Venture capital firms to include “diversity riders” in term sheets

I’m all for this (meaning bringing diverse co-investors into rounds). I’d add that as entrepreneurs we should add LP riders when doing rounds (where’s your money from?!).

Can’t say I know all these funds super well - they’re not big names outside of a couple - but helping diverse co-investors build track records is a good idea on a bunch of levels. It’s all friends and family anyway.

I will say that Greycroft is one of the few funds who I respect deeply in how they operate and don’t treat “diversity” as an add-on. They’re just a really smart group of people, that I’ve enjoyed every interaction with, that actually have a diverse set of experiences and interesting points of view And investment theses that scale across diverse sociopoltifla outcomes. Novel I know!

I see a few misguided comments here not worth responding too about “merit” and what not. I’ll deal with your anguish if you make a point of it, but please bring some original thought, non-anecdotal or not-bad research cause I feel like I’m reading a bad /r/* thread in the below.

The fact is (this is fact, not ideology) VCs tend to : -discriminate positively White and Asian men because they are White and Asian man independently of their merit -discriminate negatively all other people because they are women, black people... independently of their merit

In France Oussama Ammar (the local Paul Graham) clearly advice to female entrepreneur, and to Black and Arab entrepreneur to preferably choose a business or strategy where they can bootstrap cause raising fund will be harder to them. Recently there have been many post about black entrepreneurs and VCs. And there is an interesting HBR article [1] showing some biais in investing in woman startup in Sweden (country known for its gender equality)

These racist and sexist bias and discrimination has two consequences : - Lack of fairness as merit is clearly not the only thing taken into consideration ; with positive unfair impact for White men, and negative unfair impact for women, Black people... - "Bad" investment by the VC, that could have much better by investing based on "merit" and not (unconsciously) on skin color or gender. This has negative impact on the VC companies... and more generally on the economy.

So finding ways to judge startup more on merit, being able to lower the bias is also a business decision that make sense and that will have positive impact on the VC performance and the economy. Getting more diversity in the VC firm just do it (and if VC are biased against black and woman startuper, we can imagine such bias used to be true for hiring people)

[1] https://hbr.org/2017/05/we-recorded-vcs-conversations-and-an...

Do we agree that current VC, mostly because of unconscious bias, are racist and sexist ?

Then what do you suggest to change this situation ?

I am not super comfortable with counsious positive discrimination as a momentary tool to correct a discriminatory situation (with negative impact on the whole society), but it is hard to imagine solutions without using this tool.

My father in law is a Vietnamese immigrant, came here after communists destroyed his country on a fishing boat. He’s now a retired millionaire!

My neighbor is black, and she drives a $100k+ Mercedes! Country club golfing and sailing type.

My point is, arbitrary assumptions based on race are totally meaningless in 2020. There are people in all social strata of every race. Giving a leg up to someone for being XYZ is dumb - it reduces complex people to simple labels that define how victimized the woke left says they should be.

If we want to talk about giving government assistance to people in poverty regardless of race, I’d be much more amenable. There will be correlations to poverty and race but I think we all agree Oprah and Michael Jordan should not be getting handouts.

As it stands the identity politics movement is ideologically inconsistent and is focused on driving people apart and re-segregating us. This is a movement doomed for failure. We should instead be eliminating our superficial differences and moving beyond bankrupt social justice theories that reduce individuals to mere labels rather than intelligent, thinking independent people with their own agency.

We have recent proof that educational institutions actually discriminate against white and asian pupils.

Your wording suggests animosity, so why would you believe you are less biased than anyone else?

Perhaps you are biased because you spend time on reddit, I wouldn't hold it against anyone, but original thought doesn't make an appearance in this discussion.