Key takeaways
- If Black and Latinx-owned businesses were equitably funded and scaled, an additional $876 billion would be added to the US economy.
- Learn ways to change perceptions about who makes a successful entrepreneur.
- How to be an architect for change? Don’t take “no” for an answer and bring facts with you.
Silicon Valley Bank recently held an event to focus on ways to encourage more people of color to seek opportunity in entrepreneurial fields – and engage companies, investors, and other industry allies to step up and tear down systemic barriers in the way.
It’s time to Step Forward – Fueling Diversity in Innovation, the apt title we chose for the event. It takes a big commitment of time and resources, and nobody can do it alone. Silicon Valley Bank is committed to action through our signature Access to Innovation program. We are now asking you to do your part. We are sharing riveting facts and poignant personal stories from our event to inspire new thinking and galvanize action. If one of these stories of amazing people resonates with you, please vow to take action and be an agent for impact.
Fact: If black and latinx-owned businesses were equitably funded and scaled, an additional $876 billion would be added to the US economy.
(Source: Marlene Orozco, Ph.D., Stanford Latino Entrepreneurship Initiative research)
What is Claude Grunitzky doing after recovering from a COVID-19 hospitalization? He is rallying several top business leaders – including Dick Parsons, the former chairman of Citigroup and former chairman and CEO of Time Warner – to launch The Equity Alliance. It is a $25 million fund of funds that invests in emerging venture capital fund managers, particularly managers of color and women.
Claude, once a penniless immigrant from Togo, used sheer grit to launch a global media company backed by Goldman Sachs. He’s not forgotten his roots and is a relentless advocate for democratizing access to capital. “Think of yourself as unstoppable,” he advises the next generation. “The time is now, this is a moment when we can actually start changing the game, opportunities are opening up,” he says, asking those already in the ecosystem to do more than cut checks (but that’s good, too!) for those coming up now: make introductions and encourage thinking big. I will always be grateful for the mentors who took time for me. Take time for someone who doesn’t look like you.
Fact: Among computer science grads, 9% are Black and 10% are latinx yet in Silicon Valley only 2% of tech workers are black and 5% are latinx.
(Source: Marlene Orozco, Ph.D., Stanford Latino Entrepreneurship Initiative research)
Do we need to change perceptions about who makes a successful entrepreneur? Yes, absolutely. SVB and Share Ventures commissioned a white paper by Marlene Orozco, lead research analyst and Ph.D. with the Stanford Latino Entrepreneurship Initiative, titled Playing to Win or Playing Not to Lose? Black and Latinx Risk-Taking in the Entrepreneurial and Innovation Ecosystem. Marlene finds that “Black and Latinx innovators can double down on their diverse perspectives, experiences, and training to offer a competitive advantage.” Still, she notes there are barriers: lack of exposure to the innovation ecosystem, difficulty gaining access to networks and jobs, and the role institutions of higher education play as “gatekeepers that shape perceptions of high-status jobs.”
At the Step Forward event, we heard from entrepreneurs who would fit most people’s definition of risk-taker -- but they scoff at the notion. Friends of Richie Serna, co-founder and CEO of Finix, a successful fintech startup, warned that he was making a mistake to pursue startup life – “you can’t code, it’s not a rocket ship startup, you have no family money.” He ignored them, instead taking inspiration from his immigrant parents. “Dad crossed the border, hiking through mountains. That is real risk,” he says. “Leaving my cushy consultant job, not that risky.”
Miriam Rivera, a leading Latina in venture capital and co-founder of Ulu Ventures, says the pressure of raising funds pales in comparison to her mother’s harrowing story of survival on her own in a foreign country: “She was kicked to the curb at 15, and left for the mainland to start over. Her courage and independence stuck with me.” Still, added Rivera, in VC circles, “Women are asked about risk more than men. That is strange.”
Fact: Of the $69.1 trillion global financial assets under management across mutual funds, hedge funds, real estate, and private equity, fewer than 1.3% are managed by women and people of color.
(Source: Stanford University SPARQ and Illumen Capital research)
How do we move beyond this tiresome paradigm? The astonishing access gap comes from pivotal Stanford University research sponsored by Illumen Capital, titled Race Influences Professional Investors’ Financial Judgments. Two Black asset managers, veteran leaders in their field, shared their perspectives. It comes down to two strategies that I am familiar with: Don’t take “no” for an answer and bring facts with you.
Paula Pretlow, former senior vice president of The Capital Group, an investment management firm, now sits on several foundation boards, shares this: “I have an awesome fiduciary responsibility to push in the direction of inclusivity, so people of color and women have access to the billions of dollars being entrusted to managers. I put the conversation in the middle of the table, and don’t take it out until there is positive action.”
Confront people with facts, says Jim Casselberry, Chief Investment Officer of 45 Bay Partners. He performs what he calls “triage”. “I discern and dissect the process to show them when they are making decisions for capriciousness not investment reasons.”
Fact: The average black family has 1/10th the wealth of an average white family.
(Source: Broken Chains documentary)
Step Forward also featured a discussion with a producer and cast members of the awarding-winning new documentary “Broken Chains”, which examines the cause of the nation’s wealth-generation gap for Black Americans and offers strategies for closing it, with a focus on tech. The film is produced by Golden Gate Ventures partner Michael Lints and is sponsored by SVB. If we need a fist-pumping call to action, this is it from film participant Jotaka Eaddy, founder and CEO of Full Circle Strategies, a social impact consulting firm.
“There is no question about how talent is distributed - it is distributed equally. But opportunity is not,” she says. “We have an opportunity at this moment, with this industry. This is not only about wealth generation. This is also about the future of work, the future of jobs, how society will operate,” she adds. “People of color need to be builders, developers and owners to build a foundation for generational wealth, and access and opportunity for the future of the country.”
As Paula Pretlow says, let’s put this conversation front and center on the table, and commit to keeping it there until there is positive action.
To watch video of Step Forward conversations, please visit the webinar page. To keep informed of opportunities to make a difference, subscribe to the Access to Innovation Quarterly Newsletter.
