To say 2020 has been a whirlwind would be an understatement. COVID-19 forced us to be still—to pivot, reflect, and be human together. The murder of George Floyd on May 25 catalyzed an unprecedented social justice movement on and offline. According to data gathered by the Social Media Analytics Center at the University of Connecticut, in the 30 days after the murder, the #BlackLivesMatter hashtag was mentioned more than 80 million times on Twitter, Facebook, Reddit, and blogs. But making systemic change requires action, beyond the performativity of making vague statements about diversity on social media.
We’ve previously written about the lack of diversity in the venture capital industry. Currently, only 1% of VC-backed entrepreneurs are Black. According to a Morgan Stanley report published earlier this month, 61% of venture capitalists say that the Black Lives Matter movement has impacted their investment strategy, and 43% of these investors say that funding “multicultural-founded” companies is now one of their top priorities, up from 33% in 2019. But in order to truly move the needle on DEI work, here’s what needs to continue to happen in the industry in 2021:
Promote Black and minority talent
Talent undeniably drives innovation. Since the summer, there have been some large triumphs in hiring, promoting, and celebrating Black talent. Notably, GV (formerly Google Ventures) promoted Terri Burns to investing partner. This move broke records, making her the youngest and first Black partner at GV. Softbank enlisted Stacy-Brown Philpot, former CEO of TaskRabbit, to help run its new Talent x Opportunity Fund. Sequoia, one of Silicon Valley’s giants announced its European team expansion by welcoming Zoe Jervier Hewitt as an operating partner overseeing talent.
However, according to the National Opinion Research Center, only 3.2% of executives and senior manager-level employees are Black. Oftentimes Black employees are overlooked and don’t have relationships with key decision-makers. This is a vicious cycle that’s affecting many industries—and 2021 is the year to change this. To reverse the cycle, evaluate your promotion practices within your organization and ensure you are reviewing all employees, specifically Black employees who have been in the same position for an extended period. Many times Black employees have shared where they want to see themselves at a firm. So make sure you have leaders listening. If Black employees don’t see anyone in a senior position that looks like them, why should they stay?
Invest in diversifying your network
In recent months, companies have taken a number of strides to address the racial disparity in our industry. SoftBank, the largest tech investor, announced a $100 million Opportunity Fund and shortly afterward, Andreesen Horowitz announced the aforementioned Talent x Opportunity Fund, which started with donations of $2.2 million from the firm’s partners. Their focus is to train and seed capital to underrepresented founders. The swift action from these larger players emphasized that the capital exists and can be funneled to Black entrepreneurs; it simply has not been channelled for equity. VCs need to ensure that their networks are intentionally diverse to really make a difference.
Your network starts with your team. “Who you know” often mirrors what your firm looks like—and ultimately where you invest. If you don’t have a diverse workforce that can provide referrals or diverse social networks, then you should ensure you are tapping into the right organizations and networks to recruit diverse talent, including 2050, Jopwell, Noirefy, and Tech Connection. There should be no excuse when it comes to finding Black or minority talent. We are there, and are as equally talented as our white counterparts.
From a deal-flow perspective, we’ve found great success in partnering with other VCs globally to produce virtual office hour events that have helped us connect with founders and investors from beyond our ecosystem and across demographics, geographies, and sectors. This approach can be just as effective as creating a targeted fund for diverse founders.
Work with experts to level the playing field
More than ever, the industry needs to understand that organizations and programs run by Black people lead to the advancement of Black people. The most successful of these is BLCK VC. Founded by Frederik Groce and Sydney Sykes in 2018, the organization has been instrumental in spearheading change. With a clear focus on addressing the talent gap in venture capital, their mission is to double the number of Black investors by 2024. This year, they launched the Black Venture Institute which will train 300 Black professionals to make startup investments over the next three years. Their Fellowship program with Lerer Hippeau and Anthemis in New York is designed to support Black professionals with the necessary tools and skills to enter the industry at a later stage. We urge you to continue investing in these sorts of programs that not only help support untapped talent, but cultivate it, as well.
Measure internally and share externally
Research shows that diversity brings increased profitability, creativity, and a host of benefits to an organization. According to a Boston Consulting Group study, organizations with more diverse management teams have 19% higher revenues due to innovation. However, don’t just measure diversity from a profitability lens. Commit to equity because it will keep your venture firm accountable, and inspire other firms in the industry to stay transparent. Tracking will provide a path for the companies that come after you.
We hope that in 2021 and years to come, this continues to be a lasting movement. We are optimistic that leaders across industries continue to implement strategies to ensure that Black people and other POC are seen, heard, and rightfully promoted in leadership positions. But we must continue to make progress. That’s when we will see real change in our economy.
Charity Mhende is a marketer and storyteller working at Anthemis, with experience driving brand awareness for small to medium enterprises across the U.S. and EMEA.
Elise Brown is a marketing executive at Anthemis and thought leader driving innovation globally in financial services through a combination of strategic marketing, product, and brand development.