By CultureBanx Team
- Black employees account for 4% of the VC workforce & Latinx VCs make up 5%
- Only 15% of VC funding goes to startups with at least one female founder
The global need to address access to capital inequities is greater than ever and it lies with putting women and investors of color in the forefront. When the venture capitalist (VC) calling the shots start to diversify, so will the capital commitments to founders of color who are shifting the paradigm and building economically solvent companies.
Why This Matters: Deloitte surveyed 203 VC firms, representing more than $149 billion in assets on their talent management practices and the results for women and people of color weren’t great. Currently, black employees only make up about 4% of the total venture capital workforce, with hispanic or latino VCs making up 5%. Those percentages are even more bleak when broken down to positions that actually make investment decisions.
Specifically when it comes to women they account for 14 % of all investment partners. The representation of women in investment positions at firms principally focused on growth and equity investment stage companies is just 10%, and a low number like this directly impacts they type of founders who receive funding. Also, an analysis by All Raise found only 15% of VC funding goes to startups with at least one female founder.
From 2009 to 2017, black women only raised $289 million, or 0.0006% of the total $424.7 billion of venture capital funding
Black women are the nation’s fastest growing demographic of startup founders and rarely receive VC funding. From 2009 to 2017, black women only raised $289 million, or 0.0006% of the total $424.7 billion of venture capital funding, ProjectDiane found.
“Women and other underrepresented founders are underestimated and undercapitalized, yet when provided with resources, network, and capital, female founders are statistically proven to outperform their male counterparts,” said Pocket Sun, Founder and Co-President of SoGal Foundation. Investors like Sun are doing more than just talking about the problem, her foundations latest global pitch competition features a majority female venture capital judging line-up.
Situational Awareness: Even though it’s been difficult for minority investors working within funds, around $370 million was reportedly raised (or planned) by black venture capitalists in 2018. Nonetheless, the lack of diversity within venture capital is something Richard Kerby from Equal Ventures has been trying to figure out. Within the industry it’s been very hard to attain, when more than 70% of venture capitalists are white, 26% are Asian and only 3% of them are black, Kerby found in his research.
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