Walking the walk: Where the rubber meets the road for gender and racial equity in tech
Although not the literal definition of insanity, I often find myself relating to the common aphorism: “Insanity is doing the same things over and over and expecting different results.” In my work, I often see the same strategies repeated to achieve greater racial and gender equity within entrepreneurship and technology — only to realize that all we’ve achieved is the same dismal results.
After the share of total venture capital invested in women-led companies reached an all-time high in 2019 of 2.8 percent, investment in women entrepreneurs actually fell in 2020 to just 2.3 percent. This after years of investors, entrepreneurs, tech industry leaders, and other stakeholders calling for more equitable funding, arguing both the moral case that capital should be distributed more equally, and the business cases that data show that women-led startups perform at least as well as startups launched by men, and sometimes better. A recent survey of 200 venture capitalists revealed that 60 percent acknowledge there aren’t enough women or entrepreneurs of color in their portfolios, and 83 percent don’t think investing in more diverse founders is unusually risky — and yet, three out of five admit that investing more broadly isn’t a priority. Morgan Stanley estimates that by overlooking women and entrepreneurs of color, the venture capital industry is leaving a trillion dollars in potential returns on the table.
Even that most reliable motivator of human behavior — money — hasn’t moved the needle. We still live in a world in which CEOs and other leaders make impressive one-time donations to causes, or post inspiring comments on social media without implementing, or even giving serious thought to, the concrete policy and procedural changes needed to turn those commitments into action. There’s lots of tire spinning going on, but the rubber isn’t meeting the road.
I call this divide the difference between civic engagement (speaking out, one-time actions) and systemic action (changing frameworks to provide for sustainable, long-term equitable outcomes like more women and people of color in leadership roles). Racism and sexism are deeply rooted in our culture, hard-wired into our political, social, and economic systems, and it’s now clear that merely calling for change and provoking well-meaning expressions of goodwill won’t produce the truly just, inclusive economy the nation seeks and deserves.
Across the public, private, and philanthropic sectors, there are specific behaviors and policies we can adapt that will help us move from civic gestures to systemic change.
- Press release leadership is not enough.
Oftentimes, we see “press release leadership” — for example, releasing a company statement celebrating International Women’s Day, and yet when you look at the policies within the company, there is no formal family or parental leave, limited vacation days, and a lack of women or people of color in leadership roles. We need leadership that aligns the impact of the decisions with the intent of justice.
- Those we seek to serve show us the way.
Sometimes, the most obvious solution is right there — if you are seeking to better serve your employees, ask them how to do so. If you want to change the number of women and people of color you’re hiring, there are countless articles written by those communities detailing how. If you still aren’t sure, there are technical assistance organizations that can provide training, resources, and insights to build better cultures, systems, and outcomes. There is no excuse for not doing better by those we seek to include and uplift.
- Accountability makes it stick.
Let’s agree to measure consistently, transparently, and publicly the progress and setbacks we make regarding gender and racial equity. We only accomplish what we can measure, and are able to correct course only if we keep track of how we’re doing. We also must ensure we’re aligning incentives to achieve gender and racial equity, such as a link for performance relative to diversity, equity and inclusion goals to career advancement and compensation growth. An example of this is the Nasdaq’s newest requirement regarding board diversity.
- Myths must be dispelled.
We regularly hear things like, “there’s a pipeline problem,” meaning there aren’t enough women or people of color to launch, lead, and grow tech startups and venture funds. It’s not true, so let’s stop saying it.
- Limited partners (LPs) have leverage and influence.
LPs can easily adopt requirements for diverse investment portfolios relative to founders, C-suite, and board members and increasingly are doing just that. Culture is starting to change, but behaviors are a bit slower to adjust. To really make an impact, we need all LPs to adopt requirements for diversity in their investment portfolios. Let’s pull every lever we have to get them to do so.
- Women and people of color deserve money.
We need to ensure women founders are not just getting advice and mentorship — but are actually receiving capital. We know that who gets funded depends in large part on who is doing the investing (the phenomenon has a name: “homophony”). Therefore, diverse investors and fund managers must be funded and empowered. They have the expertise, networks, and curiosity to change the face of portfolio investments today. Further, majority fund managers and investors (angel groups, venture capital firms) must measurably commit to adopting accountable policies aimed at funding more women and investors of color.
- Public policy should facilitate investor and entrepreneur diversity.
Policymakers should pursue two broad categories — incentivizing investing in women and minority-founded companies through means like tax credits, and promoting diversity among investors by reducing burdensome hurdles for smaller funds like registration and disclosure requirements.
We cannot continue to have the same conversations, and engage in the same sort of behavior, and expect different outcomes. Excluding women (particularly Black, brown, and indigenous women) from dignified workplaces, leadership roles, and positions of influence across the tech and startup industries is barring us from the idea exchange necessary to create a thriving and inclusive world. And obstructing women from greater economic participation holds back the economic growth and dynamism from which we all benefit. We must turn the national consensus for progress into a national action plan to achieve that progress — with specific strategies and policies to implement and measure progress. Perhaps then we can expect different outcomes.
About Leslie Lynn Smith
Leslie Lynn Smith is the National Director for GET Cities (Gender Equality in Tech) at SecondMuse Foundation. She is building a national movement to create a tech economy that celebrates and elevates women and other marginalized genders. Her work is powered by a vision for American cities that leverages economic justice and inclusion to enrich and empower individuals, families and communities. Under Smith’s leadership, GET Cities launched in Chicago and Washington, D.C., where it is working to shift power in the local tech economy to women, trans, and non-binary people with a focus on Black, Indigenous, and people of color to transform the industry into an engine for equity.
She brings to the role years of experience in economic empowerment work and community-based business development. Before joining GET Cities, Smith served as the founding president and CEO of Epicenter, a nonprofit hub for the greater Memphis entrepreneurial community; president and CEO of TechTown, Detroit’s most established business incubator and accelerator; and prior to that, director of business acceleration for the Michigan Economic Development Corporation.
