Can Venture Capital Overcome Its Diversity Problem?
Elliott Robinson ’12 is a partner at Bessemer Venture Partners, where he leads the growth equity practice. He is also a founding board member of BLCK VC, an organization that works to empower, advance, and increase the number of Black venture investors. A few days after the murder of George Floyd at the hands of Minneapolis police, Robinson took part in a virtual BLCK VC event where participants spoke about their experiences stemming from the lack of diversity in VC; according to a recent NVCA-Deloitte study, only 3 percent of people who work in venture capital are Black. Another study finds that only 1 percent of venture capital money goes to companies with Black founders. In concluding the event, during which speakers shared deeply personal stories, Robinson offered his expertise to those in the venture community serious about diversifying their workplaces. “I’m going to share my calendar to talk to funds that do not have a Black or brown investing professional on staff, and who want guidance, who want help in recruiting and mentoring and shepherding people to make sure they have a good career experience,” he said. “It’s something I’m super passionate about. We want to get to a point where we don’t have to have something tragic happen to make change.” Below, Robinson talks about how he thinks that diversity can be increased once people share and expand their networks, his career trajectory, and his time at Columbia Business School.
What was your path to Business School and how you got into venture capital?
I had been with a venture firm for about four years. Before that, when I was at Morehouse College, my dream was to be a software entrepreneur. My parents were part of the first integrated class of Vanderbilt. My father did a three-year stint at Westinghouse as an engineer, and then he and two of his colleagues started an enterprise software company called Genisys Systems. It was at my dad’s startup office after school that I learned how to code in MS-DOS, build computers, and fall in love with Sierra Games. After my graduation from Morehouse I worked at Syncom Venture Partners, and one day, John Rice, who founded Management Leadership for Tomorrow (MLT), walked into our office. MLT is this great fellowship program for African American, Latinx, and Native American professionals pursuing their MBAs. At the time, Harvard Business School was the only school I was considering. Then I met Michael Robinson in admissions at CBS and he told me about the School and the J-Term. I came to visit and was, "Oh, this is totally my vibe." Columbia is super diverse. Half of the professors I met were actually practitioners in New York City that took a train up to teach a case on something they were actually living that week. It was the best two years of my life.
You’ve talked about how hard it was to get another VC job after graduating from CBS. Can you talk about where you finally landed, and what your career path has been in the last few years?
One of the things I’ve talked about recently [in my work with BLCK VC] is that there were a lot of non-investor positions that I was offered. As someone who had been in the space for four or five years, I watched many of my friends and even some people I peer-advised apply for the same jobs. They would get interviews or offers, and I couldn't get anything. It was disheartening. Many of those people and funds that wouldn’t consider me for an investor role, I now sit on boards with, or they’re people whose companies I've invested in, and they have since apologized. Some of them have been very honest about it. The more senior you are in this world and the closer to get to check-writing authority and board responsibility, the fewer people of color and diverse candidates you see. To my knowledge, there are only seven Black venture capitalists in the country who can write a check larger than $5 million and I’m the only Black investing partner who is part of a Sand Hill Road fund.
Why do venture capital firms struggle with recruiting diverse candidates?
In VC, we use this term “pattern matching,” when we talk about the companies we invest in. A company that worked out really well or a team that we really liked—do we see something like them in the next company? Unfortunately, our industry applies that same methodology to hiring and recruiting. Eighty-two percent of venture investors are male and 60 percent are white male. On top of that, 40 percent of all venture capitalists attended two schools, Stanford or Harvard. Most firms also solve for “cultural fit.” So when you put all that together, how does someone like me, who is Black, didn’t go to Stanford or Harvard (my college, Morehouse, is a historically Black college), and who doesn’t “fit” culturally, ultimately get selected. I don’t fit the historical pattern matching. I advise firms to expand the schools at which they recruit. I also advise that they start scoring candidates for what I call values fit—eliminating the idea of cultural fit and instead considering how a candidate may add other qualities, such as diversity.
Does it come down to building more diverse networks? And if so, how do you do that?
It's about joining a bunch of networks that we all have and can tap into. For a large percent of tech events I go to, I'm the only Black person. Then, I go to events where there are no white people. One of the biggest ways is to rethink your event calendar. We're not hard to find. You've just got to step out of your comfort zone and spend time with the community. We'll talk about the same tech topics, the same companies, the same trends, news of the day. People talk about a pipeline problem, but I say there's no pipeline problem. There's no dearth of candidates. There is a dearth of connection between the firms and the candidates because there's no outreach. BLCK VC is doing more outreach and collaborations with other affinity organizations. We recently did a sit-down with the National Venture Capital Association, about how we might do something unique to help drive impact. I think you just have to meld the communities somehow. It is a two-way street. We create our own space to talk openly and honestly about our experiences, good and bad, but we've got to be willing to extend that olive branch to the rest of the community because at least right now in this moment there's a will and a desire to want to reach back.
What role do wealth disparities play in this discussion? The statistics show a very wide gap—a Brookings Institution report from earlier this year finds that the median net worth of white families is almost 10 times that of Black families.
State and federal public pension funds and corporate pension funds are among the industry’s largest investors. Think about a state like California, where almost 50 percent of those pension fund dollars are generated by working people who are non-white. Then consider that at the national level, less than one tenth of 1 percent of those same pension fund dollars that are allocated for alternative asset class investing, including venture capital, are committed to investment funds whose partners look like the very people who worked to generate pension fund dollars in the first place. When we talk about the wealth gap, wealth disparities, redistribution of wealth, reallocating pension fund dollars is probably in the top five ways to do that.
At the BLCK VC gathering, you talked about making a day a week on your calendar public. What are you hoping to do with those times?
People right now are matching donations, time, and resources, and I wanted to open time to firms that want guidance on increasing diversity at their firms. I’ve been flooded with responses. I’ve conducted 24 sessions to date with funds that have zero Black or brown investors on their team, advising on how to best address that issue. Things are happening. People are willing not just to have a conversation, but actually to commit to doing things to change for the better. In a few short months, I’ve witnessed tangible outcomes. At the end of the day, its truly a hearts-and-minds problem when you consider that all we’re trying to achieve is an equitable experience for diverse candidates in venture capital and diverse tech founders.
You talk about VC as being an industry that you love. Why, and what is it that draws you in?
I’ve always had an utmost respect for people who can start with an idea, put that idea on paper, build a product, then scale a business around it. That was my father’s story. Any given week, I'm talking to companies doing a million different things, in different markets, globally. Then, you become friends with the people that you partner and invest with. That, for me, has been the love part of it. Many of these entrepreneurs, now that I'm in year fifteen of my career, I've invested in more than once, or served on multiple boards with them, or seen them have multiple successes, or a failure then a success. Being a part of that journey is what I love the most, and why in this current moment, I’m more excited about the next 15 years than the last.