The number of US venture capital firms with either a diversity or an inclusion strategy has increased by one-third since 2018, according to the findings of a new survey released earlier this week. Jointly conducted by the National Venture Capital Association (NVCA), Venture Forward and Deloitte, the third edition of the “VC Human Capital Survey” gathered responses from 378 VC firms representing an aggregate total of US$256.4 billion in assets under management.
Previous editions of the survey had shown that firms incorporating diversity, equitability, and inclusion (DEI) into their human capital strategies do in fact have more women and Black professionals, although the numbers remain low—at best, women make up 25 percent of investment professionals and Black employees make up only 5 percent.
The attempt to improve DEI is still only nominal, though. While the overall number of women and racial minorities on investment teams has increased, the survey shows that most of the numbers come from the junior levels. Women and minorities are still left behind in terms of leadership responsibilities, whether in originating deals, in representing investment firms on the boards of portfolio companies, or in management company ownership. Only 16 percent of investment partners are female and only 3 percent are Black.
Maryam Haque, executive director of Venture Forward, observed that the VC industry is a challenging one to begin with, due in part to the heavy reliance on personal networks for success. But it is particularly difficult, she said, for those from historically underrepresented groups who face additional barriers to entry.
Terri Cooper, principal, Deloitte Consulting LLP and vice chair of external diversity, equity and inclusion, said that despite the progress made since 2018, the VC industry still has a lot of work to do in driving diversity, equity and inclusion. “Firms should prioritize sourcing, welcoming and embracing diverse talent if they are to build a workplace environment and culture that is truly equitable and inclusive,” she said.