Despite the UK’s position as one of the world’s most dynamic technology hubs, the industry still faces a persistent and well-documented challenge – equitable access to investment.
Underrepresented entrepreneurs – particularly women, ethnic minorities, LGBTQ+ founders, and individuals from non-traditional backgrounds – remain significantly disadvantaged when it comes to securing the capital needed to start and scale high-growth technology businesses.
This disparity is particularly striking in a sector built on innovation and disruption. According to the British Business Bank, in 2023 all-female founding teams received just 2% of UK venture capital (VC) funding, while mixed-gender teams secured only 12% – leaving most capital flowing to all-male teams.
These imbalances extend into emerging tech sectors such as artificial intelligence (AI) – research from the Alan Turing Institute reveals that female-founded AI startups accounted for only 2.1% of UK VC deals between 2012 and 2022, receiving a mere 0.3% of the total investment during that time.
In addition, the Social Mobility Commission found that people from working-class backgrounds represent only 19% of tech sector professionals – despite making up almost 40% of the UK’s working population.
For an industry that prides itself on solving complex challenges, the exclusion of so many potential innovators is more than a contradiction – it reflects the requirement for positive imagination, inclusion, and long-term value creation. While action is being taken within a select group, more is required for an industry shift.
Network bias
While there are a growing number of initiatives aimed at addressing the investment gap, structural inequities remain deeply embedded. The UK’s tech and investment ecosystems – like those in Silicon Valley – are still heavily network-based and often risk averse when evaluating so-called “non-traditional” founders.
Despite the vocabulary of innovation, much of the capital allocation still relies on pattern recognition – investing in those who look like, sound like, or were educated alongside previous success stories.
This creates a double bind – under-represented founders are undercapitalised, and their lack of capital is used as a proxy for a lack of potential. There are three key systemic barriers:
Access to networks – Early-stage fundraising is still dominated by warm introductions. If you’re not in the room, you’re unlikely to be invited to pitch.
Bias in risk perception – Founders who don’t fit the typical mould – often white, male, and Oxbridge-educated – are perceived as riskier investments, despite research showing that diverse teams often outperform on several metrics.
Structural gaps in support – Programmes such as accelerators, incubators, and grant schemes often don’t reach non-traditional communities early enough to make a meaningful difference.
How thoughtful technology can help
Ironically, while technology contributes to these inequities, it also offers part of the solution. Early examples of disruption are emerging.
Data-driven VC platforms are beginning to use machine learning to identify overlooked founders based on fundamentals, not personal networks.
Decentralised finance (DeFi) and crowdfunding are creating alternative routes to capital, bypassing traditional gatekeepers.
And corporate innovation funds are incorporating environmental, social and governance (ESG) practices and diversity, equality and inclusion (DEI) principles into their portfolios, incentivising broader inclusion.
However, without intentional design, AI and algorithmic systems risk replicating – or even exacerbating – the biases found in historical data. If we train decision-making tools on skewed investment histories, we risk encoding today’s inequality into tomorrow’s automation.
Why this matters to the tech sector
Having held senior technology and operational leadership roles across global banks and fintech scaleups – and now advising boards and startups across the UK, US, and EU – I’ve seen the issue from multiple vantage points.
Technology doesn’t just benefit from diverse talent – it requires it. Whether developing scalable architectures, building responsible AI models, or designing secure digital ecosystems, the strength of the solution is often a reflection of the diversity behind it.
Underrepresented founders often bring differentiated market insights, a deep understanding of overlooked customer segments, and resilience forged through navigating structural challenges. These are exactly the attributes needed to succeed in a fast-changing tech landscape.
Five actions to close the investment gap
Bridging this gap demands more than good intentions – it requires deliberate, coordinated action. Here are five ways the tech and investment communities can lead:
- Rebuild the discovery process – Leverage AI to surface strong founding teams from outside traditional clusters. Standardise pitch evaluation criteria to prioritise traction and potential, not just pedigree.
- Diversify investment committees – Diverse decision-making teams lead to broader deal flow and better investment performance. Review who’s sitting at the table – and who’s missing.
- Support beyond seed stage – Many underrepresented founders secure micro-funding but are left behind at Series A and beyond. Investors must design follow-on strategies that support sustainable scale.
- Enterprise buyers as catalysts – Large tech companies can reshape ecosystems by diversifying procurement. A single enterprise contract can define the trajectory of a startup. CIOs and CTOs should assess the diversity of their vendor ecosystems.
- Measure, report, act – Track where your money is going. Publish diversity metrics. Set tangible goals. Change doesn’t happen without accountability.
A call to tech leaders
As stewards of the digital future, those of us in the tech sector must use our influence to reshape the system. Bridging the investment gap is not just a moral imperative – it’s a strategic one.
Underrepresented founders are already building the future – from ethical AI and climate solutions to inclusive digital platforms and secure fintech infrastructure. But many are doing so without the capital needed to truly scale.
For investors, this is the moment to look beyond the familiar and recognise untapped potential. For technologists, it’s about building inclusive tools by design, not by accident. And for the entire ecosystem – we must expand our definition of what a “tech founder” looks like.
Let’s change that – together.
