7 ms·

Venture capital firms to include “diversity riders” in term sheets

cryptixvi 6y ago
Aside from arbitrary virtue signaling and moral grand standing, what's the point? $1 is $1 no matter which pocket it comes from. Also, this would be introducing discrimination based on immutable traits - two steps backwards there guys...
- klyrs 6y ago
  > $1 is $1 no matter which pocket it comes from. For all the uproar about Chinese ownership of tiktok, zoom, etc etc, I suspect that your assessment is a minority opinion here.
  - cryptixvi 6y ago
    For sure, but that CCP $ isn't really what is at play here. Given the option to accept local investment vs. foreign in a competition, the entity receiving the cash would be able to make a choice based on their own values. Anecdotally, British Columbia real estate is actively rejecting Chinese investment on similar grounds.
  - BobbyJo 6y ago
    If you drop all context sure. I'm sure no one here would take investment money from a resurrected Hitler, Narcos, or the Mob, but, since the discussion is about race, it's kind of an orthoginal point.
    - klyrs 6y ago
      It's not. Folks have ethics about who they take their money from. I agree, it's not the same, but a dollar isn't just a dollar. Who it's coming from, and what their ethics are, do actually matter. In this case, I see that minorities are underrepresented in startups. Insomuch as it's all about who you know, there's strong reinforcement of systemic trends of enriching primarily white men. Diversity at the top unlocks hidden talent in their networks and overlooked markets, so picking folks to maximize cultural competency is kind of a no-brainer.
- skitout 6y ago
  Well, invstors unconscious bias against Black people, against woman and many other (and unconscious positive discrimination of White and Asian men) is hurting the tech ecosystem [1] [2] which isn't good either for current VC and for the society in general. This action helps the VC to get more fair... and better investors (this is good for their economic performances). Then this can have a positive impact on the tech sector and the whole society... [1] https://www.forbes.com/sites/forbesnonprofitcouncil/2018/02/15/founders-and-venture-capital-racism-is-costing-us-billions/ https://www.forbes.com/sites/forbesnonprofitcouncil/2018/02/... [2] https://hbr.org/2017/05/we-recorded-vcs-conversations-and-analyzed-how-differently-they-talk-about-female-entrepreneurs https://hbr.org/2017/05/we-recorded-vcs-conversations-and-an...
Taikonerd 6y ago
Huh. Looking at the headline, I had thought that this would mean, "we'll fund your startup, if you agree to meet these diversity hiring targets." But if I'm reading the article correctly, it actually means, "we, the VCs, will try to have more diversity among the people writing the checks."
- pmiller2 6y ago
  Of the handful of comments currently posted, yours is the only one that shows evidence of actually having read the article. Personally, I think it's a good thing that VC funds are trying to include people from underrepresented groups into their club. At least, I hope that's what they're doing, because all this "best effort" language basically means they're not really obligated to do anything.
- Eridrus 6y ago
  To be a bit more cynical it seems to be saying something closer to "we want to look upstanding, so please go do the work for us because we couldn't diversify our own firm"
- Nasrudith 6y ago
  The real beneficiary is that they will reap the benefits from the success but well, VCs are either well off already or reckless. It may technically sway the statistics of the upper ends distribution ans shows it isn't a defacto ethnic segregation but means about as much as Queen Victoria to the status of women. Technically a good thing but not very relevant to most of the minority.
throwawaysea 6y ago
We need to stop introducing artificial racist/sexist affirmative action policies and instead stick to including people based on merit. The injection of this ideology everywhere is pernicious, unnecessary, and discriminatory.
- jtsiskin 6y ago
  Although hopefully becoming weaker over time, people still hold biases against different groups. Until these biases don’t exist it makes sense to be aware of them and try to correct
  - baskire 6y ago
    what is racism? To me giving someone a benefit due to their skin color is racist. Affirmative action is racist in nature. A good test is to replace the race with “white European”. And if the statement offends it’s racist.
    - skitout 6y ago
      Do we agree that current VC, mostly because of unconscious bias, are racist and sexist ? Then what do you suggest to change this situation ? I am not super comfortable with counsious positive discrimination as a momentary tool to correct a discriminatory situation (with negative impact on the whole society), but it is hard to imagine solutions without using this tool.
      - baskire 6y ago
        My belief comes from personal experience. That social mobility is alive and well but can take multiple generations. There’s Plenty of VCs who came from poverty, who’s parents came from poverty, or who’s grandparents came from poverty. When looking at that Kind of timescale from 1920s till now, I don’t believe the system has had enough time. Civil rights, racial rights, and gender rights are relatively new concepts. My belief is over the next 30-50 years the forces of market capitalism will address the issue.
seibelj 6y ago
I love how everyone uses throwaways in these comments because they know any deviation from the progressive-left line will get them cancelled! I’ll say it under my name - I’m completely old fashioned and probably racist / sexist / *-phobic whatever because I still agree with Martin Luther King that it is morally correct to judge someone by the content of their character rather than the color of their skin. I’m so totally backwards! I meet someone new and have a blank slate no matter what color they are or what they look like! I do this intensely regressive thing where I listen to what they have to say and judge them by their words and actions. I know, very evil and wrong of me, but I can’t help it - I still like Martin Luther King!
- eaurouge 6y ago
  We all carry biases, including towards/against groups we wouldn't expect to be biased towards/against. We probably all start with blank slates, but, unless you've had zero interactions with the outside world, you'd have to work actively to retain that blank-slate outlook. In aggregate, we run the risk of collectively creating various forms of systemic bias. We can test for these systemic biases (we have) and prove the existence/non-existence of said biases (we have).
  - throwawaysea 6y ago
    > We can test for these systemic biases (we have) How do you propose testing this? Typically, a difference in outcomes is taken as evidence of systemic bias, but it isn't the same thing. For example, if one cohort commits more crimes, they are going to have more police interactions, more arrests, and so forth. But that's not a systemic bias. Unfortunately the recent "anti-racist" authors like Ibram Kendi have been pushing a false and expansive definition, where they term any difference in outcomes (or as they put it, any racial inequity), as "racist". That's not what most people would call "racist". > prove the existence/non-existence of said biases (we have) As for the existence of biases, I assume you are referring to the 'implicit association test', which is commonly used as a tool to identify unconscious biases. The IAP methodology has been challenged and debunked many times. Studies have also found that measures of implicit bias do not predict how people act in real life. See https://newdiscourses.com/2020/06/flaws-white-fragility-theory-primer/ https://newdiscourses.com/2020/06/flaws-white-fragility-theo... for more.
RobPfeifer 6y ago
I’m all for this (meaning bringing diverse co-investors into rounds). I’d add that as entrepreneurs we should add LP riders when doing rounds (where’s your money from?!). Can’t say I know all these funds super well - they’re not big names outside of a couple - but helping diverse co-investors build track records is a good idea on a bunch of levels. It’s all friends and family anyway. I will say that Greycroft is one of the few funds who I respect deeply in how they operate and don’t treat “diversity” as an add-on. They’re just a really smart group of people, that I’ve enjoyed every interaction with, that actually have a diverse set of experiences and interesting points of view And investment theses that scale across diverse sociopoltifla outcomes. Novel I know! I see a few misguided comments here not worth responding too about “merit” and what not. I’ll deal with your anguish if you make a point of it, but please bring some original thought, non-anecdotal or not-bad research cause I feel like I’m reading a bad /r/* thread in the below.
- raxxorrax 6y ago
  We have recent proof that educational institutions actually discriminate against white and asian pupils. Your wording suggests animosity, so why would you believe you are less biased than anyone else? Perhaps you are biased because you spend time on reddit, I wouldn't hold it against anyone, but original thought doesn't make an appearance in this discussion.
  - RobPfeifer 6y ago
    I believe that discrimination narrative is largely based on test scores. Which are, and it took me decades to come around to this, fairly biased. Outcomes have been shown to be pretty equal regardless of relative experience (and comparable ability) pre-college. And I’m less biased cause I’ve seen more and made pretty much every mistake a high test-score, arrogant white or Asian guy can make :).
sashok_bg 6y ago
Actions and articles like these are openly promoting discrimination and racism. We live in a postmerital distopia.

Aside from arbitrary virtue signaling and moral grand standing, what's the point? $1 is $1 no matter which pocket it comes from. Also, this would be introducing discrimination based on immutable traits - two steps backwards there guys...

klyrs 6y ago
> $1 is $1 no matter which pocket it comes from. For all the uproar about Chinese ownership of tiktok, zoom, etc etc, I suspect that your assessment is a minority opinion here.
- cryptixvi 6y ago
  For sure, but that CCP $ isn't really what is at play here. Given the option to accept local investment vs. foreign in a competition, the entity receiving the cash would be able to make a choice based on their own values. Anecdotally, British Columbia real estate is actively rejecting Chinese investment on similar grounds.
- BobbyJo 6y ago
  If you drop all context sure. I'm sure no one here would take investment money from a resurrected Hitler, Narcos, or the Mob, but, since the discussion is about race, it's kind of an orthoginal point.
  - klyrs 6y ago
    It's not. Folks have ethics about who they take their money from. I agree, it's not the same, but a dollar isn't just a dollar. Who it's coming from, and what their ethics are, do actually matter. In this case, I see that minorities are underrepresented in startups. Insomuch as it's all about who you know, there's strong reinforcement of systemic trends of enriching primarily white men. Diversity at the top unlocks hidden talent in their networks and overlooked markets, so picking folks to maximize cultural competency is kind of a no-brainer.
skitout 6y ago
Well, invstors unconscious bias against Black people, against woman and many other (and unconscious positive discrimination of White and Asian men) is hurting the tech ecosystem [1] [2] which isn't good either for current VC and for the society in general. This action helps the VC to get more fair... and better investors (this is good for their economic performances). Then this can have a positive impact on the tech sector and the whole society... [1] https://www.forbes.com/sites/forbesnonprofitcouncil/2018/02/15/founders-and-venture-capital-racism-is-costing-us-billions/ https://www.forbes.com/sites/forbesnonprofitcouncil/2018/02/... [2] https://hbr.org/2017/05/we-recorded-vcs-conversations-and-analyzed-how-differently-they-talk-about-female-entrepreneurs https://hbr.org/2017/05/we-recorded-vcs-conversations-and-an...

Taikonerd 6y ago

Huh. Looking at the headline, I had thought that this would mean, "we'll fund your startup, if you agree to meet these diversity hiring targets." But if I'm reading the article correctly, it actually means, "we, the VCs, will try to have more diversity among the people writing the checks."

pmiller2 6y ago
Of the handful of comments currently posted, yours is the only one that shows evidence of actually having read the article. Personally, I think it's a good thing that VC funds are trying to include people from underrepresented groups into their club. At least, I hope that's what they're doing, because all this "best effort" language basically means they're not really obligated to do anything.
Eridrus 6y ago
To be a bit more cynical it seems to be saying something closer to "we want to look upstanding, so please go do the work for us because we couldn't diversify our own firm"
Nasrudith 6y ago
The real beneficiary is that they will reap the benefits from the success but well, VCs are either well off already or reckless. It may technically sway the statistics of the upper ends distribution ans shows it isn't a defacto ethnic segregation but means about as much as Queen Victoria to the status of women. Technically a good thing but not very relevant to most of the minority.

throwawaysea 6y ago

We need to stop introducing artificial racist/sexist affirmative action policies and instead stick to including people based on merit. The injection of this ideology everywhere is pernicious, unnecessary, and discriminatory.

jtsiskin 6y ago
Although hopefully becoming weaker over time, people still hold biases against different groups. Until these biases don’t exist it makes sense to be aware of them and try to correct
- baskire 6y ago
  what is racism? To me giving someone a benefit due to their skin color is racist. Affirmative action is racist in nature. A good test is to replace the race with “white European”. And if the statement offends it’s racist.
  - skitout 6y ago
    Do we agree that current VC, mostly because of unconscious bias, are racist and sexist ? Then what do you suggest to change this situation ? I am not super comfortable with counsious positive discrimination as a momentary tool to correct a discriminatory situation (with negative impact on the whole society), but it is hard to imagine solutions without using this tool.
    - baskire 6y ago
      My belief comes from personal experience. That social mobility is alive and well but can take multiple generations. There’s Plenty of VCs who came from poverty, who’s parents came from poverty, or who’s grandparents came from poverty. When looking at that Kind of timescale from 1920s till now, I don’t believe the system has had enough time. Civil rights, racial rights, and gender rights are relatively new concepts. My belief is over the next 30-50 years the forces of market capitalism will address the issue.

seibelj 6y ago

I love how everyone uses throwaways in these comments because they know any deviation from the progressive-left line will get them cancelled! I’ll say it under my name - I’m completely old fashioned and probably racist / sexist / *-phobic whatever because I still agree with Martin Luther King that it is morally correct to judge someone by the content of their character rather than the color of their skin. I’m so totally backwards! I meet someone new and have a blank slate no matter what color they are or what they look like! I do this intensely regressive thing where I listen to what they have to say and judge them by their words and actions. I know, very evil and wrong of me, but I can’t help it - I still like Martin Luther King!

eaurouge 6y ago
We all carry biases, including towards/against groups we wouldn't expect to be biased towards/against. We probably all start with blank slates, but, unless you've had zero interactions with the outside world, you'd have to work actively to retain that blank-slate outlook. In aggregate, we run the risk of collectively creating various forms of systemic bias. We can test for these systemic biases (we have) and prove the existence/non-existence of said biases (we have).
- throwawaysea 6y ago
  > We can test for these systemic biases (we have) How do you propose testing this? Typically, a difference in outcomes is taken as evidence of systemic bias, but it isn't the same thing. For example, if one cohort commits more crimes, they are going to have more police interactions, more arrests, and so forth. But that's not a systemic bias. Unfortunately the recent "anti-racist" authors like Ibram Kendi have been pushing a false and expansive definition, where they term any difference in outcomes (or as they put it, any racial inequity), as "racist". That's not what most people would call "racist". > prove the existence/non-existence of said biases (we have) As for the existence of biases, I assume you are referring to the 'implicit association test', which is commonly used as a tool to identify unconscious biases. The IAP methodology has been challenged and debunked many times. Studies have also found that measures of implicit bias do not predict how people act in real life. See https://newdiscourses.com/2020/06/flaws-white-fragility-theory-primer/ https://newdiscourses.com/2020/06/flaws-white-fragility-theo... for more.

RobPfeifer 6y ago

I’m all for this (meaning bringing diverse co-investors into rounds). I’d add that as entrepreneurs we should add LP riders when doing rounds (where’s your money from?!). Can’t say I know all these funds super well - they’re not big names outside of a couple - but helping diverse co-investors build track records is a good idea on a bunch of levels. It’s all friends and family anyway. I will say that Greycroft is one of the few funds who I respect deeply in how they operate and don’t treat “diversity” as an add-on. They’re just a really smart group of people, that I’ve enjoyed every interaction with, that actually have a diverse set of experiences and interesting points of view And investment theses that scale across diverse sociopoltifla outcomes. Novel I know! I see a few misguided comments here not worth responding too about “merit” and what not. I’ll deal with your anguish if you make a point of it, but please bring some original thought, non-anecdotal or not-bad research cause I feel like I’m reading a bad /r/* thread in the below.

raxxorrax 6y ago
We have recent proof that educational institutions actually discriminate against white and asian pupils. Your wording suggests animosity, so why would you believe you are less biased than anyone else? Perhaps you are biased because you spend time on reddit, I wouldn't hold it against anyone, but original thought doesn't make an appearance in this discussion.
- RobPfeifer 6y ago
  I believe that discrimination narrative is largely based on test scores. Which are, and it took me decades to come around to this, fairly biased. Outcomes have been shown to be pretty equal regardless of relative experience (and comparable ability) pre-college. And I’m less biased cause I’ve seen more and made pretty much every mistake a high test-score, arrogant white or Asian guy can make :).

sashok_bg 6y ago

Actions and articles like these are openly promoting discrimination and racism. We live in a postmerital distopia.