'VC misses out on $4 trillion by not investing in diverse founders.' Great article by rtenbrink1!
Despite the focus on equity and diversity in the wake of #BlackLivesMatter and the #MeToo movement, funding for minorities and women actuallyOften when I speak to diverse founders, they mention I am the only Latina VC they have met . They immediately feel at ease—they can focus on pitching their business instead of feeling they have to overcome bias and pre-perceptions, which impacts their delivery.
As part of a diverse community, diverse investors can tap into diverse networks, much like those that went to Stanford tend to know more people from Stanford. Without diverse investors, a firm may never meet the most talented diverse founders and overlook underestimated founders that have the ability to build huge businesses. For example, I am a member of VC Familia, , and Transact where we often share deal flow from diverse founders.
recently noted: “Founders are increasingly selective and strategic in their investor selection. Building remarkable businesses, these founders are seeing growing competition to participate in their rounds.” Successful founders are keenly aware of the value of a diversified cap table and the disruptive insights and transformational connections it can unlock. It has been proven that a diversity of perspectives doesn’t just make things fair, it leads to better business outcomes.
In the same vein, tracking the number of diverse-founder companies a fund is looking at may just be a vanity metric. Funds should also look at engagement metrics and ask themselves: Are we giving diverse founders a fair shake? Is our team spending the same amount of time and care reviewing their businesses? 3) Acknowledge that the entrepreneurial journey has systemic hurdles for diverse foundersIt requires you to sustain yourself for years before being able to cash out.
, Executive Member Latino Corporate Directors Association, and President Hispanic Alumni Club Columbia Business School.