After making diversity and inclusion a priority in 2014, the National Venture Capital Association formed a task force to take on what is a male-dominated profession. In just months, the group has increased diversity internally, as well as in the field, and encouraged members to invest in minority-run businesses.
The National Venture Capital Association has invested in diversity—and it’s paying off, according to officials.
In a report released on July 27, the group highlighted the action it and others have taken to boost minority representation within NVCA and the industry in recent years. Steps included diversifying NVCA’s leadership and encouraging members to recruit from minority groups otherwise underrepresented in the field as well as to invest in their businesses, according to the document.
“Diversity is core to the competitiveness of the entrepreneurial ecosystem,” said Bobby Franklin, NVCA president and CEO, in a statement. “Diverse teams and inclusive approaches to building companies improve outcomes for society, individuals, and the future of innovation.”
NVCA undertook diversity and inclusion (D&I) efforts in earnest in December 2014 when it launched a task force dedicated to increasing the percentage of minorities in the industry. The association also focused on creating a more diverse board of directors. The NVCA Board of Directors is now composed of 38 percent women and minorities.
D&I efforts have emerged as a major issue for associations in recent years, especially in governance. A 2012 ASAE benchmarking study revealed that 7 percent of boards had no female members, while 39 percent lacked representation from a minority group.
In the venture capital world, the issue is even more daunting. A 2011 NVCA study determined that 89 percent of venture capitalists are male. As of 2015, 40 of the top-100 firms in the industry did not employ a single woman as a venture capitalist, according to a survey published by Page Mill Publishing.
While that report stopped short of identifying a cause behind the lack of diversity, it did theorize that the “old boys’ network” atmosphere the industry was founded in likely played a role in the glaring discrepancy.
Aside from increasing diversity within NVCA, the group celebrated 45 member firms publicly committing to encouraging women and minorities to enter the field, according to officials.
NVCA also has a partnership with the Robert Toigo Foundation—an organization that mentors young, minority professionals—that offers foundation fellows and alumni the opportunity to network with NVCA members at industry events.
In the report, contributors argued that increased industry diversity will only make venture capital firms stronger.
“We believe that the venture capital firms that recognize the competitive value of investing in women and minority founders and bringing diverse talent into their investment teams will lead the way,” said NVCA Diversity Task Force Co-Chairs Kate Mitchell and Ashton Newhall. “Expanding their reach for the most qualified talent across diverse communities will only increase their likelihood of success.”