3 things to remember when diversifying your startup’s cap table – businesstraverse.com

Make deliberate decisions about diversity and inclusion in the workplace goes beyond just building your team.

As a minority female entrepreneur and co-founder of a women’s health startup, ensuring diversity within our cap table has been a must – and this has proven to play an important role in our success. Breaking down your cap table to diversify your investors based on different criteria will provide much more value than financing alone.

I’ve worked in women’s health for the past 10 years, and the lack of diversity in investors and leadership baffles me. From the beginning of my business until now, diversifying our cap table has been a top priority and will continue to be a key factor in bringing in investment.

Prioritizing diversity brings a wealth of knowledge, perspective and expertise to the table. We knew that to make this happen, we had to focus on building a product and team that people wanted to invest in. Many startups talk about wanting to add diversity to their cap table, but how do you go about doing that?

Set your investor criteria from scratch

My co-founders and I all agreed that we would select our investors based on several factors, such as investor type (VC, angel, family office, etc.), gender, race, expertise, and a deep passion for our mission. As we arrived at these criteria, my co-founders and I wrote down reasons why each factor was important to us.

Breaking down your cap table to diversify your investors based on different criteria will provide much more value than financing alone.

As a startup addressing a problem that affects women worldwide, it was especially important to us to have female investors, racially diverse investors and industry professionals who understood the magnitude of the problem we were trying to solve.

Recent studies have shown that women and people of color are disproportionately affected by medical gas relief. Finding investors who fit this profile was critical to hiring people who we believed would share and support us in our passion for our work.

In determining your criteria, you must clearly define your goals and identify the value that each investor will bring to the fore. As a team, think about what you would want if you could have it your way and why.