Building a More Inclusive Entrepreneurial Ecosystem An overview of the organizations that have made great strides in advancing inclusion 1 | National Venture Capital Association Building A More Inclusive Entrepreneurial Ecosystem Building a More Inclusive Entrepreneurial 4 Building A More Inclusive Entrepreneurial Ecosystem by Bobby Franklin, NVCA President & CEO Ecosystem 5 Letter from NVCA Diversity Task Force Co-Chairs 7 Highlights from 2015 7 NVCA Diversity Pledge A review of the organizations and individuals Commitments to Advancing Inclusion leading the way with action 8 20 Office Hours for Entrepreneurs FROM THE NATIONAL VENTURE CAPITAL ASSOCIATION 21 18th Annual Rainbow PUSH Wall Street Project Economic Summit 22 NVCA Diversity Task Force Workshop 23 NVCA at PUSHTech2020 Summit 24 Insights 25 CrunchBase: Female Founders Report 26 Richard Kerby, Venrock: Who is a VC? 28 Calvin Cooper, NCT Ventures: National Survey on Access to Capital Among Certified Minority Businesses 30 Changemakers and Pioneers 30 The Toigo Foundation 31 Bridging the Gender Gap 33 The U.S. Small Business Administration 35 JumpStart Inc. 35 The Ohio Third Frontier 36 Intel Capital Diversity Fund 38 Glassbreakers 41 Camelback Ventures 42 BUILDUP 44 Hackbright Academy 45 StudentDream 46 UNCF 48 MergeLane 50 U.S. Department of Commerce Office of Innovation and Entrepreneurship 52 If We Can Make A Difference Here, We Can Make It Anywhere by Kate Mitchell Building A More Inclusive Entrepreneurial Ecosystem By Bobby Franklin, President & CEO of the National Venture Capital Association The U.S. is home to a dynamic CrunchBase, Page Mill Publishing, Dow and powerful entrepreneurial Jones VentureSource, and many others ecosystem. Entrepreneurs and the have prompted a new level of transparen- venture capital industry create and cy around the lack of diversity in innova- grow ideas that transform the lives of tion and contributed to a greater focus on people across the globe. Since joining improving opportunities for women and the National Venture Capital Association underrepresented minorities. (NVCA) in 2013, I have been squarely fo- cused on our mission to foster the growth When we started the Diversity Task of the U.S. entrepreneurial ecosystem. Force, we focused on two key goals: Our team at NVCA works to achieve our understanding the challenges facing mission by promoting public policies that women and underrepresented minorities, spur innovation, developing new research and developing resources to foster a on the ecosystem and leading initiatives more inclusive venture capital industry. that benefit entrepreneurs and investors We prioritized outreach to diverse groups that support new ideas. of entrepreneurs, investors, academics, nonprofit leaders and policymakers to Core to the growth of the entrepre- hear their unique points of view on the neurial ecosystem is tackling the lack of obstacles hindering diversity in the en- women and underrepresented minorities trepreneurial ecosystem. We heard from in the innovation ecosystem. A diver- every constituency that the lack of oppor- sity of backgrounds, experiences and tunity stems from an absence of connec- perspectives fosters the advancement tions among groups, which contributes to of groundbreaking ideas. The lack of di- a lack of access to networks and capital. versity across the innovation ecosystem is NVCA is committed to building new an enormous challenge for the competi- connections among investors, entre- tiveness of the entrepreneurial ecosystem preneurs and others participating in the and the U.S. economy. entrepreneurial ecosystem. In 2014, our Board of Directors and We are publishing Building A More team launched the NVCA Diversity Inclusive Entrepreneurial Ecosystem, Task Force to help build a more inclusive an overview of NVCA’s diversity work innovation ecosystem. We are focused and the organizations that have made on contributing to a shift that we hope great strides in advancing inclusion over will yield results over the long term. As the past year. We are focused on building numerous studies over the past several resources, programs and practices that years have shown, the number of women will support greater diversity within the and underrepresented minorities in lead- venture capital industry. Every venture ership roles in venture capital firms and capital firm, no matter its size, can make a raising venture capital as entrepreneurs is difference and take action. far too low. Studies from Babson College, 4 | National Venture Capital Association Building A More Inclusive Entrepreneurial Ecosystem Letter from NVCA Diversity Task Force Co-Chairs by Kate Mitchell and Ashton Newhall Diversity is core to competitiveness and to increase diversity in the innovation Diversity is core to the competitiveness ecosystem. One of the first actions we took of the U.S. venture capital industry. The after the formation of the Task Force was to mission of venture capital investors is to further diversify the makeup of the NVCA partner with the most promising entrepre- Board itself by increasing the number of neurs to turn innovative ideas into success- women and minority board members. ful companies. The innovation ecosystem cannot perform at its best if it does not In 2015, 45 NVCA members announced include all promising talent, regardless of a pledge to take concrete measures to bring their background. While entrepreneurs greater diversity to the industry. These 45 continue to prove Moore’s law of expo- firms have over $112 billion collectively in nential improvement, the venture capital assets under management and nearly 7,000 industry has not kept pace in investing portfolio companies, demonstrating the in people of diverse backgrounds. For significant resources and broad network example, the Babson College 2014 Diana by which our efforts are supported. At Project study found that only 2.7 percent Greenspring Associates, we have adopted of venture-backed companies have a our own version of the National Football woman CEO. The same report noted that League’s Rooney Rule. At Scale Venture only 6 percent of the partners of venture Partners, we contribute a minimum of 20 capital firms were women. The importance hours a month as faculty for educational of diversity extends well beyond race and programs targeted at women. gender to include veterans, members of the LGBTQ community, persons with dis- Investors that value inclusiveness abilities, immigrants and others who have will lead the way been underrepresented as entrepreneurs We believe that the venture capital firms and investors. that recognize the competitive value of investing in women and minority founders We must act with intention and bringing diverse talent into their Building a more diverse startup ecosystem investment teams will lead the way. is not an issue that will solve itself. If the Expanding their reach for the most quali- venture capital industry is committed to fied talent across diverse communities will supporting diverse talent, we must act only increase their likelihood of success. with intention in order to expand our Last year, venture capital investors invested networks, to engage with a new popultion almost $60 billion in more than 4,400 of entrepreneurs, to market our firms in startups. Even in this active investing new ways in order to welcome women climate, there remains an enormous, and underrepresented minorities into our untapped opportunity to support and firms and portfolios. invest in diverse entrepreneurial talent. This opportunity belongs to the firms that At NVCA, we believe in leading the aggressively pursue and foster the best, way with action. In December of 2014, brightest young talent in their teams and the NVCA Board of Directors officially in their portfolios. launched the Diversity Task Force to empower venture capital firms and entrepreneurs to build cultures of inclusion 5 Letter from NVCA Diversity Task Force Co-Chairs Kate Mitchell, Scale Venture Partners · Amy Millman, Springboard · Alejandro Guerrero, Corporate Development Executive · Jason Howard, GCM Grosvenor · Sue Siegel, GE Ventures · Jon Callaghan, True Ventures Impact begins with Taking our inspiration from entrepreneurs, firm leadership we believe in open sourcing what we are We are committed to establishing learning and iterating to success. We have leadership within the venture community been privileged to work with leaders in to pursue our core mission of advancing the inclusion and diversity community people of different genders, races, orien- who have taught us and welcomed us into tations, socioeconomic groups, geogra- the conversation. phies and talents who desire to build and invest in high-growth companies. We We are now collaborating with them on began the Diversity Task Force together how we can best serve the diverse talent with the NVCA Board of Directors that will contribute to our industry’s success to provide a platform for the venture in the future. We are eager to continue capital community to engage, learn from working with all of you in the coming years and collaborate with the multitude of to drive greater impact and bring greater stakeholders who are paving the way for a benefit to the innovation ecosystem. transformation in the way the innovation ecosystem works. Kate Mitchell Co-founder and Partner, Over the past several years, venture Scale Venture Partners capital firms have had to answer important Foster City, California questions about the lack of women and minorities on their teams and in their Ashton Newhall