This article first appeared on GoMedici.com.
Plenty of articles stress the need for or lack of diversity in the startup world, but without specific evidence, that argument might fall flat with some audiences. Using the positive trends of our 2016 and 2017 portfolio companies, we offer several examples of success that back up the claim that diversity benefits founders of all backgrounds.
The Venture Center (VC) FinTech Accelerator portfolio is made up of an encouragingly diverse set of founders. Our 2017 batch of FinTech startups consisted of 60% minority and women-led (CEO) founding teams coming from across the US and world and bringing with them a variety of perspectives that transcended the financial industry.
VC FinTech is an on-site accelerator program that brings together startup founders for 12 weeks in Little Rock, Arkansas each summer. During the recruitment and due diligence phase of the process, we first evaluate the applicants based on merit to ensure the highest performing companies with high potential for growth are invited to further interview rounds. But part of the deliberate recruitment strategy for the program includes assessing how the 10 companies will interact with and benefit each other during the program.
To achieve the richest variety possible, we consider the diversity of information, ideas, background, expertise, experience, interpersonal behaviors, and the valuable network that each potential VC FinTech company brings to the table. During the program, the founders have the opportunity to learn from each other and from VC FinTech alumni, building relationships that continue well after Demo Day. It is from this starting point, the basis of a recruitment philosophy on how to achieve better outcomes, that we believe we arrived at having such a diverse set of founders.
Often, it is a unique perspective that solves a problem. And, despite the differences in race, age, gender, geography, religion & industry expertise, that is what each of our founders all have in common: each has a unique experience that led them to create a FinTech solution. We have a former tier-1 bank compliance executive solving compliance issues with RegTech, the former CIO of Midway Games with a gamified savings tool, a former community banker with a personal financial management tool for community bank customers, a 20-year FinTech veteran executive with a customer loyalty gift card system for merchants, and a two-time entrepreneur who just made the *Forbes ‘*30 Under 30’ list. What’s more, each of these talented aforementioned founders leading their companies is a woman and/or a minority.
The diversity of our portfolio has contributed to our founders more quickly overcoming barriers that might have otherwise stymied their growth and success:
- Need to set up a global technology team? A process that normally takes months was shortened to weeks when our 2016 founders received advice and help from alumni with connections and experience who have done it before.
- Signing your first customer is hard. When two 2017 company co-founders decided to collaborate, her community banking experience made all the difference in helping her fellow cohort co-founder sign his first customer.
- Looking for partners on other continents? When two entrepreneurs from Africa met in our 2016 cohort, they helped each other land partnerships in Africa that expanded their distribution.
- 18 of 20 companies in our portfolio have raised follow-on capital, which is pretty impressive for a seed-stage program that targets startups with little or no revenue.
- At just 18 months after the completion of our first program, the first batch of 10 are averaging over $2 million each in capital raised with several companies experiencing significant success, including signing numerous banking partnerships and one startup announcing their creation of 65 jobs.
- Another company received an endorsement by the American Bankers Association.
- Two companies have entered into formal partnership agreements with the largest global provider of financial technology services.
- One company was ranked Finovate “Best in Show,” and three companies were featured at Money 20/20 this year.
While having a promising FinTech product is a prerequisite for program acceptance and investment, how these founders add to the mix as a cohort as it relates to de-risking all 10 startups in each portfolio is also an important element. Part of that equation is the diversity of the group. Add in the program’s curriculum, access to great mentors, monetary investment, and participation from our partners and dozens of banks, and you’ve got all you need for a winning formula.
As we have shown through just a handful of examples, diverse people bringing together their insights, knowledge, professional experience, and networks has been an important factor in the success of the VC FinTech Accelerator. With more programs and investors placing an emphasis on supporting diverse founders, we hope success stories like ours will become the norm in the industry.
More About The Venture Center’s FinTech Accelerator
The FinTech program, a collaborative effort supported by The Venture Center, the State of Arkansas, and FIS, accelerates the development and growth of early-stage financial technology ventures. 10 startups will participate in the rigorous 12-week program in Little Rock, Arkansas. In addition to a $75,000 investment, each VC FinTech participant receives in-depth mentoring and training from FIS and The Venture Center as well as personal access to the FIS C-suite and senior leaders. Top decision-makers from more than 25 banks across the US meet with participants to form connections that can lead to potential sales and candid feedback about the solutions, and hundreds of bank leaders and investors attend Demo Day. To learn more about the VC FinTech Accelerator, visit www.venturecenter.co/vcfintech.
Apply by February 10 to be eligible for the 2018 program.