Want To Solve Venture Capital's Diversity Problem? Start With Pension Funds

Ben Bergman

Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.

Want To Solve Venture Capital's Diversity Problem? Start With Pension Funds

Editor's note: This is the third in our series examining diversity in venture capital. Read the first story here, our second one here and sign up for our newsletter to get the latest updates.

For all the well-intentioned talk on social media and beyond about the need for diversity and inclusion after the killing of George Floyd, there is one thing that speaks louder than anything else in venture capital: Money.


There is certainly a considerable amount that VCs and founders can do to improve diversity, but those in the industry say it is the limited partners who fund the whole ecosystem who could make the biggest difference.

"It's the LPs that have the power and can demand who they should or shouldn't be investing with," said Sue Toigo, co-founder of the Robert Toigo Foundation and chair of Fitzgibbon Toigo & Co.

At this moment of heightened public awareness, forcing big public pension funds to commit to putting more of their dollars in funds controlled by minorities could have a major impact. These public institutions, unlike their corporate kin, represent a wide and diverse swath of the country, making investment decisions for public servants like teachers, firefighters and municipal workers.

Two major funds, CALPERS and the Illinois Municipal Retirement Fund, illustrate the stark differences in the rules that govern pensions and the people who manage them.

"Our sources of capital are the LPs – like the city of L.A., CalPERS, foundations, and endowments," said Kate Mitchell, who co-chaired the National Venture Capital Association's first diversity and inclusion committee in 2014 and co-founder of Scale Venture Partners. "Their constituents are diverse, and they care greatly about this."

Just 2% of VC investment partners identify as African American or Latino and less than 10% of VC-funded companies are led by women or people of color, according to PledgeLA. LPs could greatly increase both numbers, according to Paul A. Gompers, a professor at Harvard Business School who studies the demographics of finance.

"Who you invest in looks a lot like who you are," Gompers said. "We know there are underserved pockets of entrepreneurs out there and those opportunities could perhaps create greater returns."

In response to the #MeToo movement, the Institutional Limited Partners Association, the industry voice for pension funds, foundations and sovereign wealth funds, expanded its due diligence questionnaire in 2018 to measure ethnic and gender diversity as well as hiring and promotion. Those changes, Mitchell said, have had a noticeable impact raising the bar with firms that must now answer to questions about hiring and diversity.

"It isn't done in a day," she said. "If you are going to make it happen, you have to make it a sustained effort."

Two Approaches: California and Illinois

CalPERS headquarters in Sacramento.

The granddaddy of pension funds, California Public Employees' Retirement System, divested from apartheid South Africa in 1986 and got out of tobacco stocks in 2000. It also doesn't invest in thermal coal miners, manufacturers that make guns banned in California and businesses operating in Sudan and Iran. But prioritizing diverse funds has proven trickier because of the 1996 voter-backed Proposition 209, which CalPERS says bars it from giving preferential based on race, ethnicity or gender.

"LPs love to use Proposition 209 as the reason why they can't do anything," said Emanuel Pleitez, co-founder of East Los Capital who runs an annual conference aimed at educating officials that sit on institutional boards about how to invest in asset classes. "But you can still gather data and be transparent and be sure that the public knows what you are doing. There's a massive opening for LPs to do their jobs that's about picking the best managers and vendors that are diverse."

Pleitez argues that by not emphasizing diversity, public institutions have tipped the scale of wealth toward a class of white asset managers who have gained outsized profits.

In an effort to legally promote diversity, CalPERS, which manages about $400 billion in assets, started an "emerging manager" program in 1991. But last year it slashed the already small program from $3.5 billion to just $500 million in assets under management.

CalPERS declined to make anyone available for an interview. A spokeswoman explained the reduction occurred amid a broader effort to reduce fees and increase returns by shifting to managing 95% of private equity investments internally, up from 80% before. (CALPERS says during the last fiscal year it also "engaged" 700 companies to encourage greater diversity on their boards, half of which did so.)

An internal memo obtained by the website CIO warned that terminating the program "could receive media or legislative attention" but said the cuts were necessary because of long-term underperformance.

"A lot of the women and minority funds have actually closed," said Toigo. "All of the data indicates when you have diverse boards and diverse leadership you have better returns. I would argue you're actually violating your fiduciary responsibility by not paying attention to the data. Unless you're only selling to white people, if I was at a firm I would want every point of view represented in the investment process," said Toigo.

The Illinois Municipal Retirement Fund (IMRF), with $44.8 billion in assets under management, has taken the opposite approach of CalPERS', placing a high emphasis on diversity in its investment decisions.

"It's not about whether you can just do diversity or meet returns," said Dhvani Shah, IMRF's Chief Investment Officer. "We can do both."

As of the end of last year, minorities managed 33.8% of IMRF's actively managed assets, a 19.6% increase from 2018.

Shah says she is mandated to prioritize diversity under the Illinois Pension Code, which states that pension funds should "increase the racial, ethnic, and gender diversity of its fiduciaries, to the greatest extent feasible within the bounds of financial and fiduciary prudence."

IMRF's annual return for 2019 was 19.57%, beating the industry benchmark of 18.68%.

"I think Illinois can serve as a model," said Shah.

Rachel Uranga contributed reporting to this story.

Editor's note: This is the third in our series examining diversity in venture capital. Read the first story here, our second one here and sign up for our newsletter to get the latest updates.

https://twitter.com/thebenbergman
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LA Tech Week 2025: Sunday’s Event Lineup

Here's the Sunday, October 19th lineup for LA Tech Week 2025, organized by location so you can easily explore events that fit your goals and schedule. Dive in and see what’s happening near you!

ARTS DISTRICT

3:00 PM

BEL AIR

3:00 PM – 7:00 PM

BURBANK

6:30 PM – 9:30 PM

CULVER CITY

9:00 AM – 5:00 PM

4:30 PM – 7:30 PM

INGLEWOOD

10:00 AM – 2:00 PM

  • Spinovation: The Future Is Femme, The Future is Frequency: See Details Here
    Sonder Impact, Black Women Spin, Sip & Sonder

KOREATOWN

12:00 PM – 3:00 PM

MARINA DEL REY

12:00 PM

  • Sunday Tech Brunch
    Sawubona

MID CITY

9:00 AM – 11:00 AM

  • Women in Cleantech Hike and Network: See Details Here
    Women in Cleantech and Sustainability

SANTA MONICA

9:00 AM

10:00 AM

3:45 PM

4:00 PM – 7:30 PM

  • OFF THE HOOK Santa Monica Seafood Festival: See Details Here
    Spin PR Group, City of Santa Monica, Tech St.

6:00 PM

7:00 PM

  • Pritam: A Musical Legend - Live in Concert: See Details Here
    American South Asian Network

7:00 PM

  • Building AI workflow editor in React with Workflow Builder SDK: See Details Here
    Workflow Builder

7:00 PM

8:00 PM

  • Unlock Apple's Corporate Advantage for your Startup!: See Details Here
    iStore by St. Moritz

TOPANGA CANYON

3:00 PM

  • Dreamore Hike and Picnic: LA Tech Week: *Invite Only*
    Dreamore

VENICE

10:00 AM – 12:00 PM

  • Coffee, Walk, and Schmooze: See Details Here
    JFE (Jews For Entrepreneurship) Network

VIRTUAL (LA)

10:00 AM

  • Level Up with LinkedIn: A Student’s Guide to Networking & Opportunities (Virtual Event): See Details Here
    FIMAC

10:00 AM

WEST ADAMS

1:00 PM – 3:00 PM

For updates or more event information, visit the official Tech Week calendar.

Enjoy LA Tech Week 2025!

Download the dot.LA App


LA Tech Week 2025: Saturday’s Event Lineup

Here's the Saturday, October 18th lineup for LA Tech Week 2025, organized by location so you can easily explore events that fit your goals and schedule. Dive in and see what’s happening near you!

BEVERLY HILLS

2:00 PM

CENTURY CITY

7:00 PM – 10:00 PM

CULVER CITY

9:00 AM – 5:00 PM

10:00 AM – 11:30 AM

1:00 PM

DTLA

7:00 PM

  • {MiniMax x Nakid x SkyPortalx}: TECH/MOTION/MUSIC/ART: See Details Here
    MiniMax (Hailuo AI)

10:00 PM – 2:00 AM

EL SEGUNDO

10:00 AM

  • Venture on the Green: *Invite Only*
    BLCK VC

4:00 PM

INGLEWOOD

7:00 PM

  • Valar Atomics, Durin and Discipulus Ventures - Night With A Nuclear Reactor: See Details Here
    Valar Atomics, Durin, Discipulus Ventures

MARINA DEL REY

8:30 AM

12:00 PM – 3:00 PM

5:00 PM

  • LOST iN Sunset Sail: Navigating the Tides of the Creator Economy & Media: See Details Here
    LOST iN

PASADENA

9:00 AM

PLAYA VISTA

2:00 PM – 4:00 PM

SANTA MONICA

7:00 AM

9:00 AM

  • Pedal & Network: Tech Cyclists @ LA Tech Week 🚵: See Details Here
    Instafill.ai

9:30 AM

  • Getty Center Guided Tour & (Optional) Photography Scavenger Hunt: See Details Here
    NEW MOON Impact Productions

10:30 AM – 11:30 AM

11:00 AM – 2:15 PM

12:00 PM – 5:00 PM

1:00 PM – 5:00 PM

1:30 PM

  • Self-Defense in Court and the Streets: See Details Here
    Santa Monica Striking, Luri Inc.

2:00 PM

  • SMARTUP 500: THE FIRST AT TECH WEEK LA - Launching the world’s first Startup Ranking: See Details Here
    Smart Times

2:00 PM

  • NLPs (No Lame Panels) The Creator X Founder Rooftop Party: See Details Here
    Startup Village, Sanctuary

3:00 PM – 4:00 PM

4:00 PM – 6:30 PM

  • Just Do It?: Helping Founders Perform Like Olympians: See Details Here
    Elite Psychology Group

5:00 PM

6:00 PM

6:00 PM – 9:00 PM

6:00 PM

6:00 PM – 9:00 PM

  • The Future of Hospitality: Poetry, Provenance & Passports: See Details Here
    Villa Kitchen, Airble, We Speak Dance, Techstars San Francisco

7:00 PM

  • 🚀 Investor x Founder Open Mic Pitches: See Details Here
    Feathr, Los Angeles Fun Events

7:00 PM

  • Life is a Pitch - LA Edition: *Invite Only*
    DeepMyst

TOPANGA CANYON

5:00 PM – 8:30 PM

  • Walk&Jam: Use AI to make art while hiking Topanga Canyon: See Details Here
    Formhaus llc, Wonderland Immersive Design

TORRANCE

1:00 PM – 4:00 PM

  • Crunches & Conversations Presented by The Differentials and KIS Training Studios: See Details Here
    The Differentials, KIS Training Studios

VENICE

1:00 PM – 4:30 PM

  • Beyond the Language Barrier: Exploring AI's Next Frontier: See Details Here
    Medusa AI

VENICE BEACH

8:00 AM – 12:00 PM

  • SŨRFED Club @ Venice Beach: Founders, Creators, Investors share the waves: See Details Here
    SŨRFED Club, Go Vitamins

WEST ADAMS

9:30 AM – 10:45 AM

  • Funders Shaping Democracy, AI & Media: See Details Here
    New Media Ventures, New Rising Ventures

WEST HOLLYWOOD

4:00 PM

6:00 PM – 8:00 PM

9:30 PM

  • Vibe Check Comedy Show, Tech Week Edition! @ Hollywood Improv: See Details Here
    Vibe Check Comedy

For updates or more event information, visit the official Tech Week calendar.

Enjoy LA Tech Week 2025!

Download the dot.LA App


LA Tech Week 2025: Friday’s Event Lineup

Here's the Friday, October 17th lineup for LA Tech Week 2025, organized by location so you can easily explore events that fit your goals and schedule. Dive in and see what’s happening near you!

ARTS DISTRICT

8:30 AM – 12:00 PM

  • Power Day: Ideas, Pitches, Connections: See Details Here
    Los Angeles Cleantech Incubator (LACI)

6:00 PM

  • WEB3 GAMING IS DEAD - Happy Hour: See Details Here
    Plassa Capital, Yee-Haw Monster Trucks

BEVERLY HILLS

10:00 AM – 11:00 AM

1:00 PM – 2:00 PM

2:00 PM – 3:00 PM

3:00 PM – 4:00 PM

4:00 PM

6:00 PM – 9:00 PM

  • So you went viral, Now what? (pt II): See Details Here
    Verci, Study Fetch, TechSpace

8:00 PM

  • Private Pool: GP x LP x FO: *Invite Only*
    Visionlist Commons , Bay Area Innovest

BRENTWOOD

8:00 AM

  • Founders & Investors Hike: See Details Here
    Salehpour Legal, Technology Founders of America

CARSON

11:45 AM

  • Lightspeed x SVB Porsche Experience: *Invite Only*
    Lightspeed Venture Partners, SVB

CULVER CITY

8:00 AM – 6:00 PM

11:00 AM

1:00 PM

  • Surf Parks & Wave Pools: From Doja Cat to Mark Zuckerberg: See Details Here
    Surflytics

8:00 PM – 12:00 AM

EL SEGUNDO

11:30 AM – 2:00 PM

5:00 PM – 8:00 PM

HOLLYWOOD

10:00 AM

  • AI, Revenue, and Reality: How Fortune 500s Work With Startups That Ship: See Details Here
    Sunrise AI, OpenTable

12:00 PM – 2:00 PM

  • Unplugged: LA Tech Week Recharge Experience with TAY × Checked Out: See Details Here
    TAY Fitness, Checked Out

9:00 PM

INGLEWOOD

8:00 AM

  • TCSI Presents: Caffeine & Connections: See Details Here
    The Cyber Security Intellects Nonprofit

LONG BEACH

7:00 AM

MALIBU

10:00 AM

  • Great Leaders Podcast & Profiles: See Details Here
    NEW MOON Impact Productions, Origin Studios

12:30 PM

MARINA DEL REY

9:00 AM

  • Keeping Your Freedom as a Founder: Real Talk on Funding: See Details Here
    Lighter Capital

10:00 AM – 1:00 PM

  • D-Wave Research Day & Hackathon!: See Details Here
    USC Information Sciences Institute, D-Wave

4:00 PM – 6:00 PM

  • The Sky is Not the Limit: All About Aerospace: See Details Here
    Sunstone Management, USC Viterbi Startup Garage

PASADENA

10:00 AM – 1:00 PM

11:30 AM – 1:30 PM

  • Deep Tech Entrepreneurship Pillars of Pasadena Tech: See Details Here
    Innovate Pasadena, Pasadena SBDC, City of Pasadena

PLAYA VISTA

9:00 AM

12:00 PM – 2:00 PM

  • Vision to Venture - AI Media Showcase powered by Google AI: See Details Here
    Google

SANTA MONICA

7:00 AM – 8:30 AM

  • Signal Run : RTC x Wildwood VC: See Details Here
    Run Tech Club, Wildwood Ventures

7:30 AM

8:45 AM – 10:45 AM

9:00 AM – 11:00 AM

  • Slash Burn Rates & Scale Your Startup: See Details Here
    Arizona Commerce Authority (ACA)

9:00 AM

  • Driving a Digital Ecology Relay: What is at Stake: See Details Here
    The PORT GLOBAL, GLOBAL PORTAL INSTITUTE

9:30 AM – 11:30 AM

10:00 AM – 1:00 PM

  • The Enduring Value of Inclusive Capital: See Details Here
    Founders Registry. Nervana

10:00 AM – 12:00 PM

10:30 AM

11:30 AM – 1:00 PM

  • Advisors to Investors Lunch: Venture Capital for enterprise leaders: See Details Here
    Collinear Capital, Worlds

12:00 PM

  • Powerhouse Capital & a16z speedrun Investor Lunch Mixer: See Details Here
    Powerhouse Capital, a16z, speedrun

2:00 PM

  • Where Robotics Meets Heart - Embedding Family Values in a Future with AI: See Details Here
    Trove, Puerto Rico Blockchain Association, MindfulBytes

2:00 PM

3:00 PM

3:00 PM

3:00 PM

  • Workshop: Create An Enterprise Chatbot and Unlock the 70% of Data Data You’re Not Using: See Details Here
    Aparavi

4:00 PM

5:00 PM – 10:00 PM

5:30 PM

5:30 PM – 9:30 PM

6:00 PM – 8:30 PM

  • USC Alumni Founders & Investors: See Details Here
    USC Alumni Entrepreneurship Network, Techstars

6:00 PM

  • Social Currency Series/Greenlit presents PitchPop: See Details Here
    Social Currency Series, Greenlit

6:00 PM – 9:00 PM

6:30 PM

6:30 PM – 10:00 PM

6:30 PM

  • Lets get the LA Bioeconomy brewing: See Details Here
    Founders, Friends & Fermentation, Saku Biosciences

7:00 PM – 11:30 PM

7:00 PM – 10:00 PM

7:00 PM – 10:00 PM

7:00 PM

7:00 PM

  • Liquid Equity 2: The Premiere Gathering for Founders, Creator
    Coeus Collective

7:00 PM

7:00 PM

  • For the Love of Tech | Speed Dating for Tech Professionals: See Details Here
    Feathr, Los Angeles Fun Events

7:00 PM

SOUTH LA

3:00 PM

TORRANCE

9:00 AM – 11:00 AM

  • The Future of Space & Security Panel: See Details Here
    Northwood Space, Anduril Industries, Impulse Space, Astranis

VENICE

9:00 AM – 10:45 AM

9:00 AM – 11:30 AM

11:00 AM

11:30 AM – 2:30 PM

12:30 PM

  • Creative Partners: Human + AI Storytelling: See Details Here
    Othelia, Primordial Soup

2:00 PM – 3:45 PM

5:00 PM

  • EarthHouse: Critical Minerals, Mobility & Modern Power: See Details Here
    The Strategye Group, Alpha Sierra One

6:00 PM – 9:00 PM

6:00 PM

  • Pizza+Soda: *Invite Only*
    Schmoozd , The KINN

7:00 PM

VENICE BEACH

2:00 PM – 6:30 PM

5:00 PM

8:30 PM – 2:00 AM

VIRTUAL (LA)

2:30 PM – 4:00 PM

3:00 PM

  • Government of Alberta: ProcurementAsCode // Done in 60 Seconds: See Details Here
    Government of Alberta

4:00 PM

  • Stop Hitting Yourself 🥊: See Details Here
    Stop Hitting Yourself, HOWDY, Company Policy, Snowbird Global

WEST HOLLYWOOD

3:00 PM – 6:00 PM

6:00 PM

WESTSIDE

5:00 PM

5:30 PM – 8:30 PM


For updates or more event information, visit the official Tech Week calendar.

Enjoy LA Tech Week 2025!

Download the dot.LA App


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