Investment | Canadian venture capital lacks diversity, finds BDC

Posted On: November 12, 2023

Despite recent progress, Canada’s venture capital sector still lacks diversity among its executives and executives, according to the second edition of an annual survey from the Business Development Bank of Canada.

Updated yesterday at 4:00 p.m.

Based in Montreal, the BDC is the principal federal Crown corporation for investment and financing of SMEs in Canada.

This second annual survey of diversity, equity and inclusion, or DEI in analyst parlance, includes 72 venture capital managers and 1,192 invested companies. According to the BDC, this participant contingent represents almost two-thirds (63%) of all active venture capital funds in Canada.

Among the BDC’s key findings is that gender diversity in venture capital “remains inadequate in the upper echelons of the private placement sector.”

“Diversity on the boards and in the management of the portfolio companies [de placements privés en capital-risque] “still poses a problem,” the authors of the BDC statement note.

For example, only 20% of portfolio companies have achieved gender parity on their management teams, while almost half (44%) still have an all-male board.

Additionally, the BDC report authors note that “nearly half (48%) of these limited partnerships are wholly owned by men,” while 8% are wholly owned by members of visible minorities, and 2% are wholly owned by women or Aboriginal people.”

Encouraging signs

Encouragingly, the authors of the BDC report note that “funded companies continue to take steps to improve diversity in their teams.”

Almost two-thirds (63%) of the funded companies that responded to the survey hired “at least half the people.” [depuis un an] were women.

And in just over half (56%) of these funded companies, “at least half of the people hired were visible minorities.”

“The proportion of public companies in which women and members of visible minorities make up at least half of the workforce has increased over the past twelve months. We view this growth as a positive step for the sector,” said Alison Nankivell, senior vice president of investments and growth funds at BDC Capital.

Finally, the authors of this second BDC survey note that while a quarter (27%) of venture capital firm investment committees are still made up entirely of men, “just over two-thirds (68%) of these investment committees include at least one woman and 11% at least one indigenous person.