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Turning Words into Action — a VC’s Commitment to Diversity

Written by Guy Filippelli | Apr 16, 2020 6:23:00 PM

We are a venture fund. Our mission is to invest in great entrepreneurs and accelerate the growth of their companies in a way that results in an outsized return for our investors. But we are also:

  • Operators and founders who have an obsession with culture and team building.
  • Veterans and patriots with a deep regard for our country and those who serve at home and abroad.
  • Baltimoreans, and have been through and part of the rebuilding process since Freddie Grey died on April 19, 2015.
  • Leaders who believe that action starts with understanding and appreciating the lives and experiences of others.

We unequivocally believe that as a community and as a nation, we are at our best when our diversity is our strength, not our crisis. Our world is the world of startups and entrepreneurs — and when we measure diversity in our own sector, we certainly have come to appreciate how much better we can be. For us, progress is a moral imperative and an economic opportunity — and something that inspires us to action.

This is a super important time, and we know we have a role to play. As investors and as members of the tech community we have the ability to influence, and thus the responsibility to drive progress, at least in our own backyard — and perhaps the opportunity to reach beyond.

If we do our job right, we humbly believe that our actions can be a force for good and a template for others. Not started, but accelerated by the demonstrations since George Floyd’s death, we want to expand what started as an internal conversation and open it up by sharing the actions we’re taking and lay out our rationale for doing so.

We’re sharing because we want to spur conversation, not looking for congratulation. We want others to tell us what they are doing, where they believe our ideas are good, and where they think we’re falling short.

We have optimized our deck intake process.

In analyzing the specifics of how much time we spent and how decisions were made on the hundreds of companies we screened, we recognized some bias in our own triage process. In some cases, we over-invested time and focus on deals we had personal connections with. At a more fundamental level, though, we realized that our initial screening decisions are constrained by our ability to consume a single slide presentation — and that to improve this process, we need to provide entrepreneurs a stronger opportunity to inspire us about their business as early in the process as possible. We now ask all entrepreneurs who want to pitch us to respond to a series of screening questions that provide us with both quantitative data and qualitative narrative about the company. These responses are then immediately sent out to every person on our team.

This change does two things. It gets every deal in front of every member of our team, from our associates to our Managing Partner. We know not every venture fund can do this, but as a small and nimble team of eight, we believe this gives us a big advantage. Any one on our team can get inspired and become a champion of that company. Secondly, these questions give the entrepreneur a platform to inspire us before we even jump on the first call, enabling us to get excited about companies that we would normally never have had the time to screen.

We have created better onramps for underrepresented entrepreneurs.

Deal flow at a venture fund has a traffic pattern. There’s a big highway, and alongside that road is a prepaid express lane called the warm intro, usually enabled through long-standing personal connections. We appreciate that when we begin to focus on entrepreneurs from underrepresented communities, these connections are frankly less likely to be there. By analyzing our deal intake process and building an inclusion commitment into our thesis, we created a second express lane — say, the HOV lane — for underrepresented founders. We’re collecting voluntary data from founding teams on whether they identify as Black, Latino, women, or LGBTQ+, as well as their veteran status, during our optimized deal intake process. This allows us to hold ourselves accountable to our commitment to seeing more deals from underrepresented founders and from those who aren’t in our network and enable them to accelerate through our process. If a founding team meets our investment thesis, is in our geographic focus, and has what we perceive is a good idea, we’re going to take the meeting. And if we’re not the right fit, we’re going to do our best to make the introduction to a better fit and provide honest feedback.

We are facilitating conversations across our portfolio.

We are dedicating time and space monthly for our founders and management teams to come together as a cohort to learn, educate, and collaborate in understanding the complexities of this issue and make more informed, thoughtful decisions. So far, this has taken the form of open session video calls led by our managing partner or portfolio ops team. In our most recent session, our founders shared the challenges they’ve had creating space for conversations of race and protest internally with their teams.

We are enabling action within our portfolio companies.

In times of crisis, conflict, confusion there’s a single quick and critical decision to be made as a leader. You can restrict your team, you can give them permission to express themselves, or you can enable them. We are empowering our founders to be enablers, encouraging active participation in this important national debate, not just give passive permission. As investors, we are happy to see additional resources being leveraged towards recruiting in new places and money being put to reaching more diverse networks. We are supportive of employees being given the opportunity to not be forced to take leave to peacefully protest and to volunteer. We believe in taking a more aggressive stance on permitting employees to contribute their thoughts to social media without fear of company retribution. We believe that companies where team members are encouraged to bring their full selves to work are those that achieve success.

We have made mentorship hours part of our job responsibilities.

In our role as a venture fund, our team members regularly provide feedback and mentorship on an ad hoc basis. Going forward, each of our team members are expected to provide these mentorship hours on a weekly basis during work hours. Because talking to people is our job. Building community is our job. Being an active contributor to the network is our job. If you’re looking for input, advice, feedback, or just want to connect, all of our email addresses and LinkedIn profiles are included on our team page. We’re looking forward to talking with you.

We are investing at the firm level in community partnerships.

The guiding principle of our investment thesis is that we invest in extraordinary teams. When it comes to our community, that means being a partner on extraordinary teams. Beyond the impact that our team members can make one-on-one with entrepreneurs, we are investing in firm level partnerships that provide value to the community. We know that there are others — Jeff Cherry at the Conscious Venture Lab, Maggie Villegas at BCAN, Jay Nwachu at Innovation Works, Wayne Swann at Morgan State — who are the leaders of this work in our community. We believe that our role now — and the role of all innovation funders — needs to be more than supporters, more than allies. We are here to be companions in this work. It’s just like we tell our entrepreneurs, when we work as a team, the sum is more than its parts, it improves the culture, it makes us better together.

We are refactoring the recruitment and hiring process within our portfolio companies.

Many startups, including those that we have run ourselves and those that we have invested in, begin building their teams by hiring people from their immediate network, people that they have worked with before or friends and family members that are willing to take on a risky situation with them. While we see this as a bootstrapping necessity at the very early stages of a company, once a company takes on venture funding, we know it is in the best interest of their evolution and growth to diversify their talent pipeline. We are actively working with our companies to create equitable hiring processes that will rapidly enhance their businesses.

Because of who we are, where we come from, our experiences and our passions, and the way we’ve seen first hand the capacity for entrepreneurship and investment to change lives and communities, we know we must be at our best to get this right.