Talk Is Cheap, VCs Should Show Us Traction From Their Diversity Efforts

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It’s 2021, and VC firms still have a glaring gender and racial diversity problem. Despite having access to technology, they aren’t utilizing it in a way to level the playing field. Global VC funding for female founders dramatically dropped this past year. 

Crunchbase data showed that more than 800 female-founded startups globally received a total of $4.9 billion in venture funding in 2020, through mid-December, which was a 27 percent decrease over the same period last year. The drop is extremely disturbing considering the efforts of VC firms and diversity groups, founded by VCs, that have been around for years that have not made much of an impact. 

The amount of funding received by Black and Latinx founders is even worse. One percent of VC-backed founders are Black, according to a study by RateMyInvestor and DiversityVC. As of Aug. 31, 2020, Crunchbase found that Black and Latinx founders raised $2.3 billion in funding, representing just 2.6 percent of the total $87.3 billion in funding that has gone to all founders. Moreover, it should be noted that the majority of female founders who received venture funding are white, (Read more...)