Startup incubators and accelerators represent an important avenue of advancement in the tech industry for women and underrepresented minorities. And while several high-profile accelerators are taking specific steps to recruit companies led by diverse founders, progress is slow in coming.
That was evident on the stage at the end of Techstars Seattle’s latest Demo Day last week—it was almost all men posing for the class picture (above)—and in a new report outlining strategies to attract more women and minority entrepreneurs to startup support programs.
The report, from the Roxbury, MA-based Initiative for a Competitive Inner City (ICIC) and JPMorgan Chase, notes that startup accelerators help entrepreneurs overcome challenges in networking, education, and financing.
“These challenges are most acute for women and minority tech entrepreneurs, suggesting that incubators and accelerators could have the greatest impact on their ventures,” the researchers write. “Yet, women and minorities are not participating in high-tech incubators and accelerators at the same rates as their white, male counterparts.”
The report finds that women and minorities are underrepresented because of lacking outreach and recruitment efforts, intentional exclusivity, and biases inherent in accelerator selection processes. Program design and schedule can also play a role. Investor and networking meetings during the dinner hour can be particularly hard to attend for working mothers, for example.
Techstars, among the world’s most prominent startup accelerator programs, last fall outlined specific goals and actions to measure and improve diversity among the scores of startups that go through its programs each year. The goals include doubling in four years the number of women applicants to its programs and the number of women mentors who guide startups, and tracking and doubling the number of underrepresented minorities in its program.
Despite concerted efforts, none of the nine companies that just completed Techstars Seattle were led by women.
“We were more disappointed in our diversity results this past program than any of our public critics, but not for the reasons you’d think,” Techstars Seattle managing director Chris DeVore says in an e-mail to Xconomy. “It’s because we’re actually putting a ton of effort into this and just not yet seeing the results we’d hoped or expected. We intend to maintain our focus on this, knowing it’s a long road to make real systemic change, but we definitely don’t plan to make short-term or tactical changes just to satisfy critics—our motivation and commitment to this is core to Techstars, not being driven from outside.”
For the record, 20 percent of the companies that applied to Techstars Seattle had at least one woman founder, and the accelerator offered spots in its 2016 class to two women-led companies. One took an offer from Y Combinator, and the other sought special terms that DeVore describes as “unfair to the rest of the class.”
Through its five prior classes, 140 founders came through Techstars Seattle, only 11 of whom were women.
About a fifth of the people in Techstars Seattle’s mentor pool are women. And 30 percent of the lead mentors helping the 2016 class were women, DeVore says.
The ICIC report estimates that 14 percent of businesses in the tech sector are owned by women, and 19 percent are owned by minorities. “Their representation in high-growth, high-tech firms is likely lower,” the researchers write.
The report did not include diversity statistics for businesses that go through startup incubator and accelerator programs, citing a lack of reliable data. (The International Business Innovation Association, a trade group for incubators and accelerators, recently undertook a project to better measure demographic data of participating companies and managers.)
Anecdotes gathered from interviews with 51 managers of startup support programs suggest participation among women and minorities is “relatively low.” Incubators—which are often funded by governments with explicit goals of expanding entrepreneurship to underrepresented groups—likely have higher participation rates than accelerators, according to the report, which also identified dozens of incubator and accelerator programs geared specifically for women, minorities, veterans, and other groups.
The report suggests incubators and accelerators could expand their recruiting networks by improving diversity among their leaders and partners; combat selection committee bias by diversifying those committees, which select companies accepted to their programs, and offering training in unconscious bias; design specific programs focused on women and minority entrepreneurs; and create cultures of inclusivity.
The steps Techstars is taking locally and nationally largely fit with the strategies recommended in the ICIC report, which was released earlier this week at Detroit Startup Week.
In Seattle, Techstars attended or partnered with 14 local organizations promoting women and minorities in technology, including Latinos in Tech, HERE Seattle, and Girl Develop It, as well as holding its own recruitment and networking event focused on women.
For 2017, DeVore says Techstars is planning to do more, including diversity events focusing on inclusive culture, and targeted recruiting of women and minorities via referrals from its investors, mentors, alumni, and partners.
Techstars has had more rapid success on this front in other cities. In Boston, for example, the latest class of 14 startups included two led by women and four more with at least one woman co-founder, an improvement over previous sessions.
And Techstars as a whole has broadened its offerings for entrepreneurs through the acquisition of UP Global, the Seattle-based organization behind Startup Weekend events and other programs designed for entrepreneurs earlier in the process of building a company.
