Underrepresented Minorities In Startups And Investing
Yesterday, I wrote a post about “women, minorities, startups, and investing.” I expected it to drum up some discussion, and though it took some time, it did today. I’m using these blogs and conversations on Twitter as a chance to learn. It’s not easy. What I’m learning so far is often obvious but worth repeating. One, lumping “women and minorities” works but only up to a point. I’ll use “URM” now to talk about “underrepresented minorities,” which are mainly blacks and latinos/as, among others. For women, though I’m starting to personally see more female founders and investors, most of them are white or of Asian descent. Where I think I can add a small bit of leverage and maybe make a difference would be related to URM, so that’s what I’ll focus on.
What Do Basic Demographics Say?
Some of this stuff is obvious but worth writing out. While the U.S. is evenly split on gender (about 50.8% females, but growing), census data shows 77.7% who are white, 17.1% who are Hispanic or Latino/a, about 13% who are black, about 5.3% who are Asian. According to PEW, both Hispanic and Asian population rates have been growing in America, but for different reasons — increased birth rate for Hispanics, and immigration for Asians. The black population in America has been growing just a tad faster than the overall population, while Latinos are growing so fast in some areas, they’ll surpass whites in total population — see California. [Outside America, of course, with mobile platforms growing like weeds and new ones like Xiaomi on the rise, entrepreneurs worldwide can now “go global” a lot faster and attack markets far away from home.]
What Are The Key Arguments?
I’ve heard many great arguments as to why the current financing setup doesn’t work for all parties. Too many to list here, so I’ll try to summarize the best ones here in the spirit of getting to quick agreement and hopefully action below. First, investors love large, growing, dynamic markets, so if that holds (which is certainly true), then at minimum, the Latino growth rate points to a massive market and network (again, obvious) and a huge number of black citizens which jointly represent enormous buying power. Second, most private venture investment which happens early at the seed stage involves people with money or small funds (like me) who meet people through networks, referrals, and groups — however, at least in the Valley, which is not racially diverse in the technology sector, and since most investment seems to happen locally (I know I prefer to invest locally), it’s hard to even see URM founders, let alone investors. As a result, we have to actively seek them out, outside already formed networks and probably outside the geography.
What Can I Do In My Capacity?
I have spent the last 24 hours trying to come up with concrete ideas of things I can do. I am a small investor (writing $25,000 checks) but try to catalyze investment rounds when I have conviction. My personal preference when investing very early in people I don’t know personally is to get to know them over time. I have done this with 5-6 founders with whom I had no connection to, and after a few months, I got to a point of conviction. I write a lot here and on Twitter, though I don’t have a big platform — for any random post I write here, on average it generates about 1,000 page views. Not bad, but it ain’t going to move the needle.
So, what am I going to do? I’m open to suggestions, but so far, I’ve thought of the following: (1) I’m going to focus on URM and to start, created a public Twitter list called “URM” and will start adding to this aggressively (Link to my URM Twitter List. It’s small right now, but please forgive me as I’ll add to it over the next few days. I’m going out to run an errand now but will get back to it). My hope here is that I’ll listen and learn the landscape over time and hopefully make some new friends. I don’t have much of a social life these days but Twitter is a great place to meet people, I’m convinced of that. (2) I’d be happy to work with any conference organizer on making sure larger, open events have a URM-style carve-out or scholarships for people to attend. I know first-hand it’s hard to get parity up on stage with panelists and while the crowds are getting more diverse at events. Maybe the solution is like an “Intel Inside” sticker but one for URM at events. (3) While I stopped Sunday Conversations, I’d be happy to partner with someone on a podcast series focused on URM. I don’t want to commit to this myself given my schedule this year, but I will happily work with someone who cares about this, has demonstrable podcast experience, and set up the show for success. I want to involved in shaping it, so please consider this an open invitation to get in touch.
Finally, as a very small and usually inconsequential investor who has little to no leverage and doesn’t even get pro rata rights in rounds, people in the conversation over the last 24 hours encouraged me to simply state that I will fund URM-led companies. I feel weird writing that because, shit, of course I would (and have)! It never crossed my mind that I should state it publicly, but one, the life of startups and investing invariably involves a ton of “no’s” as answers, as frustrating as that is, and those “no’s” come for a variety of reasons that are fair and unfair; two, that doesn’t mean any and all pitches with me will end with a “yes” because I tend to be a picky person, but all I care about is meeting dynamic people who have already started something that is being used. I would prefer to meet new people without the pressure of an investment decision. My email is listed on my site and I’m quite open about my interests, networks, and style. Hope to meet you soon.