'I Don't Live in a World Where Fairness is an Option': Navigating the Venture World as a Black VC
Jun 18 2020
Editor's note: This is the second in our series examining diversity in venture capital. Read the first and third stories in this series and sign up for our newsletter to get the latest updates.
Entrepreneurs usually fall over each other for the chance to meet with people like Kobie Fuller, a partner at Upfront Ventures, one of Los Angeles' oldest and most prestigious venture firms, and a former investor at Accel, one of Silicon Valley's most well-known early-stage firms.
But Fuller, who is black, had become used to being overlooked at parties and mistaken for junior-level staff.
"I have been at network events where people don't know who I am, they assumed I was a random moron," he said. "They treat you like you are not in the room or you are some wait staff."
<p>Fuller said as his profile has risen, he's encountered fewer slights. But the experience is shared by other black venture capitalists who work in the mostly white, elite world of high-stakes capital, where there are few people of color. </p><p>The venture world, along with the rest of the United States, has been reckoning with the aftermath of the George Floyd killings and the deep inequities it exposed. </p><p>dot.LA talked to more than half a dozen black VCs, most in Southern California, that say they are constantly navigating the issue of race. The burden is often compounded by the fact that they are often the only black person in the room. </p><p>"Saying the same thing over and over again is exhausting, but I think what that represents is a bigger issue of feeling like you are the one that always has to do it," said Sydney Sykes, a co-founder of Blck VC and a former analyst at NEA who has been advocating to diversify the ranks inside firms. </p><p>"Think about walking into a boardroom. A black person walking into a boardroom is really going to notice they are the only black person in the room. The white person maybe will notice there's a black person in the room, but they will be like, 'oh, I don't see color' and they will feel pretty good about that."</p><p>"But the truth is we need to walk into every room and be aware when black people don't have a seat at the table," she said.</p><p>Earlier this week, the National Venture Capital Association <a href="https://dot.la/venture-top-industry-group-launches-nonprofit-to-diversify-its-ranks-2646175232.html" target="_self">announced a $5.5 million</a> effort to add diversity to its ranks. The effort is an acknowledgment that venture, which fueled the modern tech industry by pouring boatloads of cash into aggressively growing startups, has failed to diversify. <a href="https://nvca.org/pressreleases/second-edition-of-nvca-deloitte-human-capital-survey-uncovers-progress-for-diversity-inclusion-at-venture-capital-firms/" target="_blank">Only 3% of investors</a> at firms NVCA surveyed are black, though most firms didn't reply to it, suggesting the true number may be much smaller. </p><p>That has consequences beyond venture firms and for the culture at large, as those dollars rarely trickle down into communities of color. To see the connection between venture and the wealth gap, Harvard professor Paul Gompers said you can turn to places like Silicon Valley where largely white founders and investors have quickly become millionaires and billionaires and exacerbated income inequality. Across the U.S., <a href="https://www.brookings.edu/blog/up-front/2020/02/27/examining-the-black-white-wealth-gap/" target="_blank">white families on average are ten times wealthier than black familie</a>s, according to the Brookings Institute. </p><p>"Part of the reason these communities have seen the income gap grow is because they've not sufficiently been part of these two sectors," he said. "It doesn't explain everything, but certainly it is a contributor."</p><p>On one side are founders who raised $133 billion last year and often come from other entrepreneurial companies like Amazon or Google that have historically lacked diversity. </p><p>On the other side is the mostly white venture industry made up of around 1,300 funds that relies on personal networks which often don't extend beyond elite schools or the coasts. </p><p>Gompers adds the most successful venture funds tend to be self-replicating, attracting a top-flight but homogenous group of entrepreneurs who in turn make them more money. </p><p>Trying to crack into either world is tough. </p><p>Brentt Baltimore, an investor at Greycroft, said he broke into the industry largely because he found a mentor who helped him learn the unacknowledged code that exists.</p><p>"Somebody sat me down and helped me understand this game," he said. "There's a certain way that you move and shake here. That's not something you can learn online." </p><p>He and others like Sykes are trying to figure out how to make the industry more accessible for others. </p><p>"It's one thing to get in the door," he said. "It's another thing to build structure in the space." </p><p>Even when black investors are hired, there're often entrenched racial assumptions.</p><p>"When I am in the room, sometimes it's assumed I am the assistant," said Jawhara Tariq, an investor at Moonshots Capital. "I don't know if it's the racial angle or the gender or both." </p><p>It's happened enough times, she said, that she begins to question herself. </p><p>"It's not like the first person who has done it, but the tenth," she said. "It makes me start to feel like I shouldn't be there."</p><p>The cumulative effect of those situations is to place on her a mental burden that her colleagues don't carry. Crystal Clements, a clinical psychologist, said that being the only black person at a company is challenging. "There are common themes that tend to surface," she said. Some black people assimilate into white culture while others push toward perfectionism in order to overcome negative stereotypes. Others ignore the microaggressions, despite the sting believing the merit of their work is the most important metric of success. </p><p>But it doesn't erase the fact that some people just don't see black people as investors, a bias that isn't just shaken overnight. </p><p>Austin Clements, a partner at early stage venture firm OPV and the managing director at Grid110, said he has chosen to ignore much of those experiences. </p><p>"I don't live in a world where fairness is an option," he said. "I am certain that over the time in my professional career there are things that have made it difficult as an African American. I have put so little time in acknowledging those instances because that's what I expected."</p><p>But that milieu may ultimately hurt venture's bottom line. </p><p>Gompers, who looked at the performance of venture portfolios that had more diverse teams, found they achieved better returns than homogenous teams. </p><p>"The importance of diversity is all about making better decisions," he said. "If you all look the same and have the same experiences, you are gonna make the same mistakes."</p><p>That's been Fuller's operating assumption. Last year, he launched a social networking platform for black professionals, Valence, with the idea of building them more access and eventually more wealth. </p><p>The idea came to him after he was sought out — for the umpteenth time — by corporate ventures and others looking for black founders. </p><p>"People build their own personal network that mirrors who they are," he said. "People would say, 'Kobie, you're black. You must know some black people'."</p><p>"I would be lying if there wasn't a bit of tokenism," Fuller said. "But, diverse organizations do perform better."</p><p><em>Editor's note: This is the second in our series examining diversity in venture capital. Read the <a href="https://dot.la/lots-of-talk-but-little-action-how-can-venture-capital-solve-its-whiteness-problem-2646188887.html" target="_self">first</a> and <a href="https://dot.la/calpers-venture-capital-diversity-2646204153.html" target="_self">third</a> stories in this series and <a href="https://dot.la/st/newsletters" target="_self">sign up for our newsletter</a> to get the latest updates.</em></p><em><br/></em><p><em>Illustration by Candice Navi</em><br/></p>
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Blck VC Group Launches 'We Won't Wait' Campaign Pushing for Diversity in Investing Groups
Jun 03 2020
Venture capital has fueled billions of dollars in wealth but it has largely excluded black Americans. Only 1% of venture-funded startup founders are black and more than 80% of venture firms don't have a single black investor.
Blck VC, a group of young black investors and entrepreneurs are calling on the venture capitalist community to diversify their ranks and support the black community. Declaring Thursday, June 4th, a day of action, the group launched a campaign called "We Won't Wait."
<p>"Venture prides itself on being progressive. We disrupt industries. We work fast and break things. We fund dreams and create jobs. Yet, venture is one of the most homogeneous and exclusive clubs there is," a post from the group <a href="https://medium.com/@BLCK_VC/we-wont-wait-3eaa94d85aac" target="_blank">said on medium</a>.</p><p>Blck VC was started in the Bay Area in 2018 by Fredrik Groce, a principal at Storm Ventures and Sydney Sykes, who worked in venture and was struck by the lack of diversity in the field.</p><p>The group, with outposts in Los Angeles and other major cities, helps connect graduates to jobs in venture and investors to mentors through their growing network.</p><p>"Venture Capital is one of these unjust systems. It is a system of funding entrepreneurs that has routinely overlooked talented black founders and investors, squashing promising businesses and dreams as a result. It is time for venture to face the ugly reality that it is a system perpetuating the institutional racism that plagues our society," the post said.</p>The group is asking firms to donate to funds that fight systematic racism and help break the wealth gap, including its <a href="https://www.blckvc.com/donate" target="_blank">own group</a>, <a href="https://secure.actblue.com/donate/naacp-1" target="_blank">NAACP</a>, <a href="https://minnesotafreedomfund.org/donate" target="_blank">Minnesota Freedom Fund</a>, <a href="https://secure.everyaction.com/zae4prEeKESHBy0MKXTIcQ2" target="_blank">Reclaim the Block</a>, <a href="https://secure.eifoundation.org/site/Donation2?df_id=6082&mfc_pref=T&6082.donation=form1&s_src=kyrcmain&utm_source=kyrcmain" target="_blank">Know Your Rights Campaign</a>, <a href="https://secure.everyaction.com/4omQDAR0oUiUagTu0EG-Ig2" target="_blank">Black Visions Collective</a>, <a href="https://code2040-2020.funraise.org/" target="_blank">Code2040</a>, <a href="https://www.hbcu.vc/donate" target="_blank">HBCUvc</a>, <a href="https://secure.actblue.com/donate/devcolor" target="_blank">/Dev/Color</a>, <a href="https://www.hiddengeniusproject.org/donate/" target="_blank">Hidden Genius Project</a> and <a href="https://www.digitalundivided.com/donate" target="_blank">DigitalUndivided</a>.
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George Floyd Update: Disney Will Donate $5M to Social Justice Groups; a16z Announces Diversity Fund
Jun 03 2020
Here are the latest headlines regarding how the protests around the killing of George Floyd are impacting the Los Angeles startup and tech communities. Sign up for our newsletter and follow dot.LA on Twitter for the latest updates.
Today:
- Disney will donate $5M to Social Justice Groups
- Blck VC group launches 'We Won't Wait' campaign
- a16z VC firm launches fund to target diverse founders
- Snap stops promoting Trump's account in its Discover feature
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Disney will donate $5M to Social Justice Groups
<img lazy-loadable="true" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzM2OTY2MC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYzMjY2MTY2NX0._jc-luWmLRd9-UnBFZgyZJTm33I9_3T6Ssz9nZ3lkVY/img.jpg?width=980" id="15fc1" class="rm-shortcode" data-rm-shortcode-id="c602ad745e2c03d3c0175cf24139e96f" data-rm-shortcode-name="rebelmouse-image" data-width="768" data-height="433" />ABC's TV sitcom Blackish aired two "monumental and timely episodes" this week.
<p>The Walt Disney company announced Wednesday that it will donate $5 million to nonprofit groups fighting for social justice, starting with a $2 million donation to the NAACP. </p><p>"The killing of George Floyd has forced our nation to once again confront the long history of injustice that black people in America have suffered, and it is critical that we stand together, speak out and do everything in our power to ensure that acts of racism and violence are never tolerated," said Disney chief Bob Chapek in a statement. "This $5 million pledge will continue to support the efforts of nonprofit organizations such as the NAACP that have worked tirelessly to ensure equality and justice."</p><p>In a statement, the company pointed to its previous social justice initiatives, including providing "millions of dollars in grants to help students from underrepresented groups make the dream of higher education a reality, including $2.5 million to the United Negro College Fund." Disney also noted that it matches employee donations to "eligible organizations" and that on Tuesday it re-aired two "monumental and timely episodes" of <em>Black-ish </em>on its ABC television networks before a primetime special titled "America in Pain: What Comes Next?" </p><p>In its quarterly earnings released last month, Disney reported nearly $40 billion in revenue in the six months to March 28, 2020. Net income over the same period was down 68% from the year prior, however, as most of the company's business units have been battered by the coronavirus pandemic.</p><p><em>— Sam Blake</em></p>Blck VC group launches 'We Won't Wait' campaign
<img lazy-loadable="true" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzM2OTYzNy9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0OTg1NjgyOX0.Slh0ELzeW9DWblh2PyPxbOBhprxqdU6UhlN8slDMBOY/image.jpg?width=2000&coordinates=0%2C57%2C0%2C42&height=1500" id="97bd1" class="rm-shortcode" data-rm-shortcode-id="267038b66b1b79bab468b27e79b053c4" data-rm-shortcode-name="rebelmouse-image" data-width="2000" data-height="1500" /><p>Venture capital has fueled billions of dollars in wealth but it has largely excluded black Americans. Only 1% of venture-funded startup founders are black and more than 80% of venture firms don't have a single black investor.</p><p>Blck VC, a group of young black investors and entrepreneurs are calling on the venture capitalist community to diversify their ranks and support the black community. Declaring Thursday, June 4th, a day of action, the group launched a campaign called "We Won't Wait." <a href="https://dot.la/blck-vc-2646151711.html" target="_blank">Read more >></a></p><p><em>— Rachel Uranga</em></p>a16z VC firm launches fund to target diverse founders
<img lazy-loadable="true" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzM2OTQ0MC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY1MDkwMzg3MH0.dhLyHYGgwtjLRdt65OFroB4fgSdsiZTeTSSEG88d7Mw/img.png?width=980" id="25341" class="rm-shortcode" data-rm-shortcode-id="7a1c9842c8f468c18e05cdfc2be667a5" data-rm-shortcode-name="rebelmouse-image" data-width="400" data-height="400" />Ben and Felicia Horowitz will match up to an additional $5,000,000 total in any other donations.
<p>One of Silicon Valley's most prominent venture capital firms <a href="https://a16z.com/2020/06/03/talent-x-opportunity/" target="_blank">announced Wednesday</a> it is launching a new fund designed for entrepreneurs who have the talent, drive and ideas to build great businesses, but lack the background and resources to do so.</p><p>In a blog post, the firm says it has been working on the fund for six months. However, the timing of the news this week is fortunate for an industry with a <a href="https://pitchbook.com/news/articles/vc-firms-have-a-diversity-problem-do-they-care" target="_blank">serious diversity problem. </a><span></span></p><p>a16z plans to fund a small group of founders in the first year, then expand after that. The initial capital will come from $2.2 million in donations from partners. Ben and Felicia Horowitz will match up to an additional $5 from other donations as well. The firm will invest in exchange for equity in the business, but all returns will stay in the fund to finance future entrepreneurs, which aims to back products from underserved communities that also have an "interesting model, niche market, and/or a little traction to indicate the promise and potential."</p><p>"We're venture capitalists, not activists," the firm said in its post. "Entrepreneurship hasn't been accessible to everyone, but the fact remains that being an entrepreneur is one of the most powerful ways to own your own future, to increase mobility across time and place, to invent new ways of doing things, and to forge a new system. As we emerge from this tragic moment, let's build.</p><p><em>dot.LA co-founder and executive chairman Spencer Rascoff is a board partner at a16z.</em></p><p><em><span></span>— Ben Bergman </em></p>Snap removes Trump's account from its Discover feature
<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjY0ODQzMC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0MzYwNjI2NX0.iAteI6t1-vdRIqymUzeX5uJwPuIsRS9rqxTPuXASQBo/img.jpg?width=980" id="01215" class="rm-shortcode" data-rm-shortcode-id="f65582f8f474f612c8af0ff7acd0cc3f" data-rm-shortcode-name="rebelmouse-image" />Sam Blake<p>Snap has decided to no longer feature President Donald Trump's account on its Discover platform, where users can watch curated videos. </p><p>The Santa Monica-based company issued a statement Wednesday:</p><p>"We are not currently promoting the President's content on Snapchat's Discover platform. We will not amplify voices who incite racial violence and injustice by giving them free promotion on Discover. Racial violence and injustice have no place in our society and we stand together with all who seek peace, love, equality, and justice in America."</p><p>A Snap spokesperson said the company made the decision over the weekend. On Sunday, Snap CEO Even Spiegel wrote to his employees, condemning racial injustice. <a href="https://dot.la/trump-snapchat-2646151172.html" target="_blank">Read more >></a></p><p><em>— Sam Blake</em></p>From Your Site Articles
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