Accessing & Engaging Diverse Founders: Building Pipelines That Unlock Overlooked Value

Accessing & Engaging Diverse Founders: Building Pipelines That Unlock Overlooked Value

Learn how to access and engage diverse founders, and why it matters for both returns and resilience.

By Raissa Espiritu & Hilary Kilgour, Audaxa Ventures in Collaboration with The National Bank Investor Hub at Platform Calgary

Preface

This is the third chapter in the Uncharted Capital series—a national collaboration between Audaxa Ventures and Platform Calgary designed to equip emerging fund managers with practical tools, grounded insights, and real-world examples of what’s working (and what’s not).

In our first piece, we explored how to design a differentiated fund thesis. In the second, we unpacked portfolio construction and capital deployment. 

Here, we tackle one of the most critical - and overlooked - challenges for new managers: how to access and engage diverse founders, and why it matters for both returns and resilience.

This isn't a theory. It’s what we are all navigating, building, and learning in real time. 

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Why Diversity Matters in Venture Capital

Canada’s innovation economy is still leaving billions in value on the table. Women-founded startups attracted just 2.3% of Canadian VC funding in 2022, despite making up more than 6% of deal volume (ff.co). Women own nearly 18% of Canadian SMEs but capture only 4% of venture dollars (Boast.ai). Indigenous businesses already contribute $31 billion annually to GDP through 50,000+ companies, with growth projected toward $100 billion (NACCA). Meanwhile, immigrant entrepreneurs represent over one-third of all Canadian business owners (Statistics Canada)—yet they remain systematically underfunded in venture portfolios.

This isn’t just inequity—it’s inefficiency. Each overlooked founder is a missed opportunity for economic development, quality jobs, resilient companies, and scalable solutions to urgent challenges in health, climate, and community well-being. The data is clear: companies with racially and ethnically diverse leadership are 35% more likely to outperform their peers on returns (McKinsey). Diverse teams are also 6x more innovative and agile (Deloitte). In short, the market rewards inclusion.

As Sévrine Labelle, Managing Director of BDC Thrive Lab, puts it: “We are building investment models that prioritize equity and inclusion from the start. Diversity isn’t a side initiative—it is the foundation for strong companies, positive returns and meaningful impacts.”

Emerging fund managers - especially those building micro funds - are uniquely positioned to change this. With smaller fund sizes, tighter theses, and greater proximity to overlooked communities, they can intentionally widen the aperture of venture. By backing founders who have historically been excluded, they not only unlock competitive deal flow but also create proof points that traditional funds consistently miss.

As Dipo Alli, Managing Partner of Migr8 Capital, explains: “Immigrant founders bring resilience, global networks, and fresh perspectives that drive productivity and innovation. The real question isn’t whether they’re investable, it’s whether our capital systems are ready to recognize their value and back them. At Migr8 Capital, we see these entrepreneurs not just as participants in Canada’s economy but as catalysts for long-term wealth creation and growth in the Prairies and across the country”

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The Pushback: Myths vs. Reality

If the data is so clear, why does pushback persist? Too often, objections to inclusive investing rest on outdated assumptions. Here’s why they don’t hold up:

Myth 1: “Capital already flows on merit. Diversity lowers the bar.”

• Reality: At first glance, it’s easy to assume venture capital is a meritocracy—that the best ideas naturally attract the most funding. But in practice, capital allocation is shaped by networks, pattern recognition, and unconscious bias. Research shows people are more likely to trust and invest in those who look like them or share their background. In VC, this tendency is reinforced by the apprentice model—where junior investors learn from senior partners who often replicate familiar patterns. The result: women receive less than 3% of VC dollars, fewer than 8% of Canadian GPs are women (CVCA), and racial diversity at the partner level remains in the high single digits (The Logic). These aren’t just equity gaps—they are systemic inefficiencies that prevent capital from flowing to high-potential opportunities. 
• Counter: Diversity isn’t about lowering the bar. It’s about widening the lens of what merit looks like—surfacing founders and opportunities the system has consistently overlooked. Representation in fund leadership matters because it creates a trickle-down effect: diverse managers unlock trust in overlooked communities, expand deal flow, and direct capital toward untapped markets. When fund managers themselves reflect more diverse backgrounds, it creates a trickle-down effect that raises the bar by bringing greater opportunities.

Myth 2: “Diversity is a distraction from financial performance.”

• Reality: The data proves otherwise. McKinsey, Deloitte, Cornell, and Gallup all confirm that diverse teams deliver stronger profitability, returns, and innovation.
• Counter: Diverse teams anticipate risks, adapt faster, and build more resilient companies. That strengthens—not weakens—performance.

Myth 3: “There aren’t enough diverse managers or founders ready for capital.”

• Reality: This perception persists not because of a lack of talent, but because traditional venture networks aren’t designed to see it. Many diverse managers and founders sit outside the warm-intro circles that dominate VC deal flow. Yet across Canada, strong pipelines already exist—funds like BKR Capital, StandUp Ventures, Migr8, Misfits, The51, Spring Impact Capital, Sandpiper, and Audaxa Ventures are proving that investable opportunities led by women, immigrants, Black, Indigenous, and other underrepresented founders are real, growing, and competitive..
• Counter: The challenge is reach, not readiness. When intentional sourcing strategies and networks are applied, overlooked pipelines become impossible to ignore.The challenge is reach, not readiness. When investors expand sourcing—partnering with diverse accelerators, tapping networks like the Black Innovation Zone or Canada51 Hub, or engaging underrepresented ecosystems—the talent surfaces quickly. Often, these founders are overprepared, having had to prove traction with fewer resources. The question isn’t whether they exist—it’s whether capital is willing to look beyond its usual circles.

Myth 4: “Emerging managers are too small to matter.”

• Reality: Micro funds often source and back opportunities that later become core to larger portfolios. They act as scouts, feeders, and proof points in ecosystems where incumbents rarely look.
• Counter: What emerging managers lack in scale, they make up for in proximity, agility, and differentiated sourcing power. Emerging managers widen the pipeline and set the stage for long-term growth.

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The Data: Diversity as a Driver of Returns

The business case is no longer up for debate. Diversity isn’t charity, it’s strategy.

• Financial Performance: Firms in the top quartile for inclusion and employee engagement report 7% higher profitability and 15% stronger shareholder returns compared to industry peers (Cornell University, Gallup Workplace Studies, 2020). Companies in the top quartile for racial and ethnic diversity are 35% more likely to deliver superior financial returns compared to their national industry medians (McKinsey & Company, Diversity Wins: How Inclusion Matters, 2020).
  
  
• Attracting Customers & Driving Innovation: 65% of consumers took positive action after seeing an ad they considered diverse or inclusive (Think with Google, Diversity & Inclusion in Advertising Study, 2019). Organizations with an inclusive culture are 6x more innovative and agile (Deloitte, The Diversity & Inclusion Revolution: Eight Powerful Truths, 2018). 91% of customers say they would switch to a purpose-driven brand if offered a similar product and price (Simon Mainwaring, We First Branding, 2020).
  
  
• Cost Reduction & Retention: Organizations in the top quartile for employee engagement have 8% lower turnover (DDI & Deloitte, Diversity & Inclusion Report, 2020). Replacing an employee costs roughly 25% of annual salary (Work Institute, Retention Report, 2019). For a 100-person team averaging $100K, each departure costs about $25,000. If improving inclusion reduces turnover by 8 people per year, that saves about $200,000 annually.
  
  
• Attracting Talent: 2 in 5 candidates have declined roles due to a perceived lack of inclusion (McKinsey, Race in the Workplace Report, 2021). 39% of employees would leave their current job for a more inclusive organization (Deloitte, Unleashing the Power of Inclusion, 2020).
  
  

For fund managers, these motivators add up to one clear conclusion: diverse pipelines aren’t just the right thing—they’re a competitive edge.

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The Role of Diverse Fund Managers

While diverse fund managers remain only 15% of the total in Canada, their presence is rising—and reshaping how capital flows.

Diverse managers are proving that inclusivity and sustainability are not simply values, but strategies for outsized returns and lasting impact. 

By doing so, they are:

• Opening doors for overlooked founders and untapped markets.
• Building networks of trust with communities historically excluded from venture.
• Expanding the definition of success to include financial, social, and environmental returns.

The growth of diverse fund managers isn’t just good for equity—it’s essential for Canada’s global competitiveness and economic resilience.

As Pocket Sun, Co-Founder & Managing Partner of SoGal Ventures, explains on 500: “In the world of venture capital, diversity isn't just a buzzword—it's the key to unlocking innovation and driving real change. I've seen firsthand the transformative power of investing in underrepresented founders and overlooked markets. Every dollar invested is a vote for a more inclusive future, where talent knows no boundaries. Let's rewrite the narrative of entrepreneurship, one investment at a time.”

‍Practical Pathways for Emerging Managers: How to Access & Engage Diverse Founders

For emerging fund managers, conviction isn’t enough – you need to demonstrate practical ways to translate inclusive intent into deal flow and portfolio value. Based on what we’ve seen work across Canada’s ecosystem, here are several actionable pathways to begin building more diverse pipelines:

1. Expand Deal Sourcing Beyond Your Usual Networks

Diverse founders often sit outside the “warm intro” loops of mainstream venture, and disproportionately build in sectors tied to lived experience and systemic gaps, including: health innovation, community infrastructure, education, food systems, and climate solutions. Understanding these focus areas helps fund managers tune their sourcing lens to opportunities often missed by traditional venture. 

• Partner with ecosystem hubs (immigrant-serving orgs, women-focused accelerators, Indigenous incubators).
• Sponsor or participate in pitch events that deliberately spotlight underrepresented founders.
• Share open calls for funding on platforms where overlooked communities gather (LinkedIn groups, newcomer entrepreneur associations, women in tech forums).
  
  

2. Rework Your Diligence Lens and reframe how you assess potential

Traditional diligence filters can unintentionally exclude diverse teams. Look beyond pedigree and early revenue indicators. Many diverse founders operate leaner than their peers, not out of preference but necessity. Historic barriers to capital have forced them to stretch resources, validate business models faster, and build traction with less. For investors, this often signals disciplined capital efficiency and resilience – qualities that can strengthen long-term portfolio performance.

• Assess resilience, lived experience, and community traction alongside traditional metrics.
• Recognize that systemic barriers often mean thinner networks or early revenue — don’t mistake that for lower potential.
  
  

3. Build Trust Before Transactions

Relationships drive capital allocation. Show up in community spaces consistently, not only when you’re raising or deploying. 

• Show up to community events without an immediate ask.
• Offer office hours, mentorship, or feedback sessions — small investments that establish credibility.
• Create transparent, accessible application processes (plain language, fewer “gatekeeper” steps).
  
  

4. Embed Inclusion Into Portfolio Support

The work doesn’t begin or end at the cheque. Inclusive fund managers build founder success systems that go beyond capital:

• Focus on providing tangible value-add, such as providing founders with customer intros, peer support, and wellness resources.
• Recognize cultural differences in leadership styles and communication, and adapt accordingly.
• Celebrate wins publicly to expand visibility for overlooked founders.

Ecosystem Momentum: Policy, Industry & Global Alignment

In recent years, Canada has led with a wave of initiatives embedding diversity into venture capital—from policy to industry to institutional capital.:

• Federal Government Programs – now include WES (Women Entrepreneurship Strategy) with targeted loan, ecosystem, and knowledge funds, the Venture Capital Catalyst Initiative (VCCI) prioritizing underrepresented managers, the Black Entrepreneurship Strategy loan fund, the 2SLGBTQI+ Entrepreneurship Program. Separately, Employment and Social Development Canada (ESDC) has federally backed the Social Innovation and Social Finance Strategy which includes the Social Finance Fund (SFF) funding through funds-of-funds such as Boann Social Impact, Realize Capital Partners, and CAP Finance; embedding DEI into with equity lens requirements (35% minimum to equity-seeking groups (SELI), 15% gender-lens (GLI)).
• BDC Capital is mobilizing institutional capital toward inclusive and sustainable ventures. Part of the BDC commitment to Inclusive growth, BDC Thrive Lab for Women is an innovative extension of the Thrive Fund and it focuses on leveraging partners to invest in and support diverse founders. Audaxa Ventures is among the investment partners.
• Canadian Venture Capital and Private Equity Association (CVCA) – has advanced inclusion with programs like Women Venture Forward and the Diversity Internship Program, supported by the Women Entrepreneurship Strategy (WES). For the first time, there is an industry standard for parental leave in the sector.
• Canada51 Hub – More than a database, this is an example of collaborative initiatives that emerge - a compilation of angel groups and venture funds committed to investing in diverse founders. 

These are important first steps—but they are still early.

This isn’t just a social question—it’s an economic one. Other global markets are moving fast to align capital with diversity because they see it as a driver of competitiveness, trade, and long-term economic development. To lead globally, we must continue to invest in the infrastructure that allows diverse fund managers and founders to scale solutions, attract international capital, and grow the next generation of globally competitive companies.

The Case for Diversity in Capital

Venture capital has long been driven by pattern recognition, with funding often flowing to founders who fit a familiar mold. The result? Vast pools of overlooked talent and undercapitalized innovations, particularly from women, Black, Indigenous, newcomer, and other underrepresented founders. 

Research consistently shows that diverse teams outperform. Funds with diverse managers are more likely to back diverse founders, who in turn are more likely to create breakthrough innovations. This is especially true in sectors like climate and health, where inclusive, sustainable solutions are both urgent and investable.

Inclusive Capital = Competitive Advantage

Canada has a unique opportunity. By aligning capital with inclusivity, we can:

• Unlock outsized returns: Diverse fund managers and founders are reshaping the venture landscape, delivering stronger risk-adjusted returns while tackling pressing global challenges.
  
  
• Foster system-level resilience: Inclusive innovation at the intersection of climate and health builds stronger communities, better health outcomes, and environmental resilience.
  
  
• Address brain drain: By building equity-centered infrastructure, Canada can retain top talent and reverse the flow of innovators seeking capital elsewhere.
  
  
• Scale global impact: Aligning growth with impact ensures that capital fuels companies solving not just for profit, but for people and the planet.
  
  

What We’ve Learned from the Field

At Audaxa, we’ve invested in women and non-binary founders leading early-stage tech innovations in health and climate. Their ability to identify overlooked opportunities, build trusted communities, and disrupt entrenched systems demonstrates why diversity isn’t just “nice to have”—it’s a competitive edge.

Our collaboration with Platform Calgary further reinforces this: when ecosystem builders, fund managers, and founders come together with a commitment to equity, we unlock pathways that benefit the entire economy.

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LPs & Funds with Diversity Mandates

A growing number of LPs and fund-of-funds are embedding diversity and impact into their mandates:

• InBC Investment Corp. – Invests in funds that align with one or more impact objectives and actively measure impact. InBC’s portfolio includes Pender Ventures, Brightspark, Vanedge, Active Impact, Raven Indigenous Capital Partners.
  
  
• Fondaction – Focused on equity, reconciliation, and long-term social benefit.
  
  
• Social Finance Intermediaries – Catalytic actors like Realize Capital Partners, Boann Social Impact, and CAP Finance are anchoring funds serving diverse communities while driving social and environmental impacts.
  
  
• Inovia Capital – Embedding ESG and DEI across its portfolio.
  
  

Bright Spots: Fund Managers Leading the Way

Across Canada, diverse fund managers are already proving what’s possible - it’s a strategic advantage for returns, resilience, and global competitiveness:

• BKR Capital 
• StandUp Ventures 
• Misfits 
• Migr8 Capital 
• The51 
• Sandpiper Ventures 
• Spring Impact Capital 
• Audaxa Ventures 
• MapleBridge Ventures
• Tribe Ventures 
• Citadelle Capital 
• AgeTech Capital 
• Front Row Ventures 
• Novacap 
• League of Innovators 
• Capital M 
• Phoenix Fire (Archangel Network)

These funds demonstrate that diversity is not a tradeoff—it’s a strategy for stronger portfolios, healthier ecosystems, and better returns.

Closing Reflection

Diversity is not an add-on to the venture model. It is not philanthropy. It’s smart investing - the core to building the next generation of high-performing funds in Canada.

For emerging managers, the evidence is overwhelming:

• The data proves diverse companies outperform.
  
  
• The policy environment is beginning to create enabling conditions.
  
  
• The market is rewarding inclusive, purpose-driven companies.
  
  
• The bright spots already show what’s possible.

The message is clear: diversity isn’t just the right thing to do - it’s the smart thing to do.

LPs, policymakers, and industry leaders must back these new voices. By doing so, we not only deliver better financial returns but also create an economy that reflects and serves the society we live in.

Diversity matters because talent is universal, but opportunity is not. The future of venture capital depends on closing that gap.

Both Audaxa and Platform Calgary are committed to keeping these conversations active, sharing lessons learned, and building tools that support the next generation of fund managers to lead with clarity, inclusivity, and impact.

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About Platform Calgary and the National Bank Investor Hub

Platform Calgary is a non-profit, community based organization with a mandate to bring together the resources of Calgary's tech ecosystem to help startups launch and grow at every step of their journey, from ideation to scale. The National Bank Investor Hub at Platform Calgary is a dedicated space designed to bridge the gap between investors and Calgary’s high-potential startups, accelerating growth and innovation. Through this strategic initiative, we foster faster connections between investors, founders, and capital, driving Calgary’s tech ecosystem forward. 

About Audaxa Ventures

Audaxa Ventures is a women-led venture capital fund backing the most promising technology solutions at the intersection of climate and health. 

We prioritize investments that not only improve the world and our communities but also provide our portfolio companies with the market access needed to expand their ventures and foster growth. We focus on women and non-binary founders who bring lived experience, diversity of thought, and bold approaches to solving some of society’s most urgent challenges. With a commitment of impact-driven capital, we prioritize return on impact alongside financial performance — supporting founders who are building companies that deliver measurable outcomes for people and the planet.

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