By Madison Hofert
The NVCA Diversity Pledge was released and signed by 46 venture capital firms in 2015. In 2020, five years later, the Brown University Venture Capital Inclusion Lab is following up with these firms, aiming to discover and disseminate innovations in diversity, equity and inclusion (DE&I) that the pledge has fomented in the past five years, reinvigorate the urgency of the pledge, and take the temperature of DE&I within the VC industry today.
In our NVCA Follow-Up Blog Series, we will be highlighting a portion of the actions that each VC Firm has undertaken in response to the NVCA Diversity Pledge. The complete NVCA Follow-Up Report, which will include all of the actions undertaken by each VC Firm, will be released at the conclusion of our interviews and research. Stay tuned for additions to our Best Practices section, which will include key takeaways from our conversations in short-form.
500 Startups, a global Venture Capital Firm that is headquartered in San Francisco, CA, was among the first of our conversations about the NVCA Diversity Pledge. We interviewed Clayton Bryan, a Venture Partner at 500 HQ, to learn more about 500 Startups’ response to the NVCA Diversity Pledge. This blog will give an overview of 500 Startups’ overall commitment to DE&I, how being an NVCA signatory codified this mission, and how Venture Partners like Bryan are creative in their approach to DE&I as a result of the NVCA Diversity Pledge.
500 Startups began in 2010 with a mission to “uplift people and economies around the world through entrepreneurship.” Initially a venture firm that differentiated with an accelerator program, 500 Startups has now invested in over 2,400 companies across 77 countries.
But how did they get there? It was an iterative process; gradually, 500 Startups added thematic funds for a total of 16, including funds focused on Southeast Asia, Latin America, and the Middle East, among others. “We’ve always believed that talent across gender and race exists everywhere, but the opportunity is not equally distributed. So we try to go and find talented folks around the world, regardless of [their] background,” Bryan says.
Signing the Pledge
“it was the right thing to do… it goes with our philosophy”Clayton Bryan, Venture Partner
The commitment to DE&I has always been in 500’s “DNA.” So, five years after their inception, 500 signed the NVCA Diversity Pledge because “it was the right thing to do… it goes with our philosophy,” and it officialized the DE&I-focused component of 500’s DNA, bringing more standard rules and awareness to the issue.
Further, 500 has always looked for partner VC Firms that also care deeply about DE&I. In signing the NVCA Diversity Pledge, VC Firms can hold each other accountable. And those firms that are spearheading this mission are leading the way for other firms to join the fight.
A Few Actions and Outcomes
After signing the pledge, 500 Startups took action and enjoyed many positive outcomes. The majority of these will be highlighted in the report. Thus, the focus of this section is to highlight the creativity of Bryan and others in their tackling of DE&I, especially in response to the NVCA Diversity Pledge and the Black Lives Matter movement.
Bryan says that he has personally “opened up [his] calendar [for] office hours with Black and Brown founders. Over the last month, I’ve probably met with around 80 through my open office hours.” Not only did Bryan articulate the generative experience of connecting with the community, engaging with local entrepreneurs, and broadening his network, but he revealed that “the two investments that I’ve done in June are teams with black founders,” and “those two companies that I invested in in June actually came through the first set of those office hours.” At the time of the interview, Bryan had more office hours upcoming, and he expressed his excitement. These office hours allow investors like Bryan to form investor-entrepreneur, mentor-mentee, and community-level bonds with a diverse set of founders. Plus, they were the source of his two latest deals: a win-win. Bryan’s colleagues have also taken matters into their own hands, by seeking and “finding other investors that have shown that they have a track record of backing Black founders and building those alliances so that we can make sure that we’re having a steady flow of information coming [not only] from my network and the two, three degrees of that, but going after and building strong relationships and bonds with other investors, pre-accelerators, [and] different stakeholders that are within that community of supporting black founders.”
Bryan took further action by crafting a new investment thesis to pinpoint the issue of racial injustice in policing in the United States. In his thesis, Bryan is looking for “law enforcement 2.0,” which is essentially the evolution of security and policing. He continued, “I can’t disclose the name of the company, [but] one of the companies that I recently invested in is spot on with helping to make sure that our justice system is more equal, fair, [and] balanced.” At the intersection of Bryan’s new investment thesis and his office hours, a new investment was made, “I was very driven to do this because I think that it’s something that all of us as investors can do… we have such immense power here.”
Stay tuned for even more about what 500 Startups has done after signing the NVCA Diversity Pledge, and the outcomes of these actions.
Notes: Figures are approximated based on 500 Startups’ internal estimates as of June 30, 2020 and have not been independently verified. The title “Partner” is used in accordance with customary business practice in the venture capital industry and does not indicate a legal status as “partner” in a partnership.