'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>
From Your Site Articles
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- a16z VC Firm Launches Fund to Target Diverse Founders - dot.LA ›
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- Blck VC Group L aunches 'We Won't Wait' Campaign - dot.LA ›
- Blavity CEO Morgan DeBraun Calls for Action After George Floyd ... ›
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Jiake Liu is the founder of a startup outdoor furniture company, but lately he feels like he's running a second company — one that's helping supply local hospitals with thousands of protective masks and, in the process, rallying Los Angeles' tech community.
Liu started SoCal Tech for Hospitals in early March with the goal of raising $60,000 to purchase 30,000 masks for hospitals facing shortages. He's now helped raise nearly $200,000, delivered 50,000 hospital-grade masks and is looking to up the ante with the region's vast tech community to do good beyond the pandemic.
<p>Over the past months, he's enrolled some of the most well-known startups in town to pitch in for the logistical effort of distributing the masks. After the workday ends, Liu jumps on the phone with other founders to orchestrate the effort. </p><p>"We are really able to leverage everyone's expertise," he said. "It really is the spirit of entrepreneurship. You don't necessarily have the right answers. But you come to figure things out."</p><p class="shortcode-media shortcode-media-rebelmouse-image image-crop-16x9">
<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzI3MTc3MC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1MjQyMTEyN30.WVx0C9QhDLvVkFRlZmEn7EOdjZ3meTLe97s2g3Uryoo/image.jpg?width=1245&coordinates=0%2C43%2C0%2C35&height=700" id="671cf" class="rm-shortcode" data-rm-shortcode-id="9462c9374beed2f895d484c4a0abeb76" data-rm-shortcode-name="rebelmouse-image" />
</p><p>His own company, Outer, uses their warehouse to store palettes of masks he's helped procure. Trucks from on-demand storage company Clutter distribute the medical supplies. While, Well Health pitches in by gauging the needs at local hospitals. Others, like the head of the rental furniture company Fernish rally venture capital donations. <br/></p><p>Early on Liu found that venture capital firms had already been bombarded with requests for donations, but his pitch was that this effort would benefit local hospitals and was different.</p><p>"We are really the only group that's like 'let's really reach the L.A. tech community,'" he said. "If you work in L.A. tech you should donate to us. It was a call to action."</p><p>It got attention. He's <a href="https://www.socaltechforsocalhospitals.org/our-supporters" target="_blank">pulled in donations</a> from some of the region's top firms including Wonder Ventures, GreyCroft, Upfront Ventures. He also pulled in donations from the online coupon cutter Honey Science Corp. and carpet seller Ruggable. dot.LA is also a contributor. In return, companies get a shout out on their website.</p><p>Among the hospitals that have received the masks are Adventist Health Glendale, Children's Hospital of Los Angeles, Dignity Health - California Hospital Medical Center, Pomona Valley Medical Center, St. Francis Medical Center, LA+USC Medical Center, Arrowhead Regional Medical Center, White Memorial Community Health Center, Harbor UCLA Medical Center and Olive View UCLA Medical Center.</p>
<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzI3MTc3Mi9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYxMTQ2MDc2MH0.wT9tvEhagfi6DHZr0BWCVDWP-FKE_-vtiBMfxq-g_z8/img.jpg?width=980" id="3d215" class="rm-shortcode" data-rm-shortcode-id="023b67c85ca59af2594a26cb53e5abb0" data-rm-shortcode-name="rebelmouse-image" />
<p>Liu began the effort because a doctor couple he knew that worked at Cedars Sinai Medical Center were worried about the supply of masks, so he started a <a href="https://www.gofundme.com/f/fight-covid19-la-startups-for-la-hospitals" target="_blank">GoFundMe page</a>.</p><p>"When I started, I just wanted to get masks for my friends, but as I started talking to folks and getting a sense of the desire to do good," he said.</p><p>Someone at the location data software company Factual saw the page and introduced Liu to the nonprofit the Count On Me Family Foundation, which is now handling the funds.</p><p>Liu's next goal is to hit $250,000 in donations, but he has a larger one. With non-profit LA-Tech.org recently joining the effort, he's looking at ways to keep the momentum going beyond the pandemic.</p><p>"Now that we have attention of the tech community, the question is can we diverge some of the energy that we captured to continue to do good?"</p>
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A teenage boy holed up in his basement may be the image most people associate with gamers, but lifelong game-player Jill Wilson thinks the new face may be women on their cell phones looking to release a little stress.
Wilson, the company's founder, is trying to build a new genre called "lifestyle gaming" and she just got a big boost having raised $7 million in an oversubscribed seed round led by LVP along with backers from 1Up Ventures, Alpha Edison, Everblue Management, firstminute Capital, Greycroft Tracker Fund, Hearst Ventures and Third Kind Venture Capital.
"The concept itself is actually a new category of digital entertainment because it's not squarely in mobile gaming and it's not squarely in existing lifestyle content," Wilson said. "It's Pinterest meets mobile gaming."
<p>The funding will go to building out the small Venice-based company and developing games for market. Wilson hopes the first game will be available within a year for download within the Apple and Google Play stores.</p>
<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjg4NTYwOC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYzMTU3MDIzMH0.tRG8eAZFiqzaNcG5UDjWYIHOj3UN2fmiZRxe1V2MqFY/img.jpg?width=980" id="f2575" class="rm-shortcode" data-rm-shortcode-id="a88ad0194e0cde80f5cc6ef6928ec6ce" data-rm-shortcode-name="rebelmouse-image" />
Robin Games founder Jill Wilson
Photo courtesy of Robin Games
<p>Growing up having done puzzles with her father and playing cards with her grandmother gave the 37-year-old founder of Robin Games a lifelong appreciating of games. She joined Jam City after working for a company that did board games. She was among the first hires by the founders and an executive and that launched Panda Pop and Cookie Jam. During her time, she watched the industry boom. Mobile gaming is projected this year to top $100 billion in sales, according to a January report by market data firm App Annie</p><p>But, what's largely been missing from gaming are women and people of color at the top ranks, she said.<br></p><p>"We're working to change that," she said. About 80% of her staff will be women. And that along with more diversity will help her team build out what she hopes is a new genre of games.</p><p>Although Wilson wouldn't reveal much about what her games will entail, she moved away from traditional warcraft and shooter games.</p>
<p>"Plenty of women love those games, including me, but what is not explored are fantasies outside of that," she said. "Why aren't there more fantasies explored in game aside from the very specific types?"</p><p>Those questions propelled her to build Robin Games, along studies that showed that the largest growth of gamers was women between 35 to 50. Many of those were looking to relieve stress with some distracting games that they were playing in between moments in their lives like standing in line at Starbucks or in between meetings.App Annie found mobile gaming is the largest portion of the industry, outpacing console players. Many of those engaging in play are popping bubbles or playing shorter games that the industry calls "casual games."<br/></p><p>"A lot of people who are gamers today don't even self identify, but it doesn't matter," Wilson said. "They're playing more than anybody else."</p>From Your Site Articles
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