Want to build a successful startup? It helps if your launch team is ethnically diverse. According to data from the Kauffman Fellows Research Center, companies with diverse launch teams raise more capital in each fundraising round, and also perform 30% better when they go public.
These findings are a reminder that when you’re building a company, it’s vitally important to bring together a mix of perspectives and experiences in order to serve customers and other stakeholders effectively. But the bigger your company grows, the harder it is to get diversity right — so startups need to get serious about it from the very beginning.
Here are five ways to make your startup more diverse:
- Hire early. At Toucan many of our first employees were women, which helped us to hire more women as we grew. We weren’t as quick to hire people of color, though, and we’re still playing catch-up when it comes to increasing ethnic and racial diversity. So pay attention to your first few hires: they set the stage for everything that follows.
- Focus on culture. After your first 15 or 20 employees, your company culture is locked in and hard to change. To build an inclusive organization, stay focused on diversity as you grow, and work to create a culture that’s welcoming to people of all backgrounds.
- Look beyond education. Ivy League diplomas might look impressive, but they’re a quick way to filter out diverse and talented candidates. Make a point of paying attention to smart, hungry graduates from non-Ivies and HBCUs in order to boost diversity.
- Hire for core competencies. Many hiring methods, including interviews and personal recommendations, reinforce existing norms and reduce overall diversity. Focus on the skills you need, and try to hire people chiefly based on work samples and proven competencies.
- Build a brand. Once you’ve built a diverse team, let them shape your culture. Canvas opinions and distil them into values that can inform your employee brand and guide your hiring. That way, future employees will know you’re a welcoming and inclusive employer.
Get these key elements right early on and you’ll spark a virtuous cycle, with a diverse team building a culture that draws even more diverse and talented employees to your startup. That’s the best way to build a successful business, raise capital, and sustain investors’ interest as you eventually move toward an IPO. So plan for the future — and begin building a more diverse company today.