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Reflecting On Our Progress: One Year Since The Launch Of Diversity Spotlight

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One year ago, the Crunchbase community came together to centralize and highlight data about U.S. companies with diverse leadership and the investors who fund them with the launch of Diversity Spotlight.

Since then, Diversity Spotlight has enabled entrepreneurs to highlight diversity on their own company profiles, investors to create visibility into the diversity of their portfolios, and users to analyze trends and search Crunchbase using diversity as a filter. Our goal for this feature is to create a central place of connection for diverse CEOs and VCs, and hold the industry accountable for continued action toward closing the funding gap for diverse founders.

Despite commitments made by many VCs in 2020 to fund more diverse founders, Black entrepreneurs received just 1.2 percent of the record *$137 billion invested in U.S. startups in the first half of 2021. And, women-only founded companies received only 2 percent of U.S. venture capital dollars invested in the first half of 2021. Building the Diversity Spotlight dataset is one way we can better understand industry progress and continue to push for change, but it’s clear we have a long way to go.

That’s why we’re providing this update on where Crunchbase’s Diversity Spotlight data stands today and are asking for the support of our community to help us expand this resource.

The state of Crunchbase’s Diversity Spotlight data today

Diversity Spotlight data comes from a number of sources, including Crunchbase Venture Program Partners, journalists, the Crunchbase data management team, and VCs. We’ve also asked underrepresented founders to update their company profiles with the appropriate Diversity Spotlight tags.

In the last year, 1,393 contributors have added diversity data to Crunchbase, and 23,604 profiles have been **updated with Diversity Spotlight tags including, but not limited to:

To date, we have the most limited data on Native Hawaiian/Pacific Islander Led and/or Founded companies. We’ve collected the most data on Women Founded companies; we now know about 20,233 companies and VCs that are Women Founded.

“Actually seeing the numbers on the lack of diversity within venture capital and who gets venture investment helps us tangibly acknowledge the inequity in the industry. It presents an opportunity for those of us who believe that investing in underrepresented groups is one of the strongest opportunities for returns. When the overwhelming majority of capital is going to one demographic group, it’s great for funds to be able to identify high-potential startups from other groups. We’ve seen the data be helpful to underrepresented founders who are actively looking to identify investors investing in companies with diverse leadership.”

What we’ve accomplished so far

In addition to providing data for other news outlets covering funding and diversity, Crunchbase’s Diversity Spotlight data is an invaluable resource for our team. This dataset has enabled us to report on the state of diversity in venture capital today through projects like:

We’ve also created several Crunchbase lists that are enriched with insights on diverse companies, investors and funding trends:

How to add your diversity data to Crunchbase

To continue building this resource and its impact, we encourage U.S. investors and startup leaders to get verified and add their diversity data to Crunchbase.

“In a world where we love to show solidarity with marketing statements, diversity data such as the info compiled by Crunchbase helps shine a light on who is walking the walk — it’s impossible to argue with facts. There is just too much existing data about how diversity is better for business, and how it creates stronger companies that are ultimately more profitable than non-diverse companies.”

Here’s a quick video walkthrough covering how you can add diversity data to your Crunchbase profile, and how you can search in Crunchbase using diversity as a filter:

What’s next for Diversity Spotlight

We have a long way to go to close the funding gap for diverse founders, but the positive response we’ve seen to Diversity Spotlight gives us hope. To the investors, startup leaders and Crunchbase community members who have made, and continue to make, Diversity Spotlight possible–thank you.

We’ve also heard from our community a desire for us to expand our Diversity Spotlight tags and international coverage. Know that we take this feedback seriously and each suggestion for improvement helps inform our plans as we continue developing this feature.

If you have an idea about how to improve Diversity Spotlight, please let us know by sending an email to spotlight@crunchbase.com.

*Funding includes seed, venture, and private equity to venture-backed companies with founders associated. Data is based on announced funding to companies from January 2021 – June 2021. 

**Diversity Spotlight tag data was last updated on Aug. 11, 2021.

This content was originally published here.

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