2020: A Turning Point for Diversity in Venture Capital?
The killing of George Floyd in May 2020 sparked nationwide protests and forced corporate America—including venture capital firms—to confront systemic inequities. While diversity pledges have historically yielded little action, 2020 may prove different. Here’s why.
The State of Diversity in VC: A Grim Reality
Despite years of discussion, venture capital remains overwhelmingly homogeneous:
- Gender disparity: As of February 2020, 65% of VC firms had no female partners (All Raise).
- Racial inequity: In 2018, 81% of firms lacked a single Black investor (Equal Ventures).
- Leadership gaps: Only 12.4% of U.S. VC decision-makers were women in early 2020, while Black investors held just ~2% of senior roles (PitchBook, NVCA).
Two Game-Changing Developments in 2020
1. Yale’s Diversity Mandate for Asset Managers
Yale’s $32 billion endowment—led by influential investor David Swensen—announced it would hold money managers accountable for diversity progress across hiring, training, and retention. Given that institutional investors (pension funds, endowments, etc.) supply most VC capital, this could catalyze industry-wide change.
Why it matters: As Lo Toney of Plexo Capital noted, imagine the impact if pension funds like CalPERS (serving 1.6 million diverse employees) demanded accountability from VCs.
2. SoftBank’s $100M Opportunity Growth Fund
In June, SoftBank launched a fund exclusively for Black, Latinx, and Native American founders. Though modest compared to its $100B Vision Fund, it’s the largest such commitment to date. Key insights from SoftBank COO Marcelo Claure:
- Pipeline strength: Received 700+ business plans, funded 20 startups (80% first-time founders).
- Industry influence: SoftBank’s past funds (e.g., $5B Latin America fund) spurred compe*****s like Sequoia to follow suit.
The prediction: Claure expects traditional VCs to replicate diversity-focused funds soon, especially as SoftBank-backed startups prove successful.
The Road Ahead
While systemic change takes time, 2020’s institutional shifts—from Yale’s mandate to SoftBank’s fund—suggest momentum is building. The question now: Will 2021 see these promises translate into measurable progress?
For deeper insights, watch SoftBank’s discussion with Marcelo Claure, Stacy Brown-Philpot, and Paul Judge here (original interview link).
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