The National Venture Capital Association is spinning out a new nonprofit organization aimed at advancing diversity and inclusion in the industry and expanding access to venture capital, the association said Tuesday.
The new 501(c)(3) nonprofit is called Venture Forward and will be based at the NVCA’s headquarters in Washington, D.C., and at new offices in San Francisco. Its focus will be on advancing diversity, inclusion and access to opportunities in the venture and startup worlds, which continue to be heavily dominated by white men in a handful of coastal markets.
“A big part of our mission here is to make sure that we are expanding opportunities for women, for people of color, for people in geographies outside of California, Massachusetts and New York, to be able to learn about venture capital and participate in our ecosystem, whether as an entrepreneur or as an investor,” Maryam Haque, the executive director of Venture Forward, told the Silicon Valley Business Journal in an interview.
In the 2018 edition of the NVCA’s biennial Human Capital survey, which measures diversity among venture-backed startups and the VCs that fund them, clear ethnic disparities were laid out. According to that survey, 80% of investment partners at venture firms are white, while 15% are Asian or Pacific Islander. The Hispanic/Latino and Black demographics each make up only 3% of those leadership roles and women comprise only 15% of the investment partners ranks at VC firms.
According to Haque—who is transitioning into the new role from her most recent position as senior vice president of industry advancement for the NVCA—the venture association has long been focused on making the startup world more diverse and increasing access to opportunities, but ultimately decided that it needed a separate entity to better advance those efforts.
The NVCA is funded by member dues and counts hundreds of venture capital firms, including the biggest names on Sand Hill Road in Silicon Valley, among its members. The association has advocated and lobbied on Capitol Hill on issues including immigration reform, tax policy and tech regulation.
Venture Forward, however, is structured as a separate public nonprofit, meaning that while it will work closely with the NVCA, it has its own staff, leadership team and board of directors and is funded by outside donations from organizations and individuals. The nonprofit has received about $5.5 million in initial financial backing, Haque said.
That includes funding from more than 60 individual venture investors and founding corporate donors Silicon Valley Bank, Deloitte and Gunderson Dettmer.
“To help solve the world's biggest problems, we need to bring new voices to the table and develop a more representative ecosystem,” Jennifer Friel Goldstein, head of business development at Silicon Valley Bank and a founding member of Venture Forward’s board of directors, said in a statement. The Santa Clara-based bank counts more than half of the venture-backed businesses in the United States among its customers.
Venture Forward has its roots in the NVCA’s Diversity Task Force, started in 2014, which aimed to better understand and address the lack of diversity in the startup and venture worlds. By 2018, the NVCA had decided that the issue merited its own organization and applied for 501(c)(3) status from the IRS.
“We kind of learned when we started the Diversity Task Force very quickly that just the term ‘task force’ was probably not great because it made it seem like kind of a short-term or finite issue,” Haque said. “And we realized that just given how long cycles in our industry are—tenure, fund life—that this change is not going to happen overnight, and we need to make sure we have these long-term sustainable resources in play for the industry to make sure that it's investing in itself. There's so much of the focus for VC firms to invest in companies, but I think through this vehicle, through Venture Forward, it's really about the industry investing in itself to help it be the best version it can be.”
The NVCA was initially set to launch Venture Forward on March 12, she said, but decided to postpone the announcement as the Covid-19 pandemic landed and threw the U.S. economy into disarray. But by late April and early May, the opportunity to launch started to look right again, she said, “from the industry's perspective of no longer just fully being heads-down in terms of triaging portfolio companies, but to maybe take a step back and be able to see this new organization.”
The launch now is “timely in that sense, because what we're concerned about is … firms kind of falling back to existing relationships and networks and fewer in-person meetings,” Haque said. “And because venture has been so network- and contact/connection-driven in the past, we actually were worried that the momentum the industry has had around progress toward diversity, equity and inclusion could potentially reverse.”
This week’s launch date for Venture Forward turned out to be especially prescient, as the death of George Floyd in Minneapolis and other black Americans at the hands of police have sparked weeks of protests around the country and injected new vigor into conversations about racial justice and equality.
“The events of the past two weeks and understanding the climate of systemic racism and inequality broadly, I think, just further amplifies the need for Venture Forward and our intersectional approach when we think about diversity,” Haque said. “Because I think a lot of the focus over the past few years has maybe been more on gender and diversifying the industry by gender, but through our lens, we've always thought about diversity from a more intersectional approach—from gender, race, ethnicity, age, education socioeconomic and geographic perspectives.”
Besides Friel Goldstein from Silicon Valley Bank, Venture Forward’s founding board of directors consists of:
- Christy Chin of Menlo Park-based Draper Richards Kaplan Foundation
- Bobby Franklin, chair of the NVCA
- Charles Hudson of Precursor Ventures in San Francisco
- Ray Leach of JumpStart Ventures in Cleveland, Ohio
- Kate Mitchell of Foster City-based Scale Venture Partners
- Scott Sandell, managing general partner with New Enterprise Associates in Menlo Park
The nonprofit currently has two full-time staff members—Haque and Rhianon Anderson, the programs director—and is hiring for a research director. In February, it leased office space near Union Square in San Francisco but is yet to move in since the region’s stay-home orders went into effect, Haque said.
A new website at ventureforward.org includes more information about the organization.
Haque said she’s gauging Venture Forward’s success in part through the NVCA’s Human Capital survey.
“We saw some progress between 2016 and 2018 in terms of the increase in women investment partners at venture firms across the country, but there's still been very little movement in terms of black or LatinX partners across the industry.” Haque said. “So as we continue to track the workforce, that's really how we're holding ourselves to making sure that we are moving in the right direction and hopefully that the pace of that can speed up because ... it's been slow and there's a lot more work that the industry can and should be doing.”
