This post isn’t about sexism and harassment in the venture capital and technology industries, it’s about what funds can do to build diverse portfolios and cultivate inclusive communities to invest in the next generation of companies. It was originally posted in The Green Room by Amrit Richmond, CEO of CMYK Ventures.
There isn’t always a clear ROI on community for venture capital funds, at least not right away. The entrepreneurs, executives, advisors, co-investors, partners, talent, and friends your team connects with today, and connects with each other, will likely start and join new companies in 2–10 years. And the seed-stage companies you passed on, or didn’t have the chance to invest in yet, will be fundraising again in the future. The investors that are most helpful to an entrepreneur, regardless of an investment commitment, will be the investors they recommend to friends and pitch again in the future.
Building strong ecosystem relationships and inclusive communities today will give your fund a strategic advantage tomorrow that your portfolio, investment team, and greater community can all benefit from.
The funds that limit their community activities to just their portfolio, people who look like them, people who went to their school, or people who are networked enough to get a warm intro to pitch for investment are missing out on opportunities for deal flow, portfolio growth, insight, and inspiration.
Below is a list of programs and tactics I’ve seen or implemented in my six years in VC/tech, and inspired by the teams and work of Collaborative Fund, Backstage Capital, RRE Ventures, Female Founders Fund, Cowboy Ventures, and Kapor Capital. If your fund is interested in creating or participating in inclusive communities, or if you want to get a job opening at your fund in front of women and people of color, email me.
Treat All Entrepreneurs with Respect
Investing in women and underrepresented CEOs shouldn’t be lumped into your fund’s charity budget or an annual quota, it should be part of your investment thesis. Women are intelligent, creative, curious, scrappy, empathetic, and have access to insights, skills, talent, consumers/customers, and networks that the average white male entrepreneur might not possess.
Be authentic and transparent about your inclusivity efforts, and treat allentrepreneurs with the same level of respect. The way your fund treats people will be shared in backchannels, so make a good impression.
Build a Diverse Investment Team
Not only in genders and races, but in past companies, universities, skills, interests, passions, and perspectives.
Encourage your team to blog, use social media, and speak at events about your portfolio, investment thesis, their unique expertise, and opportunities for entrepreneurs to connect with your team. This helps your fund access a wider audience of entrepreneurs beyond your existing closed network.
Host Pitch Practice Events
Host small events for 2–5 female and underrepresented entrepreneurs to pitch investors at your office, with no requirement to make a deal on either side of the table. The goal here is to give entrepreneurs a safe space to practice their pitch in a board room like setting, get valuable feedback, and connect with investors who might invest or make intros to other investors. This is an event concept I’m happy to donate my time to help organize.
Recommend Inclusive Investors
Inspired by Aileen Lee of Cowboy Ventures and Female Founders Fund, keep a list of funds you respect and trust to refer to your portfolio and friends.
Invest (and Co-invest) with Female-Led Funds
Invest directly in female-led funds with your personal capital, or make introductions to potential limited partners for these new, diverse funds. I know of two funds raising right now with incredible portfolios and deal flow that focus on investing in women and underrepresented entrepreneurs.
Example: Albert Wenger and Susan Danziger are LPs in Female Founders Fund and Lattice Ventures
Give Women a Seat (and Voice) at the Table
Hiring women at your fund isn’t enough, you must give them a seat and voice at the table. As us what we think about potential investments, especially if we previously worked in an industry or company relevant to the deal. When possible, give women on your investment team the chance to join your Partners in board meetings and pitches with entrepreneurs.
While women have obvious insight into what women buy, like, eat, and consume, we’re also smart about a lot of other industries and demographics. Give women on your investment team the opportunity to take deep dives into an industry/thesis of interest and present their findings to the team.
Host Office Hours
Set aside time each month for your team to meet and share feedback with entrepreneurs who may not have access to your team otherwise. Like I said earlier, you’re missing out on opportunities if your office door is closed.
Example: TechCrunch Include Office Hours with General Catalyst
Build a Talent Pipeline
Your fund doesn’t need a Head of Talent to start building a talent pipeline. Look at the patterns of what kind of talent your portfolio companies need the most. Maybe CMO, CTO, CRO, designers, marketers? Then assign someone on your team to build lists of the top women in those fields and cities relevant to your portfolio. These lists are invaluable to your portfolio CEOs, especially for companies that can’t justify the cost of a recruiter.
Keep a list of female executives in your portfolio and ecosystem to recommend when a board seat becomes available.
Setup a form on your site to collect resumes from talent interested in joining the companies you invest in, then refer to that talent pool when one of your companies is hiring. Make sure to get permission before sharing resumes.
When you host public or semi-public events, invite talent from your lists above to start meeting talent before they decide to switch jobs.
And if your portfolio companies want to get their job openings in front of 15,000+ women in tech, place a job listing with the Tech Ladies community.
Create a Fellowship or Internship Program
Invite female and POC students and recent grads to apprentice with your investment team, and/or pair up students with your portfolio companies.
Examples: Omidyar Ventures’ Internship Program, True Ventures’ True Entrepreneur Corps, and Learn Capital’s Fellowship Program
Support Inclusive Communities & Organizations
Partner with technology organizations like Girls Who Code, Black Girls Code, Code2040, and the Kapor Center for Social Impact. Sponsor their events and programs, mentor their students, alumni, and communities, and invite your portfolios to participate in your efforts.
Sponsor a Scholarship
Partner with a local university or engineering programs like Flatiron School to offer women and people of color scholarships to learn how to code.
Giveaway Business Books
Backstage Capital created a program called Cover to help aspiring entrepreneurs and investors — regardless of income, location, or profile — have access to invaluable startup-related books.
Teach Classes For Entrepreneurs
Invite anyone in your fund’s community to learn something from your team, for free, like the class Steve Schlafman, Principal at RRE Ventures, teaches in New York on How to Raise a Seed Round.
Create a Scout Program
Create an army of ambassadors (portfolio CEOs, execs, and friends of your fund) to scout startups led by women and underrepresented entrepreneurs.
Collaborate with Other Funds
Partner with funds and investors in your network on your inclusive events, content, programs, and classes.
Events & Experiences
Invite women and underrepresented entrepreneurs, executives, and talent to be panelists and speakers at your meetups, founder summits, and annual meetings. Invite us to speak about things other than our gender or race. My friend Sandi created the 50/50 Pledge to help you find speakers for your next tech event.
Guests at your event should leave feeling more inspired than when they arrived, ideally having learned something new or made a new connection. Design opportunities for guests to authentically connect with each other.
Limit the amount of alcohol at your events, allowing people to connect and focus on the speakers or special guests. You’re doing community wrong if the bar is the highlight of your party.
- HBR: Male and Female Entrepreneurs Get Asked Different Questions by VCs — and It Affects How Much Funding They Get
- Project Include’s recommendations for creating inclusive work cultures
- Kapor Capital’s Founders’ Commitment
- A template for investor/founder sexual harassment policies
- VC Aileen Lee’s advice to female founders looking for funding
- Predatory Venture Investing: How LPs Can Help Make it Stop, by Kara Nortman, Partner at Upfront Ventures
- The Human Rights of Women Entrepreneurs, by Reid Hoffman, Partner at Greylock and co-founder of LinkedIn
- Shai Goldman, Managing Director of SVB Capital, on LPs and Diversity
About Green Room
Welcome to the Green Room blog. Go behind the scenes at Backstage Capital, where we’re betting big on underrepresented tech startup founders.