Start-ups Seek Increased Diversity From Venture Capitalist Firms

Pui-Wing Tam reported earlier this week at The New York Times Online that, “When Trevor McFedries set out last year to raise money for Brud, his robotics and artificial intelligence start-up, he found himself in many meetings with ‘a ton of white guy’ venture capitalists.

“So Mr. McFedries, who is black, and his co-founder, Sara DeCou, a Latino woman, added a condition for investors: The pair would accept money only from venture firms that had a woman or a person of color in a position to write them a check.

“‘It was counterintuitive for us to raise money from a bunch of white guys who want to extract all the value from the world,’ said Mr. McFedries, who eventually collected several million dollars from firms that met the condition. ‘We’re interested in reshaping the way that tech looks.'”

The Times article stated that, “Mr. McFedries is one of more than 400 tech entrepreneurs and chief executives who have now banded together, in a loose coalition known as Founders for Change, to pressure the venture capital industry to diversify its ranks. The group includes Dropbox’s chief executive, Drew Houston; Logan Green and John Zimmer of Lyft; Airbnb’s chief executive, Brian Chesky; and founders of public companies such as Katrina Lake of Stitch Fix.”

The Times article also pointed out that, “In 2016, 11 percent of venture capital firms’ investment partners were women, according to a survey by the National Venture Capital Association and Deloitte. The survey found no black investment partners at venture firms, while 2 percent of investment partners were Latino.

“Venture capital firms have made some attempts to diversify their own ranks, as well as in the companies they invest in. Several high-profile Silicon Valley partnerships have recently hired female investment partners. Others have pledged to take more meetings with female entrepreneurs. To cut down on harassment, more than 40 venture firms also made their codes of conduct public this month.”

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