What I’ve Learned Baking Diversity and Inclusion Into a Venture Capital Firm

8 min readJun 30, 2017

I may be the only person on the planet whose full-time job is helping venture capitalists bake diversity and inclusion into the core operating system of their investment firm.

…and if I am an only, that’s a really sad thing. (And if I’m not, let me know. I want to meet you!)

If this week’s episode of “Bad Behavior in Tech” is any indication, it is clear that this industry needs to invest significantly more resources towards addressing diversity and inclusion in tech. These resources need to be positioned at the heart of the problem, not at the periphery. And what’s closer to tech’s heart than venture capital?

So, how did I get to be an “only” in this line of work? It’s simple:

The venture capitalists that I work for chose to make diversity and inclusion a priority.

In 2012, Freada Kapor Klein and Mitch Kapor positioned Kapor Capital, their seed stage investment firm, to prioritize social good right alongside financial returns.

Freada and Mitch have since built one of the most (if not the most) diverse investment teams in the country.

(Top row) Mitch Kapor, Freada Kapor Klein, Ben Jealous, Ellen Pao, Brian Dixon (Bottom row) Carolina Huaranca, Anthony Heckman, Mandela Schumacher-Hodge, Jorge Davy-Mendez, Uriridiakoghene Onovakpuri. Source: Kapor Capital

…and in October 2015, they hired me to be their founding Portfolio Services Director, servicing the business, social impact, and diversity and inclusion needs of their 105-company portfolio. (The portfolio has since grown to 117 companies).

PSA: Diversity and inclusion does not just mean gender, and it does not just mean White women.
Freada Kapor Klein pointed this out in 2014, as did Erica Joy Baker, along with many others. So when I reference diversity and inclusion, know that it includes people from all backgrounds, abilities, and identities. It also values and prioritizes these groups equally.

For going on two years now, I have been working with and learning from Freada Kapor Klein, Ph.D., a recognized authority on issues of bias, harassment, and diversity, who in 1976 co-founded the first organization in the United States to focus on sexual harassment.

Freada Kapor Klein speaking at a Kapor Capital investors meeting in September 2015. This slide highlights a small portion of the tech companies Dr. Kapor Klein has trained on hidden bias. Image source

And for the past six months, our team has had the great fortune of working with Ellen Pao, the Co-Founder & CEO of Project Include, who joined Kapor Capital as an investment partner and Kapor Center as its Chief Diversity and Inclusion Officer earlier this year.

Together, we’ve done some great things to help founders with diversity and inclusion:

Launched a diversity and inclusion pledge called the Founders’ Commitment. This Commitment was optional for all pre-2016 investments and mandatory for all future investments. To date, 3 out of every 4 companies in our portfolio (117 companies in total) have signed on.
Hosted different workshops, training founders and diversity advocates on a variety of topics, including: valuing lived experiences and distance traveled, hiring employees that reflect your end users and customers, setting diversity and inclusion goals, sourcing and hiring diverse talent, incorporating bias-mitigating technology, developing an inclusive culture, implementing the Rooney Rule and referral bonuses, creating inclusive messaging, leading as a White male founder, and designing and implementing a code of conduct
Created an online resource hub, housing guides and best practices
Carried out custom, company-wide presentations
Provided private coaching
Connected portfolio companies to exchange ideas and offer support to one another
Plugged companies into Diversity Advocates (founded by Freada Kapor Klein in 2014), a virtual group of over 450 volunteer or designated diversity and inclusion advocates, all working to make their tech companies more diverse and inclusive. (You can join).
Partnered with Project Include to provide founders with surveys that will help them measure the sentiments of their workforce and the effectiveness of their inclusion practices

As you can see, we’ve been testing out a variety of content and support structures to help our companies make progress on diversity and inclusion, and let me tell you this much…

It has not been easy.

We’ve excelled in several ways and fallen short in others. We’ve made transformative breakthroughs with some people, and have flat lined with others. Sometimes traction is seamless, but very often it requires consistent follow-up. Diversity and inclusion is not an easy pursuit and there is no silver bullet solution.

And that’s why…

We continue to take a comprehensive approach.

We continuously test our hypotheses, launch new solutions, and fervently iterate, as we eat our own dog food and listen to our users about what’s working and what’s not.

Through it all…

We are extremely hopeful, because we continue to learn and make progress.

Learn what does and does not work with baking diversity and inclusion into a five-person team versus a 250-person team. Learn what message needs to be delivered when and to whom, in order to get key stakeholders to act. Learn how founders and diversity advocates like to be educated and what approach does and doesn’t jive with them. We’ve been learning so much, and Kapor Capital will be publishing an upcoming post highlighting these learnings. (Follow Kapor Capital on Twitter to find out when the article goes up).

In the meantime, I want to quickly share some key things that venture capital firms may want to consider when thinking through how to lay the right foundation for a diversity and inclusion program.

Here are 9 suggestions to bake diversity and inclusion into the operating system of a venture capital firm:

1. Secure commitment from all investment partners

The partners of the firm hold the power and set the conditions for “how business is done around here.” Via the partners’ words and actions (or lack thereof), the partners establish the culture that others (e.g. junior investors and founders) learn to operate within. Understanding this power dynamic is crucial to understanding why it’s vital to secure commitment from the top when it comes to rolling out any diversity and inclusion program. Without that, the initiative will be doomed to fail before it even starts.

2. Walk your talk

You shouldn’t ask the founders to do something that you yourself don’t practice. I highly recommend reading Freada and Mitch’s post, Dear Investors: So You Want to Take Diversity Seriously. It’s a powerful reminder for VCs to get their own house in order, before telling founders how to fix theirs. Looking at the diversity of your own investment team, the teams you fund, and the co-investors you work with is one immediate action all VCs can take.

3. Hire someone to help

Baking diversity and inclusion into your firm and your portfolio is not for the faint of heart. You’re pushing back on long-standing, deeply-engrained ways of operating like a traditional venture capital firm. You’re breaking away from the status quo and venturing into new territory without a proven blueprint. And that’s hard. You’re definitely going to need help to get this initiative off the ground and get some traction, so consider creating room in your budget to hire a Portfolio Services Director. (Follow me, as I’ll be publishing an article outlining the key attributes to look for in a PSD hire).

4. Launch a founders’ pledge

Here’s what we did. Our pledge is centered around four tenants: 1) setting diversity and inclusion goals and monitoring progress, 2) utilizing technology/resources to mitigate bias, 3) engaging in empathy-building activities, and 3) committing to on-going education in diversity and inclusion.

5. Include diversity and inclusion in your investment criteria

Once we launched the Founders’ Commitment, we began screening all prospective companies for their willingness to bake diversity and inclusion into the DNA of their companies. No pledge. No money. And for follow-on investment decisions, we factor in the company’s progress on diversity and inclusion, before cutting another check or participating in a future round.

6. Require that founders report on their progress

If it’s not counted, it doesn’t count…If it’s not measured, it can’t be managed…

I can go on, but I think you get my point: you must ask founders about their progress on diversity and inclusion. You have to stop limiting investor:founder conversations to things like CAC, MRR, and run rate, and you have to start expanding them to include other essential business matters, like hiring practices, company culture, and people policies.

7. Help the founders succeed

Don’t be that investor. Telling your founders they must do something, but then not rolling up your sleeves to help them achieve it. If you scroll back up, you’ll see the list of support structures we’ve put in place at Kapor Capital to help our founders succeed. Hopefully that gets your wheels spinning.

8. Celebrate the early adopters

One of the first things we did when we launched the Founders’ Commitment was publicly acknowledge and celebrate the initial companies that signed up to participate. Social proof is a powerful influencer and one that we utilized to inspire other companies to follow suit.

9. Include diversity and inclusion in the investors’ performance review

There’s only 24 hours in a day, so it’s natural for anyone — including investors — to prioritize the work items they will be evaluated on. If your firm does not evaluate investors’ ability to help their companies with diversity and inclusion, the investors will naturally bump it down on their will-do list. Don’t let that happen. Help them prioritize diversity and inclusion by putting it on their scorecard.

Again, I may currently be the only person on the planet whose full-time job is helping venture capitalists bake diversity and inclusion into the core operating system of their investment firm.