VC Diversity Pledge
Like a number of other VCs, Base10 recently made a statement supporting diversity, but we believe we must do more to affect real change. To start, we want to share more about what specific initiatives we are implementing.
The initiatives below are a small step in a long journey. We are talking to and will follow the guidance of a number of remarkable organizations like Precursor Ventures, Illumen Capital, and Plexo Capital who started this journey years ago.
1. Financial support, in perpetuity, to organizations fighting inequality and fostering diversity
Base10 is committing, immediately and in perpetuity, 1% of all annual operating profit from our management company as well as 1% of carried interest in all Base10 funds to fund organizations fostering diversity. This is a very small first step that will grow and, we hope, become significant over time. For context and as a rough calculation: If every VC pledged just 1% of profit and 1% carried interest per year, we could collectively raise $200M+ each year (According to NVCA, there was $444B of AUM in U.S. venture capital at the end of 2019. If that $444B gave away 1% of management company profits (assuming 2.5% mgmt fee and 25% margins) and 1% of carry (assuming 3.0x average fund returns, 20% carry, 10 year life), then it would be $205M per year in donations.).
This money will go to organizations fighting for racial equality like NAACP or EJI and organizations fighting for better representation of minorities in tech and venture capital. 50% of children born this year are minorities and by 2024, 50% of the U.S. population will be minorities. Not only is this the right thing to do, but VC needs to support minorities now so they are prepared to build the next generation of great startups in our industry.
2. Investing in more minority founded and minority run businesses
We invest in Automation for the Real Economy businesses that are solving problems that affect 99% of people in industries like logistics or construction. To find founders with a genuine interest in solving those problems, we need to meet more founders of diverse backgrounds. One step we are taking is to work more closely with the firms whose mission it is to back founders with diverse backgrounds so we can co-invest more often and actively share deals with them.
Fortunately, there are many great firms focused on this mission and they are generous enough to spend time with us. These organizations include 645 Ventures, Equal Ventures, Kindred Ventures, Precursor Ventures, and many others.
3. Hiring and fostering a diverse team at all levels of the organization
We are creating new processes to find and hire more minorities. One example is a summer internship program focused on attracting minority talent which we implemented in conjunction with the Black Venture Capital Consortium. Other organizations such as Code2040 or HBCUvc are also focused on organizing similar programs.
Training to recognize implicit bias. The regrettable lack of diversity in venture capital is not only about sourcing candidates but also about promotion and retention. Challenges in these areas are often a consequence of implicit bias. Base10 is working closely with our LP, Illumen Capital, to train all Base10 employees on how to reduce implicit biases.
4. Making a time commitment to get to know underrepresented communities
Spend more time with the minority community. In the past, we have spent time with organizations like Founders Gym, the LTX Fest, Code2040, SMASH, and the BluePrint Project. These organizations do a great job of providing educational and inspirational opportunities for people of all backgrounds. We are committing to a minimum number of hours per quarter that every employee will devote to various organizations.
Accountability: How do we keep ourselves honest?
The Kapor Center reports 83% of leaders in tech are white. Tech companies are becoming more transparent with their diversity statistics, and VC should do the same. This is going to be a long journey and we must rely on one another to remain accountable. As a firm, Base10 plans to create specific OKRs for the initiatives above and report on a yearly basis. We believe that, as an industry, only by measuring leading indicators will we achieve lasting results.
Written by Base10 with input from many of our peers