BDC Capital report finds Canadian VCs are hiring more diverse candidates but facing difficulties with talent retention

DEI survey also indicates VC firms, portfolio companies lack diversity at decision-making level.

Hiring-wise, it appears that Canadian venture capital (VC) firms have been making progress on the diversity, equity, and inclusion (DEI) front. Women and visible minorities make up at least 50 percent of fresh hires at half of VC firms, according to BDC Capital’s first national DEI reporting survey.

The report’s findings are even more encouraging on the career advancement side of the equation—women and visible minorities account for at least half of promotions at 72 percent and 53 percent of Canadian VCs who provided answers, respectively.

Despite this progress, data collected indicates that Canadian investors are also struggling to retain women and visible minorities.

However, despite this progress, the report indicates that Canadian investors are also struggling to retain women and visible minorities.

Forty-eight percent of VC fund general partners (GPs) surveyed by BDC Capital reported that at least half of their employee departures were women, while 38 percent said that at least half of their departures were visible minorities.

In a post announcing these metrics, Alison Nankivell, BDC Capital’s senior vice president of fund investments and global scaling, noted that “the elevated level of diverse employee departures is likely a symptom of current competition in the labour market.”

But Nankivell also offered another possible explanation: “Some GPs may also be having trouble creating inclusive cultures that offer diverse employees a sense of belonging and paths to promotion.”

BDC Capital first unveiled its DEI reporting template for Canadian GPs in February 2022 in a push to create a benchmark of data and take stock of the state of DEI in the Canadian VC ecosystem. As Canada’s largest and most active VC investor, Nankivell noted that BDC Capital’s portfolio “can, to some extent, serve as a proxy for the industry.”

With this goal in mind, the Crown corporation sent its DEI reporting template to all of its 71 GPs—which collectively manage 115 funds, including internal BDC Capital funds and external funds—and their 1,115 portfolio companies. A year on, 57 GPs, or 80 percent of the group surveyed, and 544 portfolios companies (49 percent) provided responses. This report, released in December 2022, collects these findings.

The survey also found that at VC firms in Canada, gender and racial diversity is particularly lacking in senior investment roles, but is more prominent in junior investment and operational positions, mirroring the results of CVCA’s 2021 State of Diversity and Inclusion Report.

Only 11 percent of fund managers surveyed have at least 50 percent woman and visible minority representation among senior investors, compared with 43 and 44 percent in junior investment roles. Women and visible minorities also have a higher presence in operations roles.

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BDC Capital also found that there is lack of diversity in GP ownership and on investment committees. Forty-three percent of GPs asked were owned entirely by men, while a mere four and six percent were owned entirely by women and visible minorities, respectively. Moreover, only 63 percent of GPs surveyed have a woman on their investment committee, while just 55 percent possess an investment committee with a visible minority member.

Additionally, the survey found that while Canadian GPs are aware of the importance of diversity and are hiring more diverse employees, they need to push DEI practices deeper into the investment process.

“While our survey indicates that 89 percent of GPs have a standard code of conduct or anti-discrimination policy, only 30 percent have diversity targets for portfolio company boards and management teams, and only 30 percent have organizational culture surveys and methods to track progress,” said Nankivell.

On the portfolio company level, the survey saw a much lower response rate. Given this, Nankivell noted that “findings must be interpreted cautiously.” That being said, she noted that the data points to at least one clear, recurring trend: VC-backed Canadian companies also lack diversity in senior decision-making positions.

According to the BDC Capital report, only 21 percent of company respondents have at least gender parity on the management team, while 41 percent don’t have any visible minority individual in management. Their boards have even less diversity, as almost half are composed entirely of men and only 11 percent have at least gender parity.

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“This stands as a key issue, since boards have so much influence on making diversity a priority for companies,” said Nankivell. “Most importantly, these results underscore the important role GPs must play in advancing diversity in their portfolio companies”

BDC Capital’s DEI reporting template was inspired by the Institutional Limited Partners Association’s diversity metrics template, and developed through a consultative process with Canadian limited partners (LPs), GPs, and the Canadian Venture Capital and Private Equity Association. With this tool, BDC Capital also hopes to help Canadian GPs consolidate requests from LPs for DEI data and help them share DEI progress with current and prospective investors.

Nankivell described this survey as “just the beginning of an important initiative,” noting that the organization plans to launch its DEI reporting exercise again this year and address concerns around privacy this time around, especially at the portfolio company level.

According to Nankivell, a few fields were left blank more often than others, including those dealing with sexual orientation and veteran status. “We recognize these questions are extremely personal and will look for ways to build greater trust and awareness about the importance of this data collection exercise,” said Nankivell.

Feature image courtesy Unsplash. Photo by Christina @

Josh Scott

Josh Scott

Josh Scott is a BetaKit reporter focused on telling in-depth Canadian tech stories and breaking news. His coverage is more complete than his moustache.

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