Since Minneapolis police officers killed George Floyd in May and kicked off months of nationwide protests, the corporate world — including venture capitalists — have attempted to respond to the Black Lives Matter movement.
Indeed, many quickly took to social media to voice their support, broadcast their new diversity-focused networking groups and pledge to do better, particularly when it comes to finding and funding more Black founders and other underrepresented entrepreneurs.
It was tempting to dismiss it as so much hot air, given that VCs have talked about diversity for eons without doing much about it.
As of February 2020, according to a report by All Raise, an organization that promotes female founders, 65% of VC firms still had no female partners. As of 2018, 81% of venture firms still lacked a single Black investor, per an analysis by Equal Ventures partner Richard Kerby.
Those numbers are comparatively rosy when considering the percentage of women and Black investors in senior decision-making roles. According to recent PitchBook data, at the start of this year, just 12.4% of decision-makers at U.S. venture firms were women (up slightly from the 9.65% at the start of 2019). As for for the number of Black investors in senior positions, it has long hovered around just 2%.
But here’s the good news: While it remains an ongoing challenge to get these numbers in sync with other industries, there were two developments specifically in 2020 that may beget more action in 2021.
We’d first point to the decision this fall by Yale’s endowment to require its asset managers to do better when it comes to diversity. Specifically, the school’s $32 billion endowment — led since 1985 by investor David Swensen — told its 70 U.S. money managers that from here on out, they will be measured annually on their progress in increasing the diversity of their investment staff, from hiring to training to mentoring to their retention of women and minorities.