(co-written with Katherine Boe Heuck, a MBA candidate at MIT Sloan (class of 2022); past intern at Versatile VC; and a current intern at Metaprop NYC.)
What can we learn from the best 40 venture capital investments of all time? Well, we learn to invest exclusively in men, preferably white or Asian.
We reviewed CB Insights’ global list of “40 of the Best VC Bets of all Time.” All of the 40 companies’ 92 founders were male.
- Of the 43 U.S.-based founders, 35 were white* American; four were white immigrant/first generation, from France, Ukraine, Russia and Iran; and four were Indian immigrant/first generation.
- Of the 19 Western Europe/Israel-based founders, all were white.
- Of the 30 Asia-based founders, all were natives of the country in which they built their businesses: 23 Chinese, three Japanese, two Korean and two Indian.
Of course, this dataset is incomplete. There are numerous examples of founders from underrepresented backgrounds who have generated extremely impressive returns. For example, Calendly’s Tope Awotona is Nigerian American; Sendgrid’s Isaac Saldana is Latinx; and Bumble’s Whitney Wolfe Herd is the second-youngest woman to take a company public.
That said, the pattern in the dataset is striking. So, why invest in anyone who’s not a white or Asian male?
The conventional answer is that diversity pays. Research from BCG, Harvard Business Review, First Round Capital, the Kauffman Foundation, and Illuminate Ventures shows that investors in diverse teams get better returns:
- Paul Graham, cofounder of Y Combinator (2015): “Many (Read more…)