06/04/2021
An abundance of research shows that most investors view white, Western-educated men as “most worthy” of investment across a number of asset classes. In the US, venture capital investments in women sits at $4.9 billion – a mere 2.3% of industry totals, and the stats are even worse for female founders of color. So how do we improve venture capital investments into women-led ventures?
Companies like SheEO, a nonprofit venture capital firm, is striving to lower barriers to entry for venture founders by designing an inclusive due diligence and screening process. Their approach doesn’t require the use of credit scores or an investment committee to decide which business it will lend to; SheEO instead leans on its global investment community to democratically vote on who will be funded. SheEO also takes steps to educate its investor network on issues of race and ethnicity bias – this has organically led to 75% of Canadian finalists considered for investment being Black, Indigenous, women of color and/or LGBTQS2S+. Proving that equitable process and building relationships across racial, cultural and economic boundaries can produce “power with” rather than “power over” outcomes for the entire community.
Read the full article by Denise Hearne and Alyssa Ely in the Stanford Social Innovation Review
https://bit.ly/3fVfRg8
Lack of access to capital is a longstanding and well-known barrier to equity for communities of color and women, but overcoming systemic injustices will take more than moving money. How investments are made, and the power dynamics behind those decisions, need to change, too.