To shed light on the state of diversity in the digital health startup ecosystem, Rock Health launched a new Diversity in Digital Health initiative. The project builds on Rock Health’s annual research into gender equity and now also includes analysis of the racial and ethnic makeup of startup leaders within the sector.
“This year, we specifically wanted to look at—when we start to think about the digital health teams building product, what does their composition look like in terms of race, ethnicity, gender [and] sexual orientation?” Rock Health Chief Operating Officer Megan Zweig told us. “So, we put out a more expansive survey.”
In “Prioritizing Diversity and Striving for Greater Representation,” the second video in Fenwick’s “Digital Health Trends Shaping 2021” series, Megan and I examine diversity within the digital health investment pipeline, where venture capital is actually flowing, and what it means to build digital health technology for everyone.
In the video, Megan outlines a few of Rock Health’s interesting finds:
- Most of the founder survey respondents are headquartered in the Western and Northeastern states of the U.S., while there are significantly fewer in the South and Midwest.
- The percentage of Black and Hispanic startup founders is much higher in the South and the Midwest compared to the West and Northeast.
- However, most capital is flowing to the coastal regions of the country.
- Asian American male startup founders are most likely to be venture-backed, while Black women founders are most likely to bootstrap.
- The data indicates an opportunity for investors to diversify their pipelines and portfolios.
“So, [all this data] does beg the question of, as investors: How are we diversifying our deal flow?” she asked. “How are we tapping into this talent that exists? If our data points to accessibility issues among certain populations, that’s a conversation we definitely hope our ecosystem has.”
Check out our video and read more detailed takeaways from my talk with Megan further down.
Highlights from Rock Health’s 2020 Diversity in Digital Health Report
Rock Health’s diversity report showcases findings from the 678 digital health startup leaders who completed its survey.
Below are a few notable results from Rock Health’s survey responses:
- Founder respondents reflected greater racial/ethnic diversity compared to other management positions.
- This information raises the question: How can companies and teams continue to create opportunities and utilize methods that help ensure diversity across all leadership levels?
- Regions with the most white and Asian founders have higher average deal sizes and receive the majority of digital health venture funding.
- This suggests that investors have an opportunity to diversify their pipelines and portfolios by tapping into other U.S. areas with promising startups that may be underfunded.
- When asked about roadblocks to building their companies, Black leader respondents rank access to capital and investors as larger barriers than do their White and Asian counterparts.
- These results: (1) support the notion that Black founders may face more challenges with obtaining capital compared to other founders; and (2) suggest that investors should strive to continue bridging this accessibility gap for underfunded diverse leaders.
To see more of Rock Health’s survey results, please download the full report.
Also check out the other videos in our series.