VC firms have much influence at a portfolio company level. Because VC's know that there is a direct link between diverse teams and better returns. They are beginning to implement not just because it's "quote-on-quote" the right thing to do, but because it matters when building out a successful investment portfolio.
According to Rebecca, leading Canadian VC's, such as Inovia, Yaletown and McRock have been pioneers in DEI initiatives, as has the National Association, the Canadian Venture Capital and Private Equity Association. DEI at the fund level is becoming of increasing importance as it allows the investors to better connect with the diverse nature of the start-up community that is seeking financing.
Start micro to maximize return
DEI and social impact can be a lot like growing a fund. You’ve got to start somewhere and watch the capital grow.
Metiquity Ventures (2021) is one of Alberta’s newest emerging micro venture funds. The founders are focused on nourishing DEI and ESG to grow with authenticity not forced metrics (even if the steps seem small at first). The pre-seed fund is focused on early-stage founders and companies; those startups who are often underserved in the traditional VC landscape.
“Regionally there is a lack of adequate supply of true ealy-stage risk capital for founders in general,” says Jacques LaPointe, co-foundering General Partner. “Our purpose is to fuel the next-generation of founders across the Prairies, while building a sustainable foundation for future investment and generating returns for the investors who are pioneering this asset class. It means thinking outside of the historic VC mindset and looking towards funding founders who may be overlooked because they haven’t had opportunity to scale or they don’t fit the traditional VC thesis.”
LaPointe and co-founder Bryan Slauko are building a micro-fund and firm (Fund I $10 million) that is focused on people not just metrics; that means being due-dilligent around ESG, diversity and social impact, not just investment thesis and fund management.
The firms first steps were to adhere to the CFA Institutes Code of Ethics and Standard of Professional Conduct which emphasizes elements such as integrity of the profession and the interests of clients above a firms, acting with integrity, competence, and respect and maintaining and developing professional competence.
Metiquity also recognizes the Kauffman Fellows Stewardship Pledge for the Innovation Investor. Developed in Silicon Valley the plege holds investors to put positive societal transformation first, not just monetary returns and asks them to plege the below three and several other benchmarks.
Kauffman Fellows Stewardship Pledge highlights:
1. Our industry of innovation capital has the power to drive both private value creation and sustainable, positive societal transformation.
2. My purpose is to direct capital and expertise to create shared value by accelerating the pace of innovation through company formation and growth.
3. My investment decisions affect the well-being of individuals inside and outside my own organization, the companies in which we invest, my capital partners, the industries in which we work, and beyond, both today and in the future.
Metiquity benchmark Environmental, Social, and Governance (ESG) and Diversity by following the UN’s sustainable development goals and the CFA’s EGS guidelines. The UN’s Sustainable Development Goals address the global challenges including poverty, inequality, climate change, environmental degradation, peace and justice. Learn more and take action.
Gender Parity in founders
Of Metiquity’s first investments/companies, half are either founded or co-founded by women (2023).
“Metiquity was formed to unlock growth potential for innovative founders on the cusp of commercialization and pioneering investors who invest capital alongside them. This means actively seeking out the most diverse teams, founders and ideas possible – this is part of good governance, and successful portfolio building,” Slauko says. “By no means do we want to overstate or say that we are leading a DEI, social impact or gender parity movement in early stage investment or as part of our fund. However, by beginning our journey by following and benchmarking some of these standards, ethics and guidelines from the Kauffman Fellows, to the UN’s Sustainabily Dev Goals and CFA’s ESG Guildelines, we hope to begin to create a culture and firm that puts social impact on par with successful returns.”