Despite what numbers might show, some venture capitalists are quite serious in their commitment toward diversity, equity, and inclusion are not going away.
The New York City Economic Development Corporation (NYCEDC) on Wednesday announced the launch of Venture Access Alliance, a group of 70 investors who have promised to boost diversity in the Big Apple’s startup ecosystem. It is part of the city’s Venture Access NYC initiative, which also provides fellowships and a career program for diverse talent looking to enter venture capital.
New York City is the second largest tech ecosystem in the world, making such a public-private partnership significant in the impact it could have. The Alliance encourages firms and investors to collect diversity data and increase the number of women and minorities hired and funded annually. From there, the Alliance hopes to track the progress of the city’s landscape and ask investors to fund and implement programs that can help develop diverse talent in the city.
Harlem Capital Partner Jarrid Tingle and Union Square Ventures Partner Fred Wilson chair the Alliance in partnership with the Ford Foundation, Annenberg Foundation and Tech:NYC. The Alliance was created to ensure that New York City was tapping into the next generation of talent, Tingle told TechCrunch.
“Creating an inclusive ecosystem is the right thing to do, but it also ensures that NYC is not leaving GDP and innovation on the table,” Tingle said.
Today, the NYCEDC released its latest diversity in venture capital report and cited data from Kauffman Fellows Research Center that found diverse founding teams have higher investor returns compared to founding teams that are all white. The report also highlighted data from Cambridge Associates, which found that new and emerging fund managers are constantly at the top of the asset class.
“The Alliance is putting a stake in the ground [saying] that we want to do more, we want to do better, and that means driving more investment to diverse founders, it means hiring more diverse staffers, it means mentoring, that means internships,” NYCEDC’s President & CEO Andrew Kimball said. “We’re very excited.”
Other firms have signed on, including Citi Impact Fund, M13, Streetlife Ventures and Primary VC. The Alliance is still in the early stages; members hope to start working together in the next few months. It builds on Mayor Eric Adam’s economic recovery plan, which focuses on helping underserved entrepreneurs have greater access to capital. Its mission is essential given the fact that almost 30% of businesses in New York City are minority-owned, with Black-owned businesses in particular seeing a dramatic increase.
“It’s clear that diverse founders consistently outperform, and we have an opportunity in New York City to harness our unmatched diversity to build the most robust and inclusive innovation hub in the world,” Kimball continued.
The NYCEDC’s work is essential and timely, given the backlash to DEI brewing in the ecosystem. California SB 54, which Gov. Gavin Newsom signed last week, requires firms operating in the state to report the diversity breakdown of who they back. As debates ensue on the role of policy in increasing diversity in venture capital, private organizations have taken to helping increase diversity on their own terms. The Venture Alliance takes inspiration from the PledgeLA, which was launched by the Annenberg Foundation and the City of Los Angeles.
Local efforts like this matter, Kimball said, and he sees hope for an organization like this throughout the nation. “We feel like we can hopefully turbocharge the effort by having it open in New York,” he said. “We’d love to see it expand beyond the five boroughs.”
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