that there's finally been a focus on more racial, ethnic equity in investing, do you think there's a risk that the gender lens will be lost from that and Black or Asian women might still miss out? 

It will only get lost if the women in the equation remain unaware of the intersectionalities. Too often I'm in meetings, and it's "women and people of colour", meaning the women are all White, and then there's people of colour. Just even that mindset, we must call ourselves out to say, what is that about? We're not just talking about the UK; I have a focus on investing in Africa and in other parts of the world. But wherever we are, in Africa, in Asia, in Latin America, in America, in the UK, in Europe, women, of all races and ethnicities are the engines of entrepreneurship.

Going back to the UK context, could you say a bit more about socio-economic class and geography as aspects of JEDI investing?

We hear the UK government talking a lot about "levelling up". The reality is that prosperity has been very focused on London and the Southeast. It's rational that a lot of investment flows are centred in London. But from an economic health perspective, I think it's incumbent upon those who can influence the flow of capital to be really mindful of what the rest of the country looks like, where good jobs could be built, where good infrastructure can be created. And it has to be seriously planned, it can't just be the government. So local authorities, pension funds, locally-based investment institutions, [all have a role to play]. I'm a great champion of CDFIs (community development finance institutions), which in America are almost transformative for disadvantaged, local communities. There are some CDFIs in this country but we need more, and we need better funded ones. 

What is a really good example of an intersectional investment in the UK?

There's a company called Afrocenchix, founded by two Black women. They have amazing Black hair care products and a really great business, but had challenges all along on funding even though they closed a million in their last round. One of the founders was telling me that when they started out, they got into a university accelerator, they were the only two women, not just two Black women, but two women in this accelerator cohort. And they found getting funding challenging through that process, while the white males had lots of interest and support. They are still standing while those white male founders are not. That should tell you something about the tenacity, resilience, courage, and the ability to make a pound out of a pence of women, and I will say specifically Black women, because they are usually at the lowest rung of any economic ladder. There should be an Academy Award for them.

Amazing, thank you. Where else does the UK need to catalyse more money towards diverse women?

A specific action is to evolve the Investing in Women's Code to an Investing in Diversity code. And then investment institutions need to be more intentional and specific in how they define and target investments. Everyone has been able to hide behind this really problematic nomenclature of BAME (Black and Minority Ethnic). If you look at the diversity of the Asian community, there is the difference between whether you're Bangladeshi, or you're from Vietnam, or you're from China, or from India or Pakistan. There's a huge divergence of circumstances in those communities. And then comparing again the diverse Black communities, whether it's Black African, Black Caribbean, but British born, there's another dimension of diversity. The BAME statistics just lump everyone together. 

“Everyone has been able to hide behind this really problematic nomenclature of BAME (Black and Minority Ethnic). If you look at the diversity of the Asian community, there is the difference between whether you’re Bangladeshi, or you’re from Vietnam, or you’re from China, or from India or Pakistan.”

I'm doing a project right now trying to hone in on Black-owned businesses, which we're defining as those owners with an Afro Caribbean and mixed heritage. Finding these statistics is virtually impossible. Someone might measure it one year as a one off, but there's no consistency over time. We're advocating for a consistent examination across race and ethnicities in terms of the business community that takes the temperature on a regular basis. Right now we always start from ground zero. As the oft quoted saying goes, what matters gets measured. 

Good data is a big challenge. What are you doing around that?

I don't think we need more data to outline the problem. What we do need is ways of measuring progress. Because again, after Black Lives Matter, everyone had little black squares and nice words of support and allyship, but where's the money moving to? The question is also, when there's money and it's not enough money, and when there is, how has that money been distributed? If you look across all the sectors, whether it's charitable finance, development capital, investment capital, funding is still channeled through gatekeepers, where the power structures, perspectives and experiences are limited and narrow. And until those power structures are reshaped, challenged, made much more inclusive, and apply an equity lens, things really aren't going to change.

In the world of development capital, for example, there's still a huge amount of White saviour complex. The funds are held in the hands of a small group of people, many of whom have great intentions. But I'm staggered by the lack of collaboration, the lack of co-creation with the people on the ground. Whether it's getting under the skin of businesses from diverse founders, or beneficiary organisations in the community and at grassroots level. 

Many of us out there feel like the window of opportunity is closing, that a lot of the anguish characterised with the Black Lives Matter movement last year is fading, and people will soon move on to new challenges. And we will have lost the historical opportunity to make the kind of systemic cultural changes that are necessary.

That is why many of us see that the time for change is now and are working hard to achieve it.