BLCK VC is on a mission to double the number of Black venture capitalists out there by 2024. The reason behind it shouldn't need explaining — only 2% of all partner-level VCs are Black, and 81% of VC firms don't have a single Black partner. It's no surprise then, that the startup ecosystem that is built underneath the VC community is sadly and drastically homogeneous.
We sat down with BLCK VC co-founder and co-chair Sydney Sykes on an episode of Extra Crunch Live to talk about the ongoing protests, the state of the VC industry with regard to diversity and inclusion, and actionable insights and strategies around how we can be more inclusive across all facets of the tech ecosystem.
Because we believe this is a critical conversation to have and engage with, we've made this episode and the complete Q&A free.
Below, you'll find a lightly edited transcript of highlights from the conversation, as well as a YouTube video of the entire chat. You'll also find the video from BLCK VC's "We Won't Wait" day of action, as well as a list of resources focused on anti-racism education.
On whether tech companies' energy in this moment will be sustained to foster long-lasting change:
You're seeing all these tech companies saying 'Black Lives Matter,' and all these companies are donating. The truth is, in my mind, donating and posting statements doesn't change the way your company works. It doesn't change the way the industry works. So, when I hear those statements, that's the part where I'm jaded and where I feel pessimistic and feel that things won't change. Where I feel really optimistic is I'm seeing these employees at tech companies, and I'm seeing citizens saying, 'No, you can't just say Black Lives Matter. You need to actually live this.'
There's a recognition now from the bottom up, a real grassroots effort to say, 'you need to change what you've been doing because it hasn't worked.' I think these companies have been and they will need to continue to react to what their employees and what their customers are saying. So, I am more optimistic than I've ever been. That being said, I am still a black woman in America and I do not think that what's going on right now will cure racism in any way. I'm optimistic, though, that things will be better in the future. In a month from now compared to where things were a month ago, how much better? We'll have to wait and see. But I'm excited to see what the changes will be.
On creating and fostering change from within versus outside of an organization:
I first got interested in venture late in college. I was scrolling through the different pages of different VC firms, just black and white photos of white male investors. I felt that, just by being in this industry, just by joining a venture firm as an investor as a black woman, that I was initiating change and that I was making a difference. For me, I personally felt like the best way that I can cause action and that I can cause changes was from being on the inside. I don't think that's the right choice for everyone. I also don't think that the onus should always be on people of color to put themselves in uncomfortable positions because they don't think that those industries, those companies, will change without them being there. So I think it's a balance.
On the one hand, you have boycotts that have worked in the past. That's total abstinence. That's total removal from a system that's unjust. And on the other hand, you have people who are inside and they also are driving change in the environment.
I think there's no right answer to how you drive change. If you are listened to and you have a voice, you need to speak up in the way that's most powerful. So in the case of Alexis Ohanian, if he leaves, and him leaving is him raising his voice, that's a powerful way to use your voice. There's also a powerful way to use your voice from the inside. But at the same time, if he's been speaking up all along and nothing's changed, then maybe him leaving is speaking even louder, and maybe that is one approach. If you can't make change from the inside, why should you waste your time there? Why not go somewhere else where you can actually drive change?
On the importance of tracking diversity numbers within VC firms:
It's really important for people within firms, existing GPs and investors, to be aware of how big the issue is. If you don't write it down, you don't have to recognize what you're missing and what is lacking. I'm not optimistic that, in the next couple of years as firms start writing down their data, that they will suddenly be representative of the U.S. population, or that they will be recognizing the value. But I also think it's a bit of a snowball effect. If you get more diverse talent in the door or in the network, or at least on the radar, then you're thinking about diversity more when you do your investment, when you host your events, when you're expanding what the ecosystem looks like, even though it's not going to change right away.
Frankly, a lot of the firms that reach out to us are already aware of and understand, to some extent, institutional racism. They understand implicit bias, and they understand that they are missing talent. It's true that those are not the people or the firms who need the most help.
But when we do get firms who are willing to engage with us, or when we get in contact with firms that aren't diverse or don't have any diverse investors, it's about talking about the value that diversity adds. In study after study, we see that businesses, investors and companies are better when they are more diverse, that their company will be better if they have that diversity. It's just shown time and time again.
So even if you think your portfolio is as good as it could be, or your investor is as good as they could be, it's probably not true. I also like to highlight the fact that it's about having an informed perspective.
Your investors, the people you're speaking with, the people you're making investment decisions with, that perspective is only as informed as it is diverse. So if you don't have diversity on that investment committee, making decisions about sending out those dollars, then you're lacking a perspective and you're missing information.
On best practices around tracking D&I:
On the VC firm side of things I recommend tracking top-level employees. What percent of your high-level employees represent diverse backgrounds, gender, LGBTQ and all that kind of data. Then, I also recommend tracking that at the seniority level, so associates, controllers, partners, GPs. How many of those people have diverse backgrounds. Then, beyond that, I think it's also important to track your pipeline. How many of your candidates coming in are from diverse backgrounds or different schools. All those metrics are important, as well, because then you can see where the pipeline is falling short. When you host events, what do your speaker series look like? Do your panelists all look just like you?
I also think, on the entrepreneur side of things, it's really important to look at the dollar amount spent. How many dollars are going towards founders from different backgrounds, rather than the number of diverse founders you're investing in.
And lastly, and this is more of an intangible thing, but where are you going to find the entrepreneurs you're investing in. Are they recommendations from other investors? Are they reaching out to you via cold calls and emails? Are you going to different colleges and universities and inviting them to your pitch days? So there's also some pipeline tracking work that can be done there that is really important.
On increasing the number of Black partners at traditionally white VC firms versus encouraging Black VCs to start their own firms:
There are two approaches.
The first is the idea that these very large, predominantly white firms control a very large amount of the assets that are distributed in venture capital; $80 billion+ a year, and I'm sure a very large portion of that comes from the top 10 firms. So, it's very difficult to parallel the amount of dollars being invested by the largest firms by starting up a brand new fund.
I also think it's really important to have these Black-led VC firms that invest, without being beholden to any GPs above them. They have a very valuable perspective. We need both.
We need Black investors starting their own fund, starting their own firms, and investing in founders they believe in, whether they're Black or not or brown or not. We also need people at the largest funds, making sure that the very, very large amount of wealth creation and job creation is being implemented and invested in a way that reflects the diversity of our country and reflects the perspectives of Black investors.
On separate funds dedicated to investing in underrepresented entrepreneurs, like the ones from SoftBank and a16z:
We always used to hear and still do sometimes hear the term 'pipeline issue,' which has always been a euphemism in the past to say that there's not enough Black talent out there, which is just not true. There is a pipeline issue and it's that these firms don't have diverse pipelines because they don't have diverse personal networks, and they haven't tried to build out their networks. They tend to invest in people like them, and they tend to talk to people that look like them. That is the pipeline. I don't know how these firms will change.
You mentioned SoftBank. There are a couple of funds right now dedicated to investing in underrepresented entrepreneurs, and I think any dollars put towards Black founders is a good thing. I'm having a hard time understanding the need for a separate fund to invest in diverse founders. If you have not been investing in diverse founders, how will a separate pile of money change anything? I don't know. So you have to look at it and ask what is the issue? Why haven't you been investing in diverse founders?
Do you think they don't have good enough companies? That they don't have enough good talent? They don't have enough experience? I know none of those things are true. The approach I recommend is, above everything, change your pipeline. If it's not working, change it. Go out there and meet founders, meet investors who are investing in diverse companies in a way that you haven't. There are firms out there that are doing that. And if you feel like you can't do that right away, then how about bringing in diverse scouts and giving them the money to invest? There are plenty of great Black founders, CEOs, investors, angel investors who would be wonderful scouts who can invest on a firm's behalf and really put those dollars out there. That will instantaneously change things.
If you feel like you can't do that, put your money into the funds that are actually doing it right now. Precursor is a great example. There are quite a few other funds that have been able to find incredible, diverse talent. Backstage Capital is another. There are quite a few of them. If you can't do any of those things, I mean, I don't know. I don't think you're trying.
On recommendations for aspiring Black investors who feel disillusioned or locked out of the VC community:
Don't stop trying. You will not always get a response, but send cold emails, try to find the connections, a friend-of-a-friend in your network, and try to build up a network in venture. I know it's difficult, but keep trying. I also recommend working with entrepreneurs to learn what that aspect of the job is like that will help you build up a skill set. So if there are any entrepreneurs around you, ask how you can work on a project with them, or interview them. There are a lot of accelerators and incubators that will offer opportunities for you to shadow or intern with them. That's a really good approach and there can be more jobs on that side.
Truthfully, a lot of the jobs in venture go to somebody who comes from investment banking. That's not the only approach, but being in the investment banking system or the startup ecosystem are helpful ways to get around venture capitalists that are a bit more accessible than the venture industry itself. It is a challenging road. The best approach for you is just trying to expand your network and putting your feet to the ground and
being proactive about it.
On firms that are waking up to this issue and want to make changes but are scared of coming off as opportunistic or performative:
Performative allyism is a problem.
You're saying something that you don't live. That is the only problem with all of this. If you live it, it's not performative. It's actual, if you genuinely believe what you say, what you put on social media, what you talk about. If you want to start recruiting in diverse ways, that won't look opportunistic or performative. You will look enlightened. And maybe that's a dramatic turn, but it'll look like you finally understand. I don't think any firm should be afraid to take action, especially on diversifying their networks.
Now, where you come into a risky space is when you start to think about the dollars you invest and the hiring you do as an act of, you know, good PR, or as an act of charity. There are incredible Black entrepreneurs out there and you should be investing in them because they will improve your portfolio. They will introduce you to even better investors. They will give you better opportunities to improve your funds. You should invest in hiring black investors because they will expand your network, they will provide you opportunities to think about problems in a different way. They will provide a different perspective and a different opinion, and they will be some of your best investors and investments. If you are hiring them, and you are not giving them the power to invest dollars, if you're not giving them the opportunity to speak up and share their voice, that is performative. That is not helpful. It will not change lives, it will not change racism, it will not change the shape of this industry, and it will not make your portfolio and your firm better.
On the progress that's been made in the past several years:
One great example is Elliott Robinson. He's on our founding BLCK VC board, and now a GP at Bessemer. He is very well listened to in the VC community, not just in the Black VC community. I think that is a sign of progress. He has check-writing power.
I also like to see the movement of white allies stepping down from boards to make space for Black advisors to be on an independent board. That's hugely important. It's an important trend to keep continuing because board seats are an incredible source of influence and wealth and are very important to diversify.
I also am excited to see the groundswell of support from white allies from tech company employees, standing up and saying, 'we just want to stand for your policies, we won't stand for policies that don't promote Black investors or Black employees at the same rate as their white counterparts, and we won't stand for policies that support initiatives that promote institutional racism.' I think that is all very empowering. Oh, I'm curious to see how this movement keeps going. I'm very hopeful. I think there is a tension and there's action, and there is an excitement that I've never seen. I think we just need to try and keep moving that forward.
Following, you'll find a list of resources for anti-racist education in the tech and VC industry and more broadly. This list is by no means comprehensive but is a great place to start.
On bias in tech:
- Race After Technology: Abolitionist Tools for the New Jim Code by Ruha Benjamin
- Technology and the Logic of American Racism by Sarah E. Chinn
- How I'm fighting bias in algorithms by Joy Buolamwini
- Algorithms of Oppression by Safiya Umoja Noble
- Bits & Prejudice: Finding Problems and Solutions of Bias in Technology by Ahmed Alshamary
Tech orgs focused on racial equality:
- The 1619 Project by The New York Times
- How to Be an Anti-Racist by Ibram X. Kendi
- So You Want To Talk About Race by Ijeoma Oluo
- The Bluest Eye by Toni Morrison
- The Origin of Others by Toni Morrison
- The New Jim Crow: Mass Incarceration in the Age of Colorblindness by Michelle Alexander
- White Rage: The Unspoken Truth of Our Racial Divide by Carol Anderson
- Between the World and Me by Ta-Nehisi Coates
- Selma, Ava DuVernay
- Just Mercy, Destin Daniel Cretton
- 13th, Ava DuVernay
- American Son, Kenny Leon
- Fruitvale Station, Ryan Coogler
- If Beale Street Could Talk, Barry Jenkins
- I Am Not Your Negro, Raoul Peck
- Clemency, Chinonye Chukwu
- The Black Power Mixtape: 1967 - 1975, Göran Olsson
- Do The Right Thing, Spike Lee
- The Last Black Man In San Francisco, Joe Talbot
- Get Out, Jordan Peele