3 things to remember when diversifying your startup’s cap table

Making purposeful decisions on diversity and inclusion in the workplace goes beyond simply building your team.

As a minority female entrepreneur and co-founder of a women’s health startup, ensuring diversity within our cap table has been a must — and has proven instrumental to our success. Breaking down your cap table to diversify your investors based on a variety of criteria will provide far more value than funding alone.

I have spent the last 10 years working in women’s health, and the lack of diversity in investors and leadership baffles me. From the inception of my company until now, diversifying our cap table has been a top priority that will continue to serve as a key factor when bringing in investment.

Prioritizing diversity will bring a wealth of knowledge, perspective and expertise to the table. We knew that to make this happen, we had to focus on building a product and team that people wanted to invest in. Many startups talk about wanting to adding diversity to their cap table, but how should you go about it?

Set your investor criteria from the beginning

My co-founders and I were all in agreement that we would select our investors based on a variety of factors, such as type of investor (VC, angel, family office, etc.), gender, race, expertise and a deep passion for our mission. While arriving at these criteria, my co-founders and I wrote down reasons why each factor was important to us.

As a startup tackling a problem that affects women globally, it was particularly important for us to have women investors, racially diverse investors and industry professionals who understood the magnitude of the problem we were trying to solve.

Recent studies have shown that women and people of color disproportionately experience medical gaslighting. Seeking out investors who fit this profile was critical to onboarding people who we felt would share our passion for our work and be supportive along the way.

When setting your criteria, you should define your goals clearly and identify the value each investor will bring to the table. As a team, think about what you would want if you could have it your way and why.