Let’s be clear: The venture capital industry has lacked diversity. The good news is the industry is working to improve itself.
To begin with, as an industry, venture capital can only improve what we measure. In 2016, we set out to develop a rigorous methodology for tracking progress on diversity, equity and inclusion (DEI) in venture capital, and to measure and benchmark those data through our biennial VC Human Capital Survey.
The goals of the survey — powered by the National Venture Capital Association, Venture Forward and Deloitte — are to collect demographic data on the VC workforce across all firm types, sizes, stages, sectors and geographies, as well as trends on firm talent management and recruitment practices. We’ve learned that progress can be slow and seem discouraging, but we’ve also captured evidence that diversity (and firm practices to advance diversity) is increasing in some areas, even as other areas have unfortunately not seen the same pace of change.
We fielded the survey in 2016, 2018 and 2020, and released the outcomes of the third edition last month, featuring data (as of June 30, 2020) collected from 378 firms, a marked increase from 203 participating firms in 2018. Furthermore, more than 145 firms signed the #VCHumanCapital pledge to publicly commit to submitting their DEI data.
At a high level, the data showed that improvements in diversity among investment partners have largely been driven by the hiring and advancement of female investors, while there has been little progress in the equitable representation of Black or Hispanic investment partners.
However, the demographic composition of junior investment professionals reflects greater diversity and wider adoption of diversity-focused talent management and recruitment practices suggest some cause for optimism. The industry still has a long way to go, but here are some of the key insights and changes we identified from the latest survey.