Women comprised only 16% of investment partners (vs. 51% of U.S. population)
Black employees accounted for only 3% of investment partners (vs. 14% of U.S. population)
Hispanic employees made up only 4% of investment partners (vs. 19% of U.S. population)
VC firms outside California, Massachusetts, and New York together account for where 16% of U.S. VC assets under management are based.
1.2% was invested in startups led by Black founders
2.1% was invested in startups led by hispanic founders
There are three main reasons for this imbalance:
Structure of VC industry and firms: Venture capital firms are small by design, reducing opportunities for entry, and VC education and information are not easily accessible.
Decision-making process: When hiring or investment opportunities do arise, psychological factors often exclude underrepresented groups from consideration.
DEI approaches: DEI is not “one-size fits all” for firms, and some approaches have not considered DEI beyond checking a firm’s “diversity hire” box, leading to poor outcomes.
50% of VC firms have someone on their team responsible for DEI (vs. 34% in 2018 and 16% in 2016).
43% of VC firms have a diversity strategy (vs. 32% in 2018 and 24% in 2016).
41% of VC firms have an inclusion strategy (vs. 31% in 2018 and 17% in 2016).
Still, progress has been uneven in some cases. For example, white women represent the majority of the growth in female representation among investment partners, while women of color have largely been excluded.
Thanks to our efforts, there’s a growing understanding of the importance of intersectional approaches to DEI.
Firms are also learning that it’s not enough to get investors from underrepresented communities into the ecosystem—once on board, these individuals must be respected, nurtured, and most of all: valued.