If you’re not investing in diverse founders, you’re a bad investor

We won’t sit here as we have for so many years with strong faces and encouraging words and pretend that we’re not tired.

We’re tired because we’ve spent yet another week mourning our Black brothers and sisters who died unjust deaths. We’re tired because we spent half of that week holding the hands of White allies as they were reminded that racism still exists and that it is, indeed, sad. We’re tired because we’re a broken record, telling firms and companies what they can do to fight racism and rarely getting the action they so emotionally promise they care about. We’re tired of holding back anger and sadness as we talk about these issues, knowing our industry isn’t even doing the bare minimum to support Black investors. On top of advising allies, mourning lives lost and working full time jobs, we also raised over $100,000. And we’re tired of racism.

Last week, BLCK VC hosted We Won’t Wait, a day of action where we called on venture firms to discuss, donate and diversify. We asked these firms to discuss Venture’s role in combating institutional racism, to donate to nonprofits that promote racial equity and to release their data on the diversity of their investment teams and portfolio founders. These are the first steps. If you haven’t done these, you’re likely not ready for “Office Hours.” So before we get ahead of ourselves, let’s address why these steps aren’t straightforward or sufficient.

Discuss. It took nationwide uprisings for many VC firms to discuss how they could combat institutional racism. Yet, 80% of firms don’t have one Black investment professional who can identify with what we go through in both our professional and personal lives. BLCK VC held its own discussion to share that perspective, centered on the experiences of Black investors and entrepreneurs.

During this discussion, Terri Burns of GV said, “when a Black person is murdered yet again by police, it is not correct to say that the system has failed, because the system was designed that way.” It is clear that systemic racism leads to the maltreatment, dehumanization and unjustified deaths of Black people across the country. Van Jones of Drive Capital drew a fitting analogy: “Being Black is like being in lane eight with a weight vest and cement boots.” Sounds uncomfortable. But that’s how every Black person in America feels stepping out of bed everyday. For Black founders, discrimination by VCs is par for the course. Elise Smith is not alone when she puts on her daily armor to allow herself to show up in the White-dominated industries of venture capital and Silicon Valley tech.

But we’re not going to repeat what they said. Because you can watch the video, and you can do the research, and you can understand the problem on your own. Truthfully, we have no interest in explaining the problem to White VCs again and again when so many of my brothers and sisters have already spoken on it. If you’d like to know why institutional racism made venture capital so homogeneous and exclusive and racist, please see here, here, here, here and here.

What we are interested in explaining is that these are just examples of what Black investors and entrepreneurs deal with everyday. For almost every Black person in tech, these examples are not only relatable, they are commonplace. These are not the stories that shock and surprise the Black community, these are the stories of the everyday. We didn’t talk about the times we heard the N-word from your colleagues or the times they said our natural hair and beards were unprofessional. We talked about the systems.

There are so many more stories and experiences out there besides what was shared by those seven voices, so please think about what perspectives are missing when you have your discussions. Not just your discussion about racism, but your discussions about the future of venture capital, and about aerospace investing, and about COVID-19 and D2C businesses, and about hiring, and about mentoring and about golf. Black voices are so often left out of the conversations where relationships are built and investment decisions are made, but discussions that lack a Black perspective are incomplete.

Donate. Many VC firms and investors spoke last week about donating their time and resources to Black entrepreneurs and investors — what an interesting way to talk about your job. Please do not donate your time or your money to Black investors or entrepreneurs.

Invest in Black founders because they’re some of the best entrepreneurs. Invest in them because they understand an issue that you do not. Invest in them for the same reason you invest in all of your entrepreneurs — because they’re good. When you frame what you’re doing as a donation, it not only demeans what these entrepreneurs are doing and perpetuates some of the most racist aspects of venture capital, but it also prevents you from understanding that you’re bad at your job. Yes, if you don’t have a diverse pipeline or a diverse portfolio you are bad at your job. Making a separate space and separate fund for Black entrepreneurs removes firms from the responsibility they have to search for, invest in and support Black founders.

If you would like to donate money, donate money to nonprofits that fight institutional racism. If you would like to donate time, volunteer. If you would like to become a better investor, figure out why your pipeline is so homogeneous and fix it.

Diversify. Let’s circle back to an important statistic: More than 80% of venture capital firms don’t have a single Black investor. This statistic is interesting because, as much as it’s about industry trends, it’s really about the failings of individual firms. Most firms don’t have a diverse investing staff. They don’t have a diverse investing staff because they don’t understand the value of racial diversity. They don’t understand the value of racial diversity because there are no diverse investors to force them to think about diversity. Rinse. Repeat.

The single most important part of diversifying a VC firm and diversifying VC broadly is tracking the lack of diversity. Most firms do not routinely track data on their investor, deal pipeline, event or investment diversity. As a result, they rarely think about racial diversity. This is where we ask firms to start. Yes, mentorship can be helpful, office hours can be helpful, but if you’re not tracking your firm’s diversity metrics, they will not improve.

What now? Okay, you’ve discussed racism with your partners, you’ve donated money to nonprofits and you (hopefully) started tracking the diversity of your firm. Now what? Racism resolved? Probably not.

Hopefully these conversations made you realize where your firm’s specific shortcomings are, and you have to address those. Most firms will realize they have a pipeline problem, so start there. Do all of your events, dinners and programs have Black representation? When you’re trying to fill an investor role, did you post the job on your website and in different Black online communities? Did your final round of candidates reflect the diversity of our country? Did you support the diverse investors you already employ so they don’t feel disadvantaged, under-advocated and left out? When you’re trying to write new checks, did you utilize Black scouts and consider businesses that don’t address you directly?

When you’ve done all of that, ask yourself this: When the protests quiet down, and articles about racial oppression aren’t at the top of your timeline, what will you be doing? Don’t let it just be office hours. Don’t let the enormity of the work ahead paralyze you against taking action now. Your actions matter. Your inaction matters.

The resilience of the Black community is unparalleled. That resilience means that no matter how tired we are, we will still fight to change this country and to change this industry. It means that no matter how many times we don’t want to advise allies, we will. And it means that no matter how many times we face oppression and mourn for our brothers and sisters, we will still rise to the challenges. And while the stories of overt racism and microaggressions will continue, so too will our drive to move forward and our action to break down barriers. We will continue to build a home for ourselves in this industry. We will continue to work to ensure that Black Lives Matter.