There was a slightly awkward moment in the Global Venturing Review podcast* a few weeks back when the presenters started chatting about Rachel Lam‘s new venture capital firm, Imagination Capital, set up with her former CEO, Richard “Dick” Parsons.
The awkwardness was about the timing as it came just before a coordinated media sweep of outlets about the new fund. This awkwardness, however, probably pales besides the challenge most entrepreneurs outside of Stanford-educated, white males seem to have faced in getting venture funding.
Businesses owned and run by women of colour, for example, get only 0.2% of all venture capital funding, according to news provider Impact Alpha, although 10% of venture dollars globally between 2012 and end-September 2017 went to startups with at least one woman founder, according to TechCrunch analysis.
A study published in the Harvard Business Review found male and female entrepreneurs were asked different questions by venture capitalists, which impacted how much money they received.
TechCrunch found that 8% of partners at the top 100 venture firms this year were female, while 15% of corporate venture capitalists are women, as are 22.1% of 1,659 US-based angels in the most recent survey by the association and Wharton business school.
Of these US angels, 5.7% were Asian, 2.3% Hispanic and 1.3% black. In this light, Unilever, an Anglo-Dutch listed consumer goods company’s, decision to acquire US-based hair and skincare products maker Sundial Brands and set up a $50m corporate venturing fund for women entrepreneurs of colour is significant.
Unilever and Sundial’s New Voices Fund is targeting a final size of $100m to include external limited partners. Bain Capital, a private equity firm that acquired a minority stake in Sundial in September 2015, is reviewing with Unilever’s existing corporate venturing unit, Unilever Ventures, and Sundial’s founder and CEO, Richelieu Dennis, the final set up of the fund, according to an insider.
The governance of the fund could be important. As Lam told Wired about Imagination Capital, pitching a venture fund run by an Asian-American woman and an African American man “is likely to be a bit different than when pitching your typical VC”.
Lam, who founded the Time Warner Investments group in 2003 and invested more than $325m in 54 companies before leaving earlier this year, alongside peers such as Claudia Fan Munce at IBM Venture Capital and Barbara Dalton at Pfizer Ventures Investments, was in many ways a pioneer but the door for a broader and more diverse range of entrepreneurs and investors has been opening more widely, encouraged by this decade’s luminaries, such as Sue Siegel at GE Ventures.
While a fifth of corporate venturing leaders in the GCV Powerlist 100 this year were female, more than 40% of the industry’s Rising Stars, nominated by their bosses, were women and looking through a wider lens of diversity to include ethnicity a majority were.
The mention of bosses is probably an important factor. Leaders, such as Wendell Brooks at Intel Capital, have set high standards in their approach to this issue. But probably the most telling reaction come outside of the US, where Jeffrey Li, managing partner at Tencent Investment, winner of unit of the year at the GCV Asia Congress in September, looks bemused when asked about the topic as China has more equality in terms of female entrepreneurial billionaires and corporate venturing investors than probably anywhere else.
But much depends on context – China’s one child policy has affected the generations growing up since Deng Xiaoping started economic reforms – and there are few easy answers. The women in venture capital lunch were concerned at female leaders pulling up the ladder after they had climbed through the so-called glass ceiling as much as patriarchal practices.
A starting point for many, therefore, is to look through the noise and, as Martin Luther King advised, judge by people’s content of their character. Next year’s Global Corporate Venturing and Innovation (GCVI) Summit will focus on balance and diversity and spotlight the corporate imperative to take action in balancing gender, ethnicity, sexual orientation, religion, education or geographic origin.
After all, who doesn’t want to be on the right side of history?
* The weekly roundup of global venturing news from Global Corporate Venturing, Global University Venturing and Global Government Venturing through the podcast is also available on iTunes, Stitcher, SoundCloud.