We are living at a time when our voices are more critical than ever. You hear that everywhere, from everyone, and all the time. And you know what? It’s absolutely true.
Global warming has gone from a scary scenario in the far future to real, imminent reality. Religious persecution in the U.S. has gone from a 16th century injustice that's been conquered to a terrifying possibility 250 years later. Slavery has moved from a shameful part of American history to modern day law and order. Did you know that sex trade is rampant on the web? Double click on that term and you will find the dark web filled with underground child sex rings and human trafficking exploits. The International Labour Organization estimates that there are 20.9 million victims of human trafficking globally, with 68% of them trapped in forced labor; 26% of them are children, and 55% of them are women and girls. It also estimates that forced labor and human trafficking is a $150 billion industry worldwide. That’s close to the GDP of Portugal. Does this make you sick? Good, it should.
This is compounded by the fact that we are a consumer generation. As these scary stories unfold, we gobble them up. We have content coming out of our pores; we are inundated by every feed out there, news outlet, social platform, blogs, hell, this very article is an instance of it. We are a straight-up "gimme gimme" generation, and with new apps rolling out every day, we can have anything sliced up and served to us in any fashion we like the moment we see it. Groceries, designer labels, mindfulness, and mediation. Virtually everything is for sale, including things that should never be commoditized, such as human rights.
There is enough drama out there in the world today to make anyone want to crawl into a hole and hide. So what’s a generation to do? The answer: #Resist. There are future generations to protect and vulnerable people to defend. As Nelson Mandela said, “Our human compassion binds us the one to the other - not in pity or patronizingly, but as human beings who have learned how to turn our common suffering into hope for the future.”
Hope, fueled by action. That’s why we built Bridge2Act. The goal is to bridge the gap between sobering realities and small actions that people can take to make the world a better place. We hoped that the aggregate of these small deeds would build on each other to create something beautiful, inspiring, and impactful.
Through this process, we have been blown away by the impact of the individual contributor. With social invigoration enabling a generation of influencers to use their social star power to galvanize followers into action, we have witnessed the power these perfectly-curated personalities yield in providing a voice for the world’s most exposed.
We flipped the script, and focused on a generation of shoppable content that fights back. What if others used their channels as well to create content that promotes awareness and activism, simply and securely? It would be a masterpiece. Let’s point all our gimme-gimme tendencies to apps focused on furthering social good, progress, and equality. And yes, I am biased, since I co-founded a company that does just that, but there are others out there doing the same.
Nicholas Kristof and Sheryl WuDunn partnered with Show of Force and PBS to create A Path Appears, which is a favorite of mine. They “provide a unique and essential narrative about making a difference in the world — and a roadmap to becoming a conscientious global citizen… [it] examines the struggles women face in the United States and abroad, and the inspiring individuals working with them to create effective solutions.”
The influence of celebrities has always been known, through things like ad campaigns and spokesmodels. However, lesser-known is when celebrities use their app-based notoriety to create awareness and solicit activism. We witnessed that firsthand last year on Giving Tuesday when we launched #IDreamOfChallenge at Bridge2Act. Through millions of social impressions and numerous donations, this group of amazing humans cultivated tremendous impact for over 40 nonprofits in 24 hours. Take HBO’s Ballers and Marvel’s Inhumans beauty Serinda Swan. Serinda has hundreds of thousands of followers and fans across her various social channels and her activism has always been a hallmark of her Hollywood brand.
While some celebs leverage philanthropy to promote their personal brands, others are aligned to causes fundamentally at their core. Serinda is one of the latter and she is not alone. Ashley Judd, Blake Lively, Regina Hall, Eva Longoria and so many others have made activism part of their brand and it’s creating a significant opportunity for them to pay it forward in a way that strengthens their star appeal.
We are a generation that can move mountains. We start revolutions, topple governments (think: the Arab Spring), make and break stars, and promote equality from our phones. Why can’t we help the unfortunate while we are at it?
The essential questions become: will you be part of enacting and furthering the solutions when they present themselves? Will you take action when promoted and donate to incredible organizations doing work to create a better world for us all?
What will you do about it? This is your chance.
Amid the mainstream conversation about inclusion and justice in the workplace, otherwise known as #MeToo, a Silicon Valley venture capital fund considered how they can be more inclusive of the women, minority, and LGBTQ entrepreneurial communities.
Their solution? Ask the CEOs they currently fund to promise to hire senior-level employees from diverse backgrounds.
Lightspeed Venture Partners, a venture capital fund that has investments with blockbuster startups such as The Honest Company, Affirm, and HQ Trivia, has asked its portfolio company CEOs to sign a “side letter" affirming their commitment to consider women and other underrepresented groups for senior jobs and new spots on their board of directors.
Can making pledges— or even hiring a C-Suite level employee to manage diversity efforts— really make an impact on the funding gap for multicultural women-led companies?
Many experts say it's going to take systemic change, not letters of intent.
It is well reported that the amount of investment going to multicultural women-led companies is incongruous to the entrepreneurial landscape and the performance of their businesses. Between 2007 and 2016, there was an increase of 2.8 million companies owned by women of color. Nearly eight out of every 10 new women-owned firms launched since 2007 has been started by a woman of color yet, these businesses receive an abysmal 0.2 percent of all funding. Amanda Johnson and KJ Miller, founders of Mented cosmetics, were just the 15th and 16th Black women in history to raise $1M in the fall of 2017.
The multicultural women who do defeat the odds to get funded receive significantly less than male founders. The average startup founded by a Black woman raises only $36,000 in venture funding, while the average failed startup founded by a White man raises $1.3M before going out of business.
The implicit and explicit bias not only impacts individual multicultural female founders, it could be stifling innovation. For example, companies with above-average diversity on their management teams reported innovation revenue as 45 percent of total revenue compared to just 26 percent of total revenue at companies with below-average management diversity. That means nearly half the revenue of companies with more diverse leadership comes from products and services launched in the past three years.
In our economy today, venture capital is responsible for funding the work of our most innovative companies. Venture capital-backed U.S. companies include some of the most innovative companies in the world. In 2013, VC-backed companies account for a 42 percent of the R&D spending by U.S. public companies.
With a wealth of multicultural women entrepreneurs and evidence to support the performance of diverse companies, why does this funding gap persist?
According to Kristin Hull, founder of Oakland-based Nia Impact Capital and Nia Community, many traditional investors consider women or minority-led businesses as a category in their portfolio, like gaming tech or consumer packaged good. Hull, who focuses on building portfolios where financial returns and social impact work hand-in-hand, argues gender and ethnicity are not a business category and investors who dedicate a specific percent of their portfolio to diverse companies are the ones missing out.
“We are doing this backwards," says Hull. “Adding diverse, women-run companies actually de-risks an investment portfolio."
Hull points to research that has found women are more likely to seek outside help when a company is headed for trouble and operate businesses with less debt on average. What's more, a study conducted by First Round Capital concluded that founding teams including a woman outperform their all-male peers by 63 percent.
Ximena Hardstock, a 43-year-old immigrant from Chile experienced this bias first hand before she raised $5.1M for her tech startup. “How do you get an investor to notice you and take you seriously?" says Hardstock. “White men from Harvard have a track record and investors are all looking for entrepreneurs that fit the Zuckerberg mold. But a woman from Chile with an accent who started a technology company? There is no track record for that and this is a problem so many women of color face."
Hardstock came to the U.S. from the suburbs of Santiago when she was just 20-years-old. Alone with no family or connections in the U.S., Hardstock worked as a cleaning lady, a bartender, and a nanny before she began teaching and working in education. “I had a lot of ideas and Chile is still a very conservative country," she says. “Most women become housewives but I wanted to do something different. So, I moved to the U.S."
Hardstock went on to earn a Ph.D. in policy studies, served as vice president of Advocacy for National StudentsFirst and worked as a member of Washington DC mayor Adrian Fenty's cabinet. Her experience working in both education and government exposed her to a need to simplify the process of connecting lawmakers with their constituents. As a result, Hardstock founded Phone2Action, a digital advocacy company that enables organizations and individual citizens to connect with policymakers via email, Twitter, Alexa and Facebook using their mobile phones.
Because venture capital and private equity are not necessarily meritocracies, Hardstock initially struggled to get in an audience with the right investors despite her company's growth potential, her experience, and her education. In fact, it wasn't until she won a competition at SXSW in 2015 that she could get an audience with a serious venture capitalist.
While it may seem like symptoms of a bygone era, both Hardstock and Hull say the path to investor relationships is forged in places where many women of diverse backgrounds are not – ivy league organizations, golf courses and late night post-board meeting cocktails attended mostly by White men of means.
The history of venture capital has never been very balanced, according to Aubrey Blanche, global head of diversity at Atlassian software development company and co-founder of Sycamore, an organization aiming to fix the VC funding gap for underrepresented founders. “White and Asian men have built the venture system and for generations have been seeking out people like themselves to invest in."
Personal and professional networks are critical for founders to connect with investors, but many multicultural women don't have access to the networks their White peers have. According to a study conducted by PRRI, the average White person has one friend who is Black, Latino, Asian, mixed race, and other races. This common situation makes getting that all important warm introduction to established VCs very challenging for multicultural women founders.
“Is the ecosystem of your network equivalent to your net worth? Absolutely," says Hardstock. “For us, we have to build our own ecosystem and recreate what happens on the golf courses and at the Harvard reunions."
To Hardstock's point, most multicultural women with entrepreneurial aspirations lack that Ivy League network. According to reporting published in The New York Times, Black students make up just nine percent of the freshmen at Ivy League schools but 15 percent of college-age Americans. This gap has been largely unchanged since 1980.
While notable female investors such as Arlan Hamilton, Joanne Wilson, and Kathryn Finney are actively working to close the funding gap for women of color, only seven percent of current senior investing partners at the top 100 venture firms are women. Less than three percent of VC funds have Black and Latinx investment partners. Without an influential network, Hardstock and entrepreneurs like her are left screaming for a seat at the table.
When Black, Latina, and Asian women founders do get in the room with the right investors, they have to work harder to get the investors to relate to their products and services. “Entrepreneurs solve problems they understand," says Blanche. “When multicultural women entrepreneurs present their businesses to a homogenous group of male investors who may not be equipped to understand the idea, they may pass on an amazing business."
Take, for example, the founders of Haute Hijab or LOLA. Founders of both successful startups would have to explain the market for their services to a table occupied mostly by men who may never have considered that Muslim women want more convenient access to fashion and have never considered women might prefer to purchase organic tampons.
This lack of familiarity typically means reduced funding for women and a host of other consequences.
As one recent study pointed out, even the way investors frame questions to women can impact funding. According to the Harvard Business Review, female founders are often asked “prevention-oriented" questions focused on safety, responsibility, security, and vigilance. Male founders, on the other hand, are often asked questions focused on hopes, achievement, advancement, and ideals.
When all of these factors are considered, a side letter may not be enough to begin to close the funding gap.
Both Blanche and Hull say real change can be made by democratizing information and education on impact investing. Both women say educating investors and MBA candidates about impact investing is the best way to overcome current bias.
Blanche's organization, Sycamore, produces a newsletter for new angel investors who want to help close the funding gap while making money in the process. Hull's firm has an internship program for multicultural girls from Oakland to expose them to the worlds of investing, entrepreneurship, business leadership, and financial literacy.
“I'm excited about the changes I see," says Blanche. “I see more firm employing the Rooney Law on an institutional level, an increase in smaller firms looking at underserved communities, and the democratization of institutional funding."
Hull adds that as long as multi-cultural women-led firms continue to show returns and outperform or perform on par with companies founded by White men, the investor community will rethink their portfolio strategies.
This piece was originally published in 2018.