The second day of the GCVI Summit also featured a special panel discussion on diversity and inclusion, which GCV as an organisation and through its GCV Leadership Society are trying to promote across the corporate venture capital community.
The panel included Gus Warren, managing director at Samsung Next, a venturing arm of electronics manufacturer Samsung; Tracy Isacke, managing director at Silicon Valley Bank; Frank Klemens, managing director at Dupont Ventures, the venturing subsidiary of chemical producer Dupont; and Brittany Williams, deputy chief of staff at chipmaker Intel’s investment unit Intel Capital.
Isacke said that the purpose of the panel was to “make people come together to do something.” Isacke and Warren mentioned how they jointly established the subcommittee on diversity and inclusion of the Leadership Society and formulated a plan to suggest guidelines on how to increase diversity within CVC teams and dealflow.
The panellists presented relevant statistics highlighting the pressing need for change in terms of diversity and inclusion in the venture community. Klemens noted that the LGBT community was one of the hardest minority groups to identify and cited a study that 12% of VC funding went to LGBT but they chose not to identify.
“It is a group of people you do not know exists, because they do not always openly identify,” he said.
Isacke and Warren cited another study, according to which only 11% of partners, general partners and managing directors at traditional VC firms were women and 71% of traditional venture firms had no women partners.
Williams added that less than 3% of the $40bn of VC investments in 2017 went to black or other ethnic minority-owned startups. At the same time, Hispanic founders made up less than 2% of those receiving funding and those from the Middle East totalled less than 3%.
The panellists also presented arguments as to why CVCs should be concerned about diversity, equity and inclusion (DE&I). Williams noted that it provided access to new markets and that “the US Census estimated that by 2045 the number of people of colour will grow by 74 percent.”
Warren in turn shared that for Samsung, DE&I was an important focus area: “We are not just to do the right thing, we are doing it because it is good business.” He also cited findings of studies that venture capital firms which increase their proportion of women partner hires by 10% saw, on average, a 1.5% spike in overall fund returns each year and had 9.7% more profitable exits.
Klemens spoke of the benefits of working in a “speak up” culture, from the standpoint of the LGBT community.
Warren also expressed his firm conviction of the positioning of CVCs to contribute to a positive change: “Corporates are well-positioned to be real leaders in this drive. At Samsung, we have an investment thesis looking at some underserved consumer segments, so we have a business imperative to do that. So, I think it is a great opportunity.”
The panellists also discussed a list of recommendations they made to corporate ventures in a push to increase DE&I. The recommendations included, among other things:
- defining what “diverse” meant for the organisation;
- setting reasonable and measurable future goals;
- publishing baseline metrics and goals;
- encouraging active event participation targeting diverse founders and CEOs;
- allocating marketing budget to diverse sponsorships and events;
- setting quantifiable relationships management goals for diverse founders and CEOs; and
- considering LP investments in funds focused on underrepresented founders and CEOs.
Williams spoke on LP investments and said she considered them an “opportunity to seek advice [on diversity] and to invest, of course.” Warren mentioned an optional survey his organisation used to measure diversity within teams and portfolio companies. He encouraged other CVCs to do the same and expressed hope to be able to share results during the next GCVI Summit.