Cornerstone Partners cofounder Rodney Appiah said that he “doesn’t buy” that pipeline problem excuse touted by VCs.

Founders from minority backgrounds are being excluded from VC funds, according to a new report. Around 3% of founders that were backed by VCs in the UK in 2019 were Black. Researchers claim the so-called “pipeline problem” is more of a perception than a reality. See more stories on Insider’s business page.

Founders from minority backgrounds are being excluded from venture capital funding in the UK, a new study has warned.

Around 3% of founders who had received VC backing in London identified as Black, while 7% described themselves as Asian, according to new research from angel network Cornerstone Partners and strategy group Engage Inclusivity.

This compares to the wider population of London, where more than half of the firms eligible for VC investment are based, which is 24% Asian and 16% Black.

The so-called “pipeline problem” is often cited by funding groups as an excuse for the lack of diverse founders in their portfolios.

But Rodney Appiah, the chairman and cofounder of Cornerstone, said his company “doesn’t buy” that argument.

“Our own experience at Cornerstone tells a different story, where we see between 300 to 400 diverse founder-led businesses a year,” he said.

“Coupled with deal flow generated by other diversity-focused VCs and angel networks, where overlap tends to be limited, it becomes apparent that the so-called pipeline problem is more a perception than reality.”

Appiah said his research suggested that there was a “healthy pipeline” of diverse VC-ready businesses but that they struggled to secure institutional investment. The Cornerstone cofounder said that around 95% of the hundreds of business proposals put to the company each year came from Black and diverse founders.

The researchers conducted two surveys into the investment landscape in 2019.

They quizzed both businesses that had not raised funds but showed all the hallmarks of being “VC-ready”, as well as companies that had announced their


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