Article by Maryam Mazraei
I recently visited Silicon Valley as part of my Technology Entrepreneurship Masters at UCL to meet various technology firms and VCs. I was blown away by the American enthusiasm and approach to start-ups, but also left feeling concerned by the striking societal divide. The city is home to some of the largest, innovative companies but much is to be said on their contribution to the people in the city who are either homeless or struggling to make ends meet.
I started looking more into social impact investing and the genuine change technology can have on the more vulnerable members in our society. Turning my attention back home, throughout the UK we are also seeing an increase in poverty with a striking rise in homelessness and many being driven out of their homes due to rising housing costs. Not only does this include the high rise in rental accommodation costs but also all necessities that come with it such as energy, insurance and day to day spendings on food and transportation. This brings me to my current role as an Investment Associate at Ascension Ventures focusing on their social impact fund called Fair By Design.
The Fair By Design Fund invests in early-stage technology businesses and social enterprises tackling the Poverty Premium. An estimated 14.3 million people (22% of the population) in the UK are living in poverty (source: Bristol University Report). People in poverty or on low incomes often pay more for the same products or services than those better off financially. This is the “Poverty Premium”, the extra costs of being poor.
The Fair By Design Fund is a £10m fund and so far we have invested in pioneering entrepreneurs and start-ups that find fairer ways to serve low-income consumers, tackling Premiums in key sectors such as financial services, energy, insurance, food/household goods and transportation. See our current portfolio companies here.
I have also been on the other side of the table as a founder in the past, understanding the difficulties of fundraising whilst running a business. The 2019 Diversity VC report states that ‘Just 8% of UK VCs know what it’s like to work at a start-up. Far more have been bankers or consultants.’ Hence why I recommend ex-founders to consider working at a Venture Capital at some point in their careers. The level of on-the-job learning is exceptionally satisfying and you still get to stretch your entrepreneurial muscles when having to spot the winning players.
I am thrilled to be working with such a strong and focused team and I believe, through our efforts in social impact investing, we can once and for all end the Poverty Premium in the UK and continue to lead a standard to inspire others to do the same for their local communities.
If your start-up is directly or indirectly targeting those from low-income households, don’t hesitate to send me your pitch deck: [email protected].
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