Name: These Investors Are Betting on Diversity
Uploaded: 2018-01-22
Duration: 4 min 44 s
Description: Numbers show Silicon Valley boy’s club culture doesn’t yield returns.

You are announcing a new fund. Yes. A $ 181 million fund. This is your second. And two of your limited partners that put money into this fund did it because of the track record that the founders have, and the partner team here. But also because of your focus on, Diversity. Can you talk a little bit about how those conversations went, and why there's this increased interest now in this focus area? What we found was that first and formost, our LPs are looking for very strong returns. They have to deliver returns and performance. And so that has always been the very first bar. The question is do people believe that in order to accomplish that you need to have that diversity. Or do they think that diversity is something that you want to check box on. And what we found were the LPs that participated with us was that they believed that diversity actually would generate those better returns. Most of our investors are investors who are with us in Fund One, which is terrific. And we did get a couple of new investors, Linda Gates through her Pivotal Investment Group, and also Cisco are both new investors into Fund Two. Both Cisco and Melinda was all about, okay, first things first, what are good opportunities for my investments And if I can then invest in places that are more diverse, because it's different than in Sisco's case, the rest of my portfolio or in Melinda's case because she's very much been a champion of trying to have more women in tech and women in a STEM. They Became aware of what we're doing and they said you know, next time you're ready to raise funds, you should come to talk to us. We would love to invest. Theresa and I both have been in the BC industry for several decades. I joined EFJ in 1997, and I'm actually in my 20th year investing in venture capital. And when I started with EFJ it was a 90 million dollar seed fund. That's where we started, that's where I started at EFJ, but as EFJ grew as a firm and became a global Multi stage, multi enterprise firm with 3. 5 billion under management it was much harder to spend the time with those companies in the same way to do that company building. Because we actually initially both just gonna go off on our own and do angel investing on our own account. We've both been at our other firms large, established, venture firms, successful, we've done well. And it was our chance to just do the stuff we loved which was the super early stage stuff. And we didn't set out to say it would be more diverse, but we had a feeling that just because Jennifer and I don't look like 94 % of the venture capital world that we would probably have a different. Set of networks, and therefore a different pipeline, in the deal flow, and our portfolio would end up looking more like our firm does. The landscape of the startup world, and the companies, and consumers that they sell to, it was changing. And the fabric of the cummunity is much more diverse. Both in terms of gender, but in terms of ethnicity and in terms of other qualities, functional capabilities, that sort of thing. And we thought that we wanted to build a firm that took advantage of that diversity. Diversity to bring to their better decision making for this companies agenda for networks and then ultimately leading to better decisions and more success for those companies. Venture capitalising this industry is currently about 6 % female investors and that's actually gotten worse over the last decade, it used to be like 9 %, so going the wrong way. And also, about three quarters of all venture firms have never had, have no, have never had a female partner or investor. You also have a pretty diverse portfolio when it comes to ethnic and racial diversity and immigrant founders. Do you think that it's going to take Something big to make significant headway on that front like it has on the gender side, or do you thing that they're gonna go hand in hand in some way? I think they do go hand in hand, if If the teams are more alike, they tend to decide things more quickly, but there tends to be more group- think, whereas if the teams are more different, then they actually make better decisions. On average and anyway so I do think that they would go hand in hand. And I think that there's being some, I think there's some progress in all those areas but we have a long way to go. [ BLANK_AUDIO ]

Numbers show Silicon Valley boy’s club culture doesn’t yield returns.