7 Things Startup Investors Can Do to Improve Tech Diversity Now

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Small changes can make a significant difference when it comes to promoting equal opportunities in tech. By Terrence Yang (Founder, Yang Ventures)

This post originally appeared on Quora.

Startup investors can do a number of things to promote diversity, including:

1. Fund Teams with Diverse Founders*

If you start by funding diverse founders, your impact on diversity in tech can be huge. This is by far the most important thing an investor can do.

Since 2013, three of our eight startup investments are in startups led by female founder CEOs. Five of eight have founder CEOs of color.

I point this out not because this is some great achievement, but because the great majority of investors do not do as much.

We want to do better.

We currently have one African American founder CEO, two Korean American founder CEOs, one Chinese Singaporean founder CEO, one lesbian founder CEO and one older (40s) founder.

In recruiting diverse employees, I believe founders are more credible if the leadership includes women and minorities. Back in the day, I worked at Merrill Lynch headquarters. During my first five years there, the CEO was African American. That made it a lot easier to recruit people of color.

2. Recommend Diverse Speakers

If you’re asked to speak on a panel or at a conference, also recommend one or two others who might be a good fit for the event.

Recently Women 2.0 reached out to me to speak in Santa Monica. I couldn't make it but I recommended two minority females to speak (one being my wife, who makes funding decisions with me and is excellent).

When I spoke at the J.W. Marriott at an event organized by a Hispanic American, I recommended an African American female founder to co-panel and she got the gig.

3. Organize Events with Diverse Speakers

I organized a capacity-filled founders and funders panels sponsored by HBS Alumni Angels, General Assembly and the two law school alumni groups I belong to. One moderator was African American female and the other was Asian American female. Four of my eight panelists were female and two of eight were minority female.

4. Introduce Female Founders to Other Investors

A friend from Silicon Valley was recently in Los Angeles. I introduced a lot of founders to him. He remarked that 70 percent of the founders I introduced to him were female.

5. Support Events Promoting Diversity

Anyone who knows me knows I dislike traveling east of the 405 (except to UCLA). One time my wife and I went to USC. She spoke at one event produced by a minority female.

Then we went to another one — also at USC — to support our friend who happened to be minority female. That friend ended up launching SoGal Summit, a great conference. And I was the only male judge or speaker out of dozens of people.

6. Start with a Diverse Funding Team

The Computer History Museum in Mountain View has — I am not kidding — walls plastered with photos of 100 percent white men. This is where some accelerators hold their Demo Day.

At Yang Ventures, we just invest my money. It is a small amount and now just goes to Precelerator. That said, people of color and women make up most of our team. Over half our Precelerator startup founder CEOs are women and people of color.

7. Support Folks Like Ellen Pao

It’s easy for me to support Ellen Pao because my brother is friends with her (not close) from Harvard Law School and because he is really selective about who he associates with. I just manage my own money and it's not much.

I don't know with certainty what I'd do if I were like other investors, heavily dependent on male-dominated LPs for investment and at risk of being excluded in the next fundraising round. The other VC partners could easily form a new partnership under a new name, like VCs in L.A. sometimes do).

* Note. Above includes only post-wire, direct investments.

Three of nine single-asset fund investments were in portfolio companies with founder CEOs and two of those three were 100 percent female founders.

Data is as of the time of investment.

We omitted multi-asset fund investments giving us exposure to another 40 or so startups indirectly. The portfolio managers are Y Combinator graduate startups Wefunder and FundersClub. We do not control what investments they make on our and other fund investors' behalf.

Have you taken steps to promote diversity in tech?

Photo credit: Rawpixel via Shutterstock.


About the guest blogger: Terrence Yang is a startup investor in a dozen companies and about 40 more as a limited partner. He is the first investor, main adviser and board member of Infobitt (crowdsourced news facts), founded by Larry Sanger, a co-founder of Wikipedia.