VC firms need to release portfolio diversity data

Tech companies generally take diversity seriously, but the same can't be said for venture capital

For several years, there has been a growing movement to increase diversity and inclusion in the tech industry. It kicked into high gear in October 2013, when Tracy Chou, then an engineer at Pinterest, called on tech companies to release employee demographic data. Chou started things off by reporting Pinterest’s engineering team’s gender diversity data.

Since then, tech companies have more willingly released their data. In 2014, Google released the industry’s first diversity report, showing it was 61.3% white and 69.4% male. Fast-forward to today and Google is 54.4% white and 68.4% male. Still not great, but an improvement.

Reporting diversity data is not the only task required of tech companies looking to foster diversity and inclusion. But examining this data internally and then reporting it publicly helps to hold these companies accountable. There’s also a saying in business: “you can’t improve what you don’t measure.” That applies here, too.

In general, tech companies are taking diversity seriously, but the same cannot be said for the venture capital industry.

Venture capital is not diverse, no matter which way you look at it. Whether it’s the partners themselves or the companies they invest in, there is a lack of diversity all around.

Many studies have shown that the VC industry is dominated by white men. A 2018 analysis from The Information, for example, found that just 1% of decision-makers at VC firms are black and only 1.5% are Latinx. Another analysis found just 1% of venture capitalists are Latinx and only 3% are black, according to Richard Kerby, a partner at Equal Ventures.