A study of venture-backed deals over the last five years reveals that 77.1% of venture-backed founders were white, 1% black and 9.2% startup founders


Maybe the VC community is tired of hearing about this; Of course, there are many people who are fed up with taking care of it. And yet, the funding landscape for minority and women-owned startups continues to be depressed.

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In fact, most venture-backed startups are "still predominantly white, male, have been educated at the Ivy League and are based in Silicon Valley," according to a recent study conducted jointly by RateMyInvestor and DiversityVC .

Other key findings of the report, which examined publicly-funded venture capital transactions over the last five years and interviewed over 10,000 founders:

  • 77.1% of the founders were white, regardless of gender and education.
  • Only one percent of founders supported by venture capital were black.
  • Startups funded by women received only 9% of investments.
  • While many venture capitalists have publicly stated that they are working on diversity initiatives, this dialogue is "only lip service," said Anthony Zhang, Growth Manager of RateMyInvestor.

    Those in trenches seeking venture capital echo the findings of the report, with some industry advocates saying that responsibility is particularly hard on women.

    "A lot of the pressure is on women to solve this very rooted problem, and it will not work. As women, we can not solve the problem of this industry where, frankly, the goalkeepers are dominated by men, "said Allyson Kapin, founder of Women Who Tech, based in Washington, DC, a non-profit organization. lucrative focus on promoting women in technology. Kapin is also the founder of Rad Campaign, a website design company that works with non-profit and "socially responsible" companies.

    What we see is that we talk a lot, but very little action

    "It's up to the investment community in general to deliberately bring in relationships and, ultimately, fund more women-run startups …", she told Crunchbase News. "We've had promises of diversity and a ton of media coverage, but what we're seeing is a lot of talk, but very little action."

    In an effort to help women in technology, Kapin – along with Craig Newmark (founder of Craigslist and Craig Newmark Philanthropies) – launched the annual Women Startup Challenge to address funding disparity venture capital invested by women in innovation.

    There, but neglected

    The lack of various founders is not a pipeline problem. In fact, there are many women and people of color who are starting high-potential, viable businesses, said Brittany Davis, director of transactions at Backstage Capital, a venture capital firm investing in women, people of color and the LGBT founders.

    Brittany Davis, photo credit: Conor McCabe Photography

    "Our investment team has thousands of founders of promising underrepresented startups seeking capital every year. The opportunity to tap into a more diverse founding pool is real, "she told Crunchbase News.

    For its part, Backstage Capital has so far invested in 100 companies, launched an accelerator and created the "It's About Damn Time" fund, a $ 36 million start-up investment vehicle for founders under -représentés.

    "So, the founders are out there, but most VCs simply do not look," Davis said. "And even when the funds meet more diverse founders, they often do not see the opportunity, whether because the founder or their company does not fit into the box of what they believe will be successful."

    The human cost

    The report reflects more than just a lack of cash for this segment of founders, but it also indicates what some founders live on a personal level.

    "I am conditioned to know that my sex will be a problem," said VC veteran Farah Papaioannou. "I expect it to happen with customers in male-dominated industries such as oil and gas, but venture capital firms are the most problematic, in my opinion."

    Farah Papaioannou, photo credit: Edgeworx

    Papaioannou is also a co-founder of Edgeworx, a young, state-of-the-art computer company based in Silicon Valley, where she remembers VCs talking about "passing" her at meetings or speaking only to its co-founder, Kilton Hopkins.

    "At one point, a person directly asked me why I was at the meeting," she told Crunchbase News. "Fortunately, I have the best co-founder for these issues. Where I am used to, he would be outraged and refuse to take money from VCs like that. "

    I've been conditioned to know that my sex will be a problem

    Although most startups want to earn money whenever they can, Papaioannou said the principles play a bigger role for his team than the dollar signs. Example: During her pregnancy, she found it necessary to hide the fact that she expected until her co-founder and herself decided not to want investors who would have a problem with that.

    "I gave birth to my son and closed our first client the same day, so my pregnancy was not a problem," she said. "In fact, my son is an extra motivation."

    Back to reality, fatigue linked to diversity

    According to Joah Spearman, co-founder and CEO of the online Travel Guide Localeur in Austin, some VCs may be tired of reading stories about lack of diversity and inclusion in technologies.

    "No VC will publicly say that he is fed up with this story, but his actions confirm that it 's not something that they deal with with the kind of thing that' s going on. Urgency that they would require companies in their portfolio for them to apply monetization, hiring or growth strategies, "Spearman told Crunchbase. New.

    This story will only disappear, he said, when people in a position to change the course of action will take action and that venture capital as an institution gives priority to adding of general color partners and risk partners in their new funds, in addition to addressing addressing – the subconscious bias that continues the negative cycle.

    Until then, reports like this one will continue to highlight the differences that are going on.

    Note: This story has been updated to more accurately reflect the numbers cited in the report.