Venture capital takes a step in the right direction on diversity

The National Venture Capital Association (NVCA) announced Monday the formation of a task force to help its members increase opportunities for women and minorities. On the surface, this looks like just another news release by an industry under fire; but I think there is much more to it. The NVCA is providing true leadership and challenging its members to clean up their act.

I have long been critical of the venture-capital community for encouraging frat-boy behavior and tolerating the exclusionary hiring practices of companies that they have invested in. I havecalled out the CEOs of prominent venture-backed companies such as Twitter and Dropbox andsaid that a skill that VCs commonly tout, pattern recognition, is a code name for sexism and racism.

So when I received an invitation, in May 2014, to speak on the main stage at NVCAs marquee conference, Venturescape, and to be part of a discussion group on sexism in venture capital, I was dubious. I asked Venky Ganesan, who was the chair of this event and who had invited me, whether I was walking into some kind of an ambush. Ijoked on Twitterthat I felt like a hen going into the foxhouse.

I was surprised when, after I criticized their system for being male dominated and demanded that it be changed, the audience of 700 VCs cheered. They didnt deny the problem or attack me for speaking up, as a few prominent VCs have done in the past. NVCA chief executive Bobby Franklin said improving diversity in gender and race was a personal mission for him because it would improve the innovation, productivity, and performance of the companies that the venture community invested in and better the overall economy. He agreed that VC firms should be proactive in correcting their gender imbalance and disclosing diversity data, and promised to work towards making this happen.

So the intentions seem to be good. But the challenges are greater than the NVCA imagines they are. The 2011survey that they cite, which was conducted by Dow Jones VentureSource, reported that 89 percent of venture capital investors were male and 11 percent were female, and that, of these, 2 percent were African American or Latino. These self-reported data are inaccurate.

About Author

Vivek Wadhwa is Vice President of Innovation and Research at Singularity University; Fellow, Arthur & Toni Rembe Rock Center for Corporate Governance, Stanford University; Director of Research at the Center for Entrepreneurship and Research Commercialization at the Pratt School of Engineering, Duke University; and distinguished visiting scholar, Halle Institute of Global Learning, Emory University. He is author of ”The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent”–which was named by The Economist as a Book of the Year of 2012. Wadhwa oversees the academic programs at Singularity University, which educates a select group of leaders about the exponentially growing technologies that are soon going to change our world. These advances—in fields such as robotics, A.I., computing, synthetic biology, 3D printing, medicine, and nanomaterials—are making it possible for small teams to do what was once possible only for governments and large corporations to do: solve the grand challenges in education, water, food, shelter, health, and security.

Disclaimer: Please use this channel at your own discretion. These articles are contributed by our users. We are not responsible or liable for any problems related to the utilization of information of these articles.