Diversity flattens the playing field


I get asked all the time about why I chose to make women founders one of the centerpiece of my investment thesis. The answer is pretty simple. Nobody else could see what I saw that these women were building solid businesses and by investing in what nobody else could see is a win. I also make a concerted effort to invest in minorities who are building businesses that many of the investors on the other side of the table might not see as big possibilities. The downside is the businesses have to be super strong to get the next round of funding but now everyone has to be strong.

The important of diversity at any level is the key to changing the playing field. I am not convinced that the majority of investors who happen to be white men see a woman or a minority on the other side of the table decide not to invest because of that. Although when women end up being one of the partners in an investment firm the firm ends up investing in more female -led companies. In essence, there is obviously a comfort level of who the person is on the other side of the table.

I believe it is important to make a mental decision that as an investor I am going to try as hard as I can to invest in minorities and women. If I did not make that decision then my portfolio would probably look different. It might not be as good either.

Linkedin surveyed people who worked in venture capital firms as well as founders of start-ups with less than 100 people and there was one piece of information that I was surprised by. I know that the majority of firms don’t have women investors. I know that most female founders feel like the men on the other side of the table don’t understand their businesses and can’t connect to them. I know that there are almost zero initiatives inside firms to increase diversity in their own portfolio companies or their own offices. It is unfortunate because I believe it is important to push portfolio companies to work on diversity.

What was interesting to me is that when investors projected out what the next ten years would look like they estimated that 31% of their portfolio companies will have female founders and 34% of their portfolio companies will consist of racially diverse teams. It is too bad that they think it will take another ten years but what it is telling me is that the last ten years has made an impact. More women, more minorities on both sides of the tables. We will see a lot of the success of those seeds start to bloom in the next few years. That will be a big win for the next generation of women and minorities who it appears will be taking up about 35% of the table in the start-up community if you believe the stats.

I believe in those stats because I began working on that thesis a decade ago. Here are a few of those investments that are founded by women and/or minorities. Some are growing, employing people and are making changes in the vertical that they sit in and of course some have sold or haven’t made it or are not scaling as quickly but I made a concentrated effort to invest in all of these women below. I made that decision so that the next generation of girls and minorities can look to these founders and say I can do it because she did it. That’s how we build a new generation of diverse companies…we make a conscious effort.