The VC market needs more diversity at all levels. The Female Entrepreneurship Report by KfW Research and the study "European Women in VC", which was supported by KfW Capital, show that women in particular are not just clearly underrpresented but also possess significantly less investment power. They make up 15 % of female general partners but hold only 9 % of the assets under management.
Encouragingly, we are seeing a positive trend towards a growing number of women at the partner level in VC funds as well.
KfW Capital addresses the issue of diversity in VC funds in the investment and reporting process, but also in measures beyond the investment process. Furthermore, KfW Capital is currently developing a new product in the scope of the Future Fund that mainly targets "emerging managers" and more women in the VC ecosystem.
Diversity plays a role in the standard appraisal and decision-making process within the scope of the due diligence review of our target funds and is addressed in the ESG appraisal, among other things. Diversity is also part of the annual ESG reporting. For example, in 2023 KfW Capital began to record the gender distribution of employees of all VC funds and its portfolio companies (at founder, management, and employee level for the portfolio companies and within the board) and further measures are taken to promote diversity.
KfW Capital offers the Emerging Manager Facility (EMF), a program to invest in smaller private venture capital (VC) funds managed by women or gender-diverse teams. These are often very young teams entering the VC market for the first time ("emerging managers"). The VC funds can receive a maximum of 25% of the fund volume from KfW Capital through the EMF. As with all other programs, KfW Capital invests in emerging manager VC funds on the same terms as private fund investors after successful completion of a due diligence (DD) process that is standard in the market. EMF is another component of the German government's Future Fund, which KfW Capital coordinates on its behalf; a total of around EUR 200 million is available for the new program until 2030 from resources of the Future Fund.
Further details on the EMF can be found in our investment program!
KfW Capital is also raising awareness within the VC ecosystem about the thematic area of diversity with measures that include:
Diversity and equal career development opportunities for all employees are a matter of course for KfW Capital. No employee may be discriminated against on grounds of gender, origin, ethnicity, religious beliefs, world view, disability, age or sexuality. Relevant principles are defined in the company’s Diversity Policy. KfW Capital is also a signatory to the German Diversity Charter and collaborates with external experts in order to promote an inclusive and diverse working environment.
