Venture Capital Firms Continue to Struggle With Diversity, Study Finds
The venture capital industry has been a largely white, male world, and a new study shows that change is slow in coming. Still, the National Venture Capital Association’s diversity task force, not even a year old, continues to push forward with new initiatives aimed at increasing opportunities in the field for women and underrepresented groups.
Turns out, the tech industry and corporate boards are not the only ones struggling with diversity and inclusion. Venture capital firms, which might be seen as an extension of the tech world in Silicon Valley, face many of the same issues.
A 2011 National Venture Capital Association study found that 89 percent of venture capitalists are male. In an effort to improve those numbers, NVCA launched a diversity task force last year that included 11 current and former members of the NVCA board who held leading roles at high-profile venture capital firms.
It’s hard to measure the impact of that task force, which is less than a year old. But according to a new study released last week, it still has a long way to go. A Page Mill Publishing survey of more than 800 U.S.-based venture capital firms identified only 403 female venture capitalists who were spread across 257 U.S. firms. Just 31 of those firms employed three or more venture capitalists who were women. And of the 100 largest firms, 40 didn’t employ a single female venture capitalist.
The report offers no explanation for the gender gap, but it cites theories about the “old boys’ network from which the venture capital industry sprang.”
It’s in this persistently challenging environment that the NVCA diversity task force continues to press for change.
Earlier this month, the group enlisted 45 venture capital firms to sign onto a commitment to advance opportunities for women and underrepresented groups in the venture capital and entrepreneurial network. The firms signed a letter [PDF] that was submitted to President Obama as part of the first-ever White House Demo Day—an event organized to showcase the wide-ranging talents of innovators and entrepreneurs from across the country.
“A thriving innovation economy depends on the contributions of women and men of diverse talents, ethnicities, and backgrounds,” NVCA President and CEO Bobby Franklin said in a statement. “NVCA and our Diversity Task Force are committed to both near- and long-term solutions to effect positive change that will support diverse entrepreneurs and investors who aspire to build ideas into companies.”
As part of their commitment, the firms that signed the letter agreed to take several actions, including distributing and participating in NVCA’s 2015 Venture Census survey, adopting HR policies that foster diversity and inclusion, and contributing regularly to programs and initiatives designed to encourage women and members of underrepresented groups to consider and pursue venture capital careers.
“If we are going to continue to innovate, we need to work together to ensure talented individuals can pursue opportunities to build and grow companies that can change the world,” Jessica Straus, director of strategic initiatives at NVCA, wrote in a blog post. “Through collaborative efforts with other organizations advancing inclusion, we can expand connections and mentor relationships between experienced investors and entrepreneurs, and through greater knowledge we can develop industry-wide best practices that foster a pipeline of women and minorities to access venture capital and opportunities to work in the industry.”