I have written about the cultural dysfunction in the venture capital industry before and, six years later, there have been some encouraging steps in the right direction. That said, we as an industry have a long way to go still. A few years ago, we decided to focus more intentionally on diversity and inclusion in our investment practice. Like many, we are appalled by the lack of capital and support for underrepresented founders and are eager to contribute as best we can to address this critical issue.
Over the last few years, we have co-founded and supported three major initiatives to improve diversity and inclusion in our innovation ecosystem:
- XFactor Ventures: a pre-seed fund focused on investing in female founders with billion-dollar ideas. My partner, Chip, co-founded the fund with our friend Anna Palmer (founder/CEO of Dough) and they recruited a team of twenty spectacular female CEOs to serve as the investment partners. One of the XFactor Ventures partners refers to her experience in XFactor as a master class in venture capital. Since inception a number of years ago, the fund has invested in over 40 female-founded startups.
- Hack.Diversity: a non-profit program to identify, support and train young engineers of color and help them secure jobs at the top innovation economy companies. Since inception a number of years ago, Hack.Diversity has helped nearly 200 fellows find jobs at 20 participating companies, resulting in an average increase in salary of $65,000. It is not unusual for the fellows to go from a minimum wage job as a dishwasher to a software engineering job paying $100,000 at firms like Drift, Hubspot, Rapid7 or Wayfair. Jody Rose of the NEVCA has been a terrific partner and leader in this work. Our recent impact report is here.
- Global EIR: a non-profit dedicated to helping immigrant entrepreneurs secure visas. Since inception a number of years ago, the program has had a 100% success rate in securing H1B visas across over 70 entrepreneurs. Those entrepreneurs have founded companies that now employ 1000 people and have raised over $500 million in venture capital. Brad Feld of Foundry Group has been a terrific partner in this endeavor as has Bill Brah at UMass Boston and Craig Montuori.
We are proud of these initiatives and continue to work hard to further their missions. At the same time, we know our core business of investing needs to evolve. We believe that diversity in thought and background is key to the success of our ecosystem as a whole as well as individual companies. In other words, we aspire to develop even more of an edge and reputation in backing diverse founders because we think it will yield better investments.
In the spirit of holding ourselves more accountable to this goal, we decided to highlight the underrepresented founders in our portfolio as part of the redesign of our website. Many firms allow you to sort their portfolio by sector or geography. We have added a category for “Underrepresented founders”, using the standard industry definition of those founders that belong to a group that the venture industry as a whole underinvests in relative to the percent of the overall US population. This definition includes founders that are women as well as people of color, including those of African, Latin American, or Native American descent.
We have a lot more work to do as individual partners, as a firm, and as an industry as a whole in this area. Hopefully, by providing a bit more visibility towards this work, we can continue to make steady progress. And we welcome any support or ideas to get engaged and help advance these initiatives.
Finally, if you know great founders we should be talking to, particularly underrepresented founders, please let us know!