The Opportunity Cost of Ignoring Diversity
Why Diversity in Founding Teams Makes Sense Not Just Morally, But Also Economically
What happens when the same perspectives repeatedly try to solve problems they helped create? This question doesn’t just apply to politics or large corporations — it strikes right at the heart of the startup sector. Even in impact startups, companies that develop solutions for social, environmental, or societal challenges, there’s often a lack of genuine diversity in founding teams. And this is more than a moral failing. It’s an economic risk.
When we talk about diversity here, it’s not just about gender. It’s about social background, cultural heritage, ethnicity, neurodiversity, life realities beyond the urban middle class, but also about different academic disciplines, thinking styles, and entrepreneurial biographies. In founding teams that want to solve complex problems, this diversity is a fundamental prerequisite. Because a team shaped by similar values, experiences, and networks makes decisions within a limited echo chamber. This leads to blind spots in areas like target groups, product design, or scaling strategies.
The price of lacking diversity is high: missed market opportunities, innovation deficits, declining relevance, and in the long term, even loss of trust among stakeholders. Studies show that diverse founding teams are on average more successful — both in terms of financing and growth. McKinsey, for example, points out in its analysis Diversity Wins [1] that companies with high diversity in leadership have a significantly higher probability of above-average profitability. In the startup sector as well, a BCG report shows: Startups [2] with diverse founding teams achieve on average 75% higher revenue per invested dollar.
Lacking diversity in impact startups is not a marginal issue. It causes real opportunity costs — economically, strategically, and societally. Anyone who wants to create systemic impact as an investor, accelerator, or incubator cannot avoid the question of diversity. Not because it sounds good, but because it works better.
Diversity as an Innovation Engine
Impact startups often face particularly complex challenges: They want to be not only economically viable, but simultaneously solve social and environmental problems. This requires a high degree of problem-solving competence, and that doesn’t emerge in an ivory tower, but through the exchange of different perspectives.
The more diversely a founding team is composed, the broader its horizon of experience and the greater the chance of recognizing blind spots early on. Anyone who wants to fight poverty without ever having lived in financial insecurity risks developing a product that misses the mark. Anyone who wants to promote inclusion but has never been confronted with barriers often remains on the surface.
One-sidedness leads, in the worst case, to new inequalities or creates them. When, for example, digital health solutions are designed only by urban, highly educated teams, they frequently overlook structural barriers such as digital access in rural areas, language barriers, or culturally influenced health concepts. The aspiration to create impact then unintentionally tips into exclusion. Particularly in the impact sector, diversity is therefore also a corrective against the unintended reproduction of power asymmetries.
Diverse teams bring different cultural influences, communication styles, problem-solving strategies, and mental models, which typically leads to more well-founded and creative decisions. Research supports this intuition:
A Harvard Business Review study [3] demonstrates that teams with cognitive diversity — that is, differences in perspectives and ways of thinking — can accomplish tasks in the problem-solving process significantly faster. And the previously cited McKinsey report [1] also shows that companies with more ethnic and cultural diversity at the leadership level have a 33% higher probability of being above-average profitable.
For impact startups, this means: Diversity is not a social add-on, but a crucial strategic resource. Especially where the problems to be solved encompass many dimensions and affected parties.
Market Knowledge Begins with Human Knowledge
A product that wants to create social impact must understand the reality of its target groups, not just model it. In a world where markets are culturally, socially, and demographically diverse, it’s a strategic risk when founding teams come exclusively from similar socioeconomic backgrounds. Representation is not a marketing argument, but a key to user-centricity. Diversely composed teams are demonstrably better at identifying needs that lie outside their own sphere of experience — and that’s exactly where the greatest innovation potential often emerges.
It’s not just about empathy, but about access. People from underrepresented groups don’t just bring new perspectives, but often also networks that remain closed to others — whether in migrant communities, in rural areas, or in social milieus that traditional founding teams can barely reach. This is particularly relevant for impact startups that want to address systemic problems. Anyone dealing with educational equity, healthcare, or social housing must not only analyze target groups but be able to think within their lived reality. Diversity in the team is thus a strategic advantage in product development, sales, and impact measurement.
According to McKinsey’s analysis [1], companies with above-average diverse leadership teams also perform significantly better in financial performance, even in smaller, innovation-driven firms. The study shows that companies in the top diversity quartile had a 36% higher probability of being above-average profitable compared to the bottom quartile.
These insights can be transferred to impact startups: Diversity is not only socially desirable but a hard success factor for market access, for product-market fit, and ultimately for scaling. Anyone who wants to serve real markets should also have real people on their team.
Groupthink is Comfortable — But Dangerous
In homogeneous teams, many things run smoothly. Decisions meet little resistance, consensus is quickly established. But this apparent efficiency harbors a dangerous weakness: groupthink. When similar backgrounds, ways of thinking, and values converge, the critical view of blind spots is often missing — and that’s exactly what makes young companies vulnerable. In complex, volatile markets — as impact startups often address — this is fatal. Diversity acts here like an early warning system: Different perspectives bring friction — and this friction is productive.
A diverse founding team asks more and different questions. Those who weren’t socialized with the same assumptions question dominant narratives, oversimplifications, or naive optimisms more quickly. Especially in the early phase of a startup, this can be decisive for recognizing market distortions, identifying risk factors early, and not losing oneself in wishful thinking. Research shows that heterogeneous teams systematically achieve better results in forecasts and decisions, particularly under uncertainty. A meta-analysis by Harvard Business Review [4] confirms: Diversity in teams promotes more robust decision-making processes and reduces the risk of strategic misjudgments.
Beyond the strategic dimension, a psychological effect comes into play: Diversity increases team resilience. Different experiences in dealing with uncertainty, failure, or resource scarcity make teams more adaptable — not just individually, but as a collective. Those who have learned to navigate in adverse contexts bring this strength into the company. Especially in impact-oriented markets, where business models are often experimental and impact is difficult to measure, this form of resilience is an underestimated competitive advantage. Diversity helps to persevere long-term and not falter at the first headwind.
What You Don’t Look For, You Won’t Find
Innovations rarely emerge where everyone thinks alike. And yet many investors and funding programs continue to rely on familiar résumés, trusted patterns, and established networks. The problem: This very comfort zone prevents access to the founders who solve problems that others don’t even see, let alone understand. Those who grew up in underserved markets, for example, recognize systemic weaknesses faster and develop solutions that address real needs and not just technological gimmicks for oversaturated milieus.
Especially in the impact sector, it’s about real challenges in education, health, supply, or climate adaptation. Founders with unconventional biographies don’t just bring different perspectives, but also a deeper proximity to the communities that truly need these solutions. They don’t think from the business model canvas outward, but from the problem inward. The result: Products and services that are actually used and don’t remain stuck in the prototype stage because they were planned past the lived reality.
This innovation power is not only morally desirable but economically demonstrable: The Boston Consulting Group study [2] shows that companies with above-average diverse management teams generate 19% more revenue through innovation than their less diverse competitors. McKinsey [1] came to a similar conclusion: Companies in the top diversity quartile have a 36% higher probability of being above-average profitable.
When funding institutions and early-stage investors repeatedly bet on similar founder types, they not only reproduce existing inequalities, they also forfeit economic potential. The costs of looking away are high: unrecognized talents, missed innovation opportunities, and stagnating portfolios. Those who only look for yesterday’s patterns cannot find tomorrow’s solutions.
New Programs, Old Reflexes
The startup world likes to present itself as innovative. And yet many selection processes follow surprisingly conservative patterns. Whether in accelerators, early-stage investments, or other funding programs: Those who don’t pitch eloquently, speak buzzwords fluently, and present a Silicon Valley-style CV are often filtered out before their idea is even understood. The effect: New programs emerge with old outcomes — supposedly open, but actually exclusive.
The barriers work subtly but systemically. Language, presentation formats, and selection criteria favor founders who fit the familiar founder ideal: young, academic, Western-socialized. Access to capital, mentoring, or media presence is often an uphill battle for other groups. Particularly affected are people with migration backgrounds, women of color, non-academics, or neurodivergent founders. Studies prove: Teams with purely male founders receive around 90% of venture capital in Europe [5].
Many actors in the startup ecosystem see themselves as pioneers for social and economic transformation. But when they structurally promote the same founding profiles again and again, they undermine their own aspirations. They risk not only overlooking relevant market potential but also missing a central part of their social mission: enabling new economic participation and promoting diverse problem-solving competence.
The greatest strategic danger lies not in a failed project, but in an ecosystem that perpetuates the wrong standards: When diversity is demanded but not promoted. When innovation capacity is measured primarily by how well someone performs in a pitch deck and not by how effective the solution is in everyday life. And when programs write diversity into their communication but don’t build it into their decision criteria. Diversity doesn’t begin with quotas, but with the question of who becomes visible at all.
Impact Without Inclusion is Greenwashing by Other Means
More and more funds, accelerators, and state-funded programs are positioning themselves as part of the “Impact Economy.” But what happens when diversity plays no measurable role in this? Then “Diversity & Inclusion” often remains a fig leaf: attractive in the annual report, irrelevant in practice. For stakeholders who increasingly focus on transparency and value orientation, this becomes a risk. The impact concept loses its edge when it’s not consistently maintained.
Credibility in the impact sector means consistently following through on principles: in selection processes, evaluation logic, team compositions, and the composition of panels, jury boards, or advisory boards. This is exactly where things often fall short. A program may present itself progressively on its website, but when the same five VCs judge the same founder profile again, the entire format loses persuasive power.
This is not just a moral problem, but an economic one. Anyone who wants to credibly appear as an impact-oriented player in an increasingly complex market must be able to show that diversity is not just mentioned but systematically promoted — for example, through training, through criteria, through feedback systems. Especially funding providers and LPs increasingly pay attention to this coherence [6].
Institutional capital providers, foundations, or public funding bodies are increasingly beginning to integrate diversity and inclusion practices into their funding allocation. For example, EU funding programs and some national impact financing initiatives increasingly demand strategic clarity on diversity and inclusion measures, even though concrete reporting requirements like ESG criteria are rarely bindingly regulated so far. Those who cannot deliver here lose not only access to capital but also the trust of central stakeholder groups.
In the end, it becomes clear: Credibility is not created through labels, but through decisions. Those who don’t take diversity seriously in their own house won’t be able to credibly represent it externally either. Programs and funds that want to create real impact must not only demand diversity but live it themselves: structurally, methodically, visibly. Everything else is well-intentioned window dressing.
How Diversity Begins with the Pipeline
When the same people are always invited, it’s not surprising that the same people are always funded in the end. The key to more diversity in the impact ecosystem therefore lies not only in the final selection, but already in the design of processes and particularly in upstream pipeline work.
A central lever is bias-sensitive scoring models. Instead of supposedly objective criteria like “pitch performance” or “serial entrepreneur” status, which are heavily influenced by cultural capital, we need models that consciously include different experiential worlds. Initial approaches can be found, for example, in the Diversity VC Standard [7], which offers concrete benchmarks for VCs to structurally integrate diversity into investment decisions. UKRI also shows with the Inclusive Innovation Award [8] how funding institutions can explicitly anchor diversity criteria as an innovation factor.
But it’s not enough to evaluate applications fairly. What’s crucial is who feels addressed at all. Funding programs and investors must specifically reach out to underrepresented communities — for example, through collaborations with migrant entrepreneur networks, first-generation communities, or local educational initiatives. Outreach is not marketing, but strategic access building. An example: The Inclusive Entrepreneurship program by Social Impact specifically supports founders with refugee and migration experience or disabilities through local networking, language support, and accompanying educational offerings.
The design of programs, calls for proposals, and information materials also plays a role. Complex language, academic vocabulary, or legally influenced application processes have an excluding effect — particularly on founders without institutional support. Nesta’s Inclusive Entrepreneurship Report [9] shows how language and design can be made more inclusive — for example, through visual application formats or peer support mechanisms.
Diversity cannot be promoted into existence — it emerges where trust grows. Anyone who truly wants diversity in the entrepreneur ecosystem must develop selection processes from transactional moments to relationship cultivation. The central question is not: “Who is capable of applying?” but “Who feels invited to be part of the system at all?”
Strategically Diversifying Portfolios and Cohorts
Diversity in founding teams doesn’t emerge by itself either. It needs strategic objectives, clear incentives, and visible accountability. Programs and investors who invoke impact should therefore understand diversity not as a secondary goal, but as a central prerequisite for innovation, team dynamics, and market proximity.
Diversity in teams means more than different backgrounds. It encompasses different thinking and decision-making styles, perspectives on user needs, and access to markets. Especially in impact startups that want to solve complex social problems, a broad spectrum of experiences is essential, as described, to avoid blind spots.
Many accelerators and incubators rely on chance or individual lighthouse projects instead of working with concrete diversity goals for their cohorts. Target values, e.g., 40% female founders, 25% migrant backgrounds, 30% non-academic educational biographies, help make unconscious patterns in the selection process visible. Founders Factory Africa or Atomico [10] show how targeted funding lines for underrepresented founders expand successful portfolios — without compromising on quality.
Investors can also systematically build diversity into their decision logic — for example, as a fixed component of impact scores. Initial impact funds like Bethnal Green Ventures or the Fund for Global Human Rights consider social team diversity in the investment process, not just as an ESG criterion, but as a central lever for impact capability and resilience. The Diversity VC Initiative offers standardized frameworks for this that can be transferred to portfolio evaluation and reporting.
A diverse team structure ensures not only representation but also productive friction: for perspective changes, for discussions beyond the bubble, and thus for more robust decisions. Anyone who strategically diversifies cohorts or portfolios is not choosing niceness, but future viability through diversity.
Real Diversity Requires New Architectures
The challenges of our time, from social justice to technological transformation, are too complex to be tackled repeatedly with the same networks, ways of thinking, and structures. Diversity cannot be “manufactured” through isolated initiatives, but emerges through long-term, structural work. This is exactly where one of the central leverage points lies for actors in the startup ecosystem: Those who shape programs, partnerships, and networks today help decide who will have access to capital, publicity, and opportunities tomorrow.
Many funding structures follow a one-way street model: programs for certain target groups, conceived by actors without involving these groups. But real diversity begins in the creation process through co-design with affected communities. This means not only addressing representatives of marginalized groups as participants, but including them as co-creators on equal footing. Studies from participatory innovation research show that programs developed together with their target groups have more sustainable impact and deliver more relevant results.
One of the greatest invisibilities in the startup ecosystem lies in access. Those who are in the “right” networks get recommendations, visibility, and capital. Those who don’t belong are systematically overlooked despite their potential. The key to more diversity therefore lies in long-term, trust-based partnerships with organizations that are anchored in underrepresented communities. Programs like Diverse Founders Network Denmark or Black and Brown Founders show how such partnerships emerge: not through one-sided outreach campaigns, but through continuous collaboration, shared responsibility, and mutual recognition.
One of the central tools for strengthening founding teams and amplifying new voices is mentoring. But not every mentoring approach brings real effectiveness. Often it remains at the level of non-committal exchange or general advice. At COSMICGOLD, we consciously embrace a different understanding: For us, mentors are not merely companions on the sidelines, but strategic sparring partners on equal footing. They don’t just contribute expertise, but help founding teams recognize blind spots, activate relevant networks, and work specifically on strategic and operational levers.
What’s important to us: Appreciation applies to all sides — explicitly including our mentors. We don’t expect pro-bono services, but are currently developing an innovative Mosaic Mentoring model that understands mentoring as a mutual learning and development space. Mentors benefit from exchange with other experts, gain access to new subject areas, and their time and expertise is symbolically honored: through a mentor fee that can optionally be donated or contributed to a support fund for our portfolios. This creates a framework where knowledge is not only passed on, but jointly developedand mentoring becomes a real lever for diversity, impact, and strategic excellence.
Because it’s not enough to integrate more “diverse founders” into existing programs. The infrastructure must change: Who has access, who defines what quality is, who evaluates, and who networks. This includes diversely composed selection committees, transparent decision processes, fair access to media and capital, alternative pitch formats, or community-based funding models. Venture capitalists like Unconventional Ventures show how this works and what emerges when structures are fundamentally rethought. Because in the end: Only those who change the infrastructure change the outcome. Everything else remains piecework.
Conclusion: Diversity is an Economic Factor — Not a Moral Add-on
Impact-oriented startups want to solve societal challenges. But those who exclude central perspectives in doing so risk not only their credibility but miss their target. Diversity is not an optional addition, but a fundamental prerequisite for real impact. Without it, impact becomes mere assertion. This affects not only founding teams, but also the funding logic of accelerators, incubators, and investors. Those who structurally think alike and select alike reinforce existing imbalances — and thus lose the chance for real transformation.
The innovation advantages of diverse teams are well documented: They think more broadly, recognize new market opportunities early, and develop solutions that are closer to the reality of different target groups. Studies by McKinsey, BCG, or Harvard Business Review repeatedly show: Diversity correlates with economic success. Companies that strategically use diversity are not only more resilient, but more frequently lead in growth and profitability.
Many strategic partners in startup funding talk about diversity, few act systemically. Yet diversity cannot be delegated “downward,” it must be actively shaped: through new selection criteria, conscious portfolio management, long-term partnerships with underrepresented milieus, and an honest understanding of shared responsibility. This is not a short-term communication advantage, but an investment in future viability.
The good news: Change is feasible and it begins with the central levers in the ecosystem. Those who are ready to question blind spots, tap into new networks, and live diversity as a strategic principle not only gain access to new markets, but also strengthen their own legitimacy. The invitation stands: Diversity is not a risk. It is the greatest untapped resource in the innovation landscape.
Sources:
[1] https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-wins-how-inclusion-matters
[2] https://www.bcg.com/publications/2018/how-diverse-leadership-teams-boost-innovation
[3] https://hbr.org/2017/03/teams-solve-problems-faster-when-theyre-more-cognitively-diverse
[4] https://hbr.org/2016/11/why-diverse-teams-are-smarter
[5] https://eic.ec.europa.eu/system/files/2022-05/EIC%20report%20presentation.pdf
[6] https://www.impactprinciples.org/common-and-emerging-practices/principle1/
[7] https://diversity.vc/diversity-vc-standard/
[8] https://www.ukri.org/opportunity/inclusive-innovation-award-2022-to-2023/
[9] https://www.nesta.org.uk/report/how-inclusive-innovation-policy/
[10] https://atomico.com/insights/our-commitment-to-building-a-more-diverse-and-inclusive-european-technology-ecosystem
