Once again we are coming up on Y Combinator’s Demo Days, the twice-yearly ritual which brings out the best and the worst in Venture Capital. On the one hand, VC’s don’t shy away from big ideas and big disruptions, and they sometimes go to YC hunting for the next big thing. Other times it’s FOMO that’s driving their participation.
We see the same kind of bifurcation going on now with efforts to make the VC industry more diverse, welcoming and inclusive. On the one hand, there’s a scramble to look “woke” while, ironically, many of the proposed solutions are merely catching up with long-overlooked legal obligations, like having and distributing a policy on sexual harassment. (Every California employer, regardless of number of employees, is supposed to do this.)
Four initiatives along these lines are currently underway:
- The National Venture Capital Association put out model codes of conduct and policies on sexual harassment;
- #MovingForward is creating peer pressure amongst VCs to publish their harassment policies and identify a point person for complaints;
- Callisto, a non-profit focusing on campus sexual assault, is expanding is expanding to cover sexual assault and “professional sexual coercion” in VC and beyond, is asking VCs to make a 3-year financial commitment to them for public acknowledgement;
- Various VCs and women founders are holding office hours, in person or virtually, for women entrepreneurs.
Great progress? Long overdue? Important that we got this done so we can move on to finding and funding the next unicorns?
Not so fast.
As with many well-meaning efforts, just as with disruptive startups, there are often unintended consequences to these kinds of efforts. First and foremost, a focus only on gender by the VC community and, particularly, a laser focus only on extreme behavior like sexual assault, sends a resounding message that other people, groups, and behaviors are less important.
For instance, as NVCA President and CEO Bobby Franklin declared in a February 22nd statement, “I am proud to announce that NVCA today released a set of model documents and resources to help address sexual harassment in the venture industry.” This statement ignores the fact that the documents do actually address other forms of discrimination, but often as an afterthought.
#MovingForward was initiated as a way to turn a dreadful encounter and a courageous act of speaking out by Cheryl Yeoh Sew Hoy, along with Andy Coravosinto, into changing the ecosystem. Like NVCA, it includes some general language about “bias, harassment and discrimination.” signaling an intersectional lens, but the actual efforts are concentrated on gender and sexual harassment first. Policies and codes of conduct for racial bias and harassment are different, deserve their own examples, rather than just “…and harassment based on race”.
Callisto’s Jess Ladd is the type of founder that Kapor Capital has championed for years — someone underrepresented in tech who uses her own lived experience to build a tech solution to a pressing social problem. Callisto has brought technology to combat sexual assault and empower survivors to college campuses for nearly three years, and now, in the wake of revelations about sexual harassment in VC, and with the explosion of the #MeToo movement, Callisto is expanding to look at “professional sexual coercion and sexual assault” with a focus on “serial sexual predators.” But Callisto isn’t available for anyone with a complaint of racial bias or homophobic bullying or religious harassment — not even for subtle sexual harassment.
What’s Wrong with this Picture?
Similarly, most of the VC’s and women entrepreneurs’ efforts to mentor others are, in practice, severely restricted to white and Asian women by friendship networks or criteria that are themselves biased. One white woman entrepreneur recently mentioned that only women who had raised at least $2 million were going to be permitted to be mentors and that she couldn’t find any African American or Latinx women that fit the criteria. First, she clearly didn’t look at Kapor Capital’s portfolio, where such underrepresented entrepreneurs exist, and, more importantly, she didn’t realize that it’s bias itself that makes it much harder for underrepresented women of color to raise funding in the first place. Excluding the women who are already most excluded in the name of diversity? Why would anyone think that the mentors who fit their criteria have any useful advice for how to handle subtle or blatant racist treatment as founders who are black and brown experience while pitching?
We applaud and support the intentions behind each of the above initiatives, but encourage everyone to think about the consequences, unintended though they may be. For that reason, you won’t find Kapor Capital lending our name to these lists and pledges without encouraging them to do better. We know that, as the VC firm that pioneered the Founders’ Commitment in 2016, and as the only firm with a partner who co-founded the first organization focused on sexual harassment in the U.S., this may sound odd.
Here’s the deal:
We want to emphasize that it’s not enough for the VC community to sign pledges, cut and paste policies, or write checks, particularly as a substitute for an in-depth, comprehensive approach on diversity and inclusion or for taking the serious, sometimes painful steps to bring about real change in their own teams, their practices, and their relations with founders.
Specifically, we do not want to further enable the VC community to focus on gender in a way that continues to put on the back burner (or the back of the bus) issues of race, ethnicity, socioeconomic background, religion, sexual orientation and ability, for doing so would enable the continuation of a mindset which is meritocratic in name only.
(We recognize, of course, that extreme sexual harassment and sexual assault of the types that Callisto focuses on, are not gender issues per se, since non cis-gender women are certainly targets. However, the majority of sexual harassment, especially in the VC community, is male to female, and most VCs view extreme sexual assault and sexual harassment as a gender issue).
As many know, Kapor Capital has a serious focus on People Ops Tech; for the past 3 years we have sponsored a POT pitch competition looking for startups that are leveraging tech to mitigate bias. In 2017, we had 119 companies apply to pitch. A few companies over the years have focused on how to help employees speak up about bias, harassment and discrimination. We are backing one of those, tEQuitable, a for-profit startup, also in YCombinator with Callisto. We see the two companies as doing very complementary work. Every employee who feels subjected to any form of bias, harassment or discrimination — no matter how subtle and no matter on what basis — should have a safe, effective problem-solving channel as well as a formal complaint channel. Not just those subjected to sexual assault.
So, yes, cheers for the NVCA, #Moving Forward, Callisto, and women entrepreneurs and VCs who want to be part of fixing things. All too often our investment judgment is limited by our experiences. Just because you haven’t been assumed to be part of the wait staff when you’re a woman of color CEO attending an exclusive VC event, or told you’re “too early to fund” when the same firm has taken many bets on young entrepreneurs that look like the partners, doesn’t mean those events aren’t occurring. Just because asking for a raise, telling your company if you don’t get a promotion you’ll quit, barging your way into gatherings, name-dropping, sending video endorsements from celebrities or whatever tactic worked for you, doesn’t mean it will be received the same way when coming from someone whose skin color, socioeconomic background, religion, gender identity, age, accent is different than yours. The initiatives to make workplaces free from bias, harassment and discrimination must be intersectional and include everyone. The solutions cannot focus simply on gender.
VC’s — please consider:
- changing your policies and practices to identify the difference between appropriate and inappropriate behaviors, taking into account power differences, settings, and how to make it safe to speak up and get one’s concerns addressed
- diversifying your teams and your portfolio. Adopt safe, effective, fair complaint channels for all types of unfairness, and then act on the information
- understanding the different barriers faced by entrepreneurs from different backgrounds and provide mentoring that is respectful of their experiences and genuinely helpful
This would represent putting the best of VC’s enthusiasm, positive competitive spirit, and big vision behind making sure everyone has access to pitching great ideas that will change the world.
Actual progress will be when we all have teams of VC colleagues, portfolio CEOs and an ecosystem that is sufficiently diverse along every dimension from top to bottom that we’re able to empathize and focus on each other as individuals. This will take more than just good intentions. This will take real, painstaking work. Work that can be easily distracted and even derailed by feel-good quick fixes.
Our goal is real change, and “works for me” is a weak guide to making change. We should ask ourselves why we ever thought that it could be.