A new report from Acces2Funding, an organization dedicated to amplifying the experiences of disabled founders as they navigate the venture capitalist ecosystem, has revealed many of the stark realities involved in being a business owner with a disability seeking investment in 2023.
According to the report entitled “Transforming Opportunities and Outcomes For Disabled Entrepreneurs” which was officially launched last month at HSBC Innovation Banking’s offices in London, disability inclusion appears to be extremely low on the agenda for most VC firms and this is strongly reflected in a general lack of confidence amongst disabled founders when it comes to having their voices heard.
Amongst the report’s most startling findings which were extrapolated from a combination of literature reviews on the topic of disabled and neurodiverse entrepreneurs alongside depth interviews, data captures, events, promotions and policy engagement – it is suggested that disabled investment seekers may be up to 400 times less likely to enjoy success than their non-disabled counterparts. The results are taken from the U.K., where some 25% of small businesses are operated by disabled or neurodiverse individuals. The report’s authors additionally noted that 90% of disabled entrepreneurs expressed the belief that they have not been treated equally to nondisabled business owners pursuing investment. The resultant funding gap could be that over half a billion pounds in returns are simply left on the table.
Charitable mindsets
Access2Funding’s co-founders, as one might expect, themselves disabled and neurodivergent leaders are Joseph Williams CEO of inclusive job platform Clu and legally qualified disability rights activist and policy designer Celia Chartres-Aris.
The pair were motivated to start their fledgling social enterprise last year based on their own personal experience navigating the venture capital ecosystem. The organization’s mission is to educate and inform the business community through groundbreaking business cases showcasing disability-led entrepreneurial excellence and supporting investors to improve deal flow accessibility.
Amongst the primary identified barriers to VC funding for disabled entrepreneurs was a lack of accessible applications, systems and practices which were viewed as a significant hurdle by 32% of those canvassed. This could encompass anything from IT systems to the accessibility of physical premises and interview protocols. Furthermore, 42% complained of a lack of general resources on entrepreneurship with a further 32% citing a lack of online resources specifically tailored to disabled business owners. What information did exist appeared to only target elementary aspects such as how to set up an email address and which Microsoft license to buy as opposed to exploring the nuances of pitching.
Chartres-Aris feels that investors, based on decades of historical misalignment and misrepresentation, persist in viewing disabled people and disability-related businesses, through the lens of charitable giving rather than commercial success.
“So many of the disabled founders I speak with think that if they’re setting up anything related to disability it can only ever be a charity or a community interest company,” says Chartres-Aris.
She continues, “I’ve had this same conversation with about 80% of the founders that I’ve spoken to and there remains this pervasive mentality that if it’s anything to do with disability, and helping disabled people, it can’t be a for-profit business. It’s almost as if the market itself has internalized this ableism into disabled founders too.”
A closed shop
Zooming out from specific investment hurdles that disabled founders encounter, two unquestionable longer-term trends are likely to be significant sources of consternation for entrepreneurs with disabilities.
Firstly, though this is not universally the case, people with disabilities through their own life challenges often tend to be excellent innovators and a group that stand to benefit from the increased levels of flexibility and self-determination that can come with self-employment.
Entrepreneurship is often a disabled person’s best route out of the ghetto of discrimination, bias and ableism associated with conventional employment. Sadly, nervousness and a lack of education and disability confidence amongst the investor community places a significant roadblock where there really can’t afford to be one.
The other bleak reality is that, rather than being a generally accessible environment with just a step or two further to go before it can be viewed as disability-inclusive – the shadowy and elitist world of venture capitalism is often a closed shop to Joe Public as well.
“Over the last decade, 70% of all investment in businesses in the U.K. has gone to Oxbridge graduates,” says Williams.
“From some of the research we’ve done at Clu, I can tell you that Oxbridge graduates are amongst the least equipped to deal with the realities of running a business because of the protectionist environment that you stay in when you’re in academia, as compared to people that have been out there learning how to graft and solve problems. Sometimes, since birth.
“VCs are risk averse and want to stick to a formula that has been historically applied. However, this formula is based on a probability that doesn’t necessarily marry up to reality. It’s just that it’s been developed by the people that have come from those very same spaces,” he explains.
Regardless, Williams is entirely aware that arguments around morality or the inherent bias around entrenched interests will fail to hold sway in the long run. However, education around the practicalities of how to become a more disability-inclusive investor allied to cementing the business case might just win over hearts and minds.
Along these lines, Access2Funding will continue to develop its Access Maturity Model as outlined in the report focusing on the areas of infrastructure, awareness and marketing, submissions, screening and due diligence, term sheets and aftercare.
There are even considerations, informal at this juncture, around creating a dedicated new fund for disability-owned business investments. The latter might represent one of the best bets for the type of moving of the needle Williams feels is long overdue. On this, he is unequivocal:
“The default social narrative around disability continues to be one of support and pity. As disabled people, we deserve an excellence conversation as well. Every other diverse group has an excellence conversation and it’s time we seriously had one on disabled excellence.”
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