LIOF is a regional development company focusing on the province of Limburg. Their main goal is to ensure that the economic strategies of the country and the regions are translated into investments into local economies. This includes investing in SMEs and helping them with innovative ideas, develop their business plans, build their network, and facilitate a soft landing in the Netherlands (if they’re coming from abroad).
Why did LIOF decide to join #Fundright?
We were invited to join the diversity pledge as were all other regional development companies, (and 30 odd other VCs of course) and we immediately saw the added value.
We believe that investors can be at the forefront of change because ‘Money Talks’, so where the money goes, development goes. That’s why we thought #Fundright sounded like a really strong initiative. So our directors decided to embrace it and sign the diversity pledge. As a result, we're now part of the #Fundright community and still trying to work out how to include that in our daily business.
When we did an analysis of our portfolio companies, we saw that less than 10% are led by female entrepreneurs or even female co-founders. So it's definitely not as diverse as we want it to be or what you should be aiming for as a society.
There are two critical questions we’ve been facing: Are there simply not enough diverse startups out there? Or do we not appeal to minority groups because we’re not diverse enough in their eyes?
It's really difficult to investigate. You can’t send out questionnaires for this kind of dilemma. But we believe that finding out starts by getting it on the agenda within our own company first.
So, as a result of our relationship with #Fundright, we decided to start with unconscious bias training.
It all starts with awareness
If we look around, we're mostly white, privileged, 35 plus, highly educated people. And most of us have a background in banking. We actually have a good male to female ratio within the LIOF team, but there is room for improvement regarding other forms of diversity.
People don't see their own bias and that's really the hardest thing to address. And it’s not just men. Women also have the same biases. It’s important to make this clear so it doesn’t become an us versus them situation. Instead, we all need to address our unconscious bias. That's the first step.
Once we've done that and embraced it internally, we believe we’ll have a better basis to figure out how we’re going to make change happen. The next step will be finding the right words and messages to show who we are and hopefully attract different groups of people that may not be reaching out to us at the moment.
It’s not enough to have a Diversity Team, everyone should be concerned about improving diversity
Generally speaking, bias, that ‘gut feeling’ as we often call it, drives a lot of decisions in the investment world. Of course, all the technical details need to be in order to get to the stage when you’re actually using your gut feeling to make the final call. But, at the same time, it also has an impact on whether you decide to move forward with a company from the start.
And we, as investors, need to address this issue. The way we’re doing this now is by keeping ourselves sharp. Every investment needs to be carried by a team, so it's not just one investment manager making the call on their own.
But, if only one person on a team addresses the diversity issue, the discussion can often be cut short by the common argument: “We need the best person for the job.” And that's where bias versus objectivity comes in.
The ‘best person for the job’ depends on who the decision-maker is. And it's probably going to be a different person if it's you or me or a 70 year old white male who decides. It's really in the eye of the beholder and that's so difficult to address.
You need someone who will see things from a different perspective and challenge your beliefs and assumptions, whether because they come from a different cultural background or because they have different skills, etc. Society is not homogeneous. So why would you want to have companies that are?
Diversity is a very difficult thing to grow organically.
If you’re a believer in the benefits of diversity and you start a company today, you’re more likely to build a diverse team. But if you're not in a diversity minded company (as is usually the case), then it's not going to grow organically.
An important thing to remember is that simply having a Diversity Team doesn’t cut it. If management isn’t concerned about improving diversity, then it’s not going to happen.
What’s the best way to address unconscious bias internally?
That's of course the big question. But I think the approach we've chosen will be a good one. We’ve identified professional speakers who are going to address this issue by framing it with a lot of examples. I saw some excerpts from the speaker we found and she presents a lot of eye openers during her discussion.
For example, have you noticed that your female coworkers are always cold in the office? It turns out that heating in buildings is generally controlled by a technical department that's often run and operated by men. For them, it's perfectly okay to have the heating on at 19 degrees. But women have a very different biology. Usually after three o'clock, we're all very cold, which isn’t good for our productivity.
It’s these kinds of small eye openers which can make a difference. There's always a lot of emotion emerging when you talk about unconscious bias. But, I believe that when eyes are open, you can then address the issue, without the emotion.
We had lovely speakers and a great full day planned with all our workers and coworkers to get diversity on the agenda. But, of course, due to the Coronavirus, we had to cancel it. We haven’t brought it back on the agenda yet because it's something that really needs everyone's attendance. I always find that difficult on Zoom or on Teams. There’s not enough interaction and, for this, we need interaction from everyone.
While Gaby and her team’s plans have been temporarily postponed, we are certain that, once we can all be together again, they’ll be off to a successful start. In the meantime, if you need tips on how to address unconscious bias in your organisation, check out our guide for VCs.