Sustainability and value creation go hand in hand, sustainable businesses will create more long-term value. Diversity is a core part of sustainability and Equality is one of the three UN 17 Sustainable Development Goals (SDGs) in focus at Spintop.
Working strategically with diversity we’ve seen that some key factors have worked out well both for making investments,for our portfolio companies and for ourselves. We share some of these insights below and hope you’ll be inspired and encourage you to share some of your learnings.
Spintop’s current status is that 30% of our active portfolio companies are led by female CEOs. 30% of the management team members of the same companies were non-male. The diversity in the entire organizations was at 29%. We still have some way to go to what is considered full diversity at 40% (either way of course). We have portfolio companies with large product and tech teams that are close to a 50/50 diversity.
So these are our insights, so far.
- A clearly articulated belief that is part of our investment strategy and the mandate our LPs invest in: Sustainable businesses, and we see diversity as a core component in sustainability, will be more successful in the longer term and thus create more value for us as investors.
- A highly structured and well defined analytics and due diligence process. Diversity analysis is part of our sustainability analytics and due diligence framework. We do it always and we have a consistent way of measuring and evaluating.
- A culture based on meritocracy. Facts, and argumentation based on facts and logical reasoning is what counts when we discuss and reach conclusions. Opinions and judgements are not accepted unless they are very properly backed up.
- At least some awareness of “hidden biases” and similar topics. We have had workshops with experts in the field to help us be more aware of how our own minds can trick us.
Working with portfolio companies
We have observed a number of common themes among well diversified portfolio companies. As board members and investors, we try to support the management teams to use this when they build their organizations.
- Clearly articulated values and cultural guidelines,
typically leading to a strong and sound corporate culture. Having been in the VC business for quite some time, we know there is a very strong correlation between corporate culture and great success. Much, much higher than the correlation with smart strategies, massive spreadsheets and great tech or sales teams.
- KPI-tracking and communication
We have tracked gender diversity in each of our portfolio companies, as part of the broader quarterly ESG KPI-reporting. The results, for each company and for the aggregated portfolio, is shared with all portfolio companies and is an integrated part of our quarterly reporting to LPs.Measuring and sharing transparently between companies makes a lot of things happen. The topic is raised in management team and board meetings. Companies see how their peers are doing and get inspired.
Same as for the Spintop team. It is about “what”, not “who”, strongly tied to values and culture.
- Allowing for a flexible/partial och fully remote set-up
Adhering to principles for remote work levels things out in a very interesting and sound way. Things like asynchronous vs synchronous work, documentation in writing and very high degree of corporate transparency.
Building Spintop as a firm
Very much the same as already mentioned above.
- Diversity, as part of the broader theme of sustainability, is an integrated part of our investment strategy and building our Firm.
- Shared values, as a foundation for the culture.
- Meritocracy, as mentioned above. Spintop has 100% transparent “development grids”, where one can see the proven skills and experiences required for different roles in the firm. This is the basis for bi-annual professional development plans and priorities.
- And of course we also measure the Spintop team’s sustainability KPIs and share with our portfolio companies.
If you’re interested, read more about our sustainability work here.