Lack of Diversity in the Venture Capital World
I have been conducting some informal research over the last couple of weeks on Venture Capitalists to get as familiar with their culture and investigate some of the companies that are under their umbrella. While I am impressed with their portfolio’s and the level of innovation that exist, I was also very surprised at the lack of diversity that work for some of these VC firms. Across the board diversity is lacking in new tech start-ups and at the firms that ultimately decide to invest in new ventures. While I was aware of the lack of diversity, I am shocked that out of the top 100 VC firms that there were only a handful of minorities that were apart of their teams. Drew Houston, who is the co-founder of Dropbox has said, “You can’t make it 10 times better in 10 minutes,” Houston said in an interview with USA TODAY. “But we are determined to build a community and a culture that is inclusive. Dropbox is equally determined to increase the number of women and underrepresented minorities going into technology,” Houston said.
Here are some quick stats that I picked up while reading a post by Eze Vidra via Venturebeat
- The average partner is 46 years old.
- Of the 2011 NVCA Census, which included 600 respondents, 79 percent were men and 87 percent of respondents were caucasian.
- Of the 151 VC bios scanned, 79 or 53 percent had an MBA. Another 15 percent had a Phd, JD or MD. In the US, 60 percent of the MBAs were graduates of Harvard or Stanford.
- They previously had a job in consulting or finance.
I would argue that by adding more minorities to VC firms and opportunities in Silicon Valley creates more profitable opportunities as well as a fresh perspective on future innovations. There are some industries that do not advertise their opportunities and they make it insanely difficult to invade the impenetrable closed circle. As the world continues to move closer to a global community and ideas, creative opportunities, and new innovations spread, I believe that minorities cannot continue to be left out of the loop. I am learning more from actually trying to bring a product to market than I ever have in obtaining my MBA. Creating a start-up and working all of the angles is better than working in a traditional setting trying to squeeze profit from a rock by reducing head count and eliminating the opportunity to be creative. There is nothing wrong with obtaining an MBA if that is the career track that you want to follow. My purpose in this post to draw attention to the lack of minorities hired by VC’s.
My vision for the future is to become a venture capitalist at some point and provide an opportunity to others that are looking to make a mark on the world. After reading, The Alchemist, Paul Coelho states that, “it’s the possibility of having a dream come that makes life interesting.”
We need to raise awareness to the situation to present opportunities to people like me and others who have a desire to be apart of the VC community.