How do you make VC more diverse? Maybe start with the training schemes

Kauffman Fellows is diversifying its board and rethinking its business model in an attempt to make its investor classes more accessible.

Read the full Protocol article here.

On Tuesday, the Kauffman Fellows unveiled its most diverse class yet: Of 61 investor trainees, 41% are women and 49% are people of color. It also announced that its board is now the most diverse it’s ever been, thanks to three new members.

The program is betting that the board’s increased diversity will help maintain the growth in diversity of its fellowship cohort — a virtuous cycle in a program where its group of fellows helps nominate and evaluate future trainees.

Going forward, Kauffman Fellows CEO Jeff Harbach sees this approach as one way to develop a more inclusive venture capital industry.

“I’m not going to tell any particular firm what to do about their next hire or their partnership dynamics or whatever else, that’s for them to figure out,” Harbach told Protocol. “But gosh dang it, if you’re not doing your part in making your firm and the venture ecosystem look more like society as a whole, then you’re lagging behind. It’s not good enough.”

The Kauffman Fellows’ approach of leading from the top is just one way the venture community is tackling racial inequality. Earlier on Tuesday, for instance, the National Venture Capital Association unveiled its new nonprofit, Venture Forward, to make opportunities in venture capital accessible to people of all backgrounds.

The announcements from the Kauffman Fellows and NVCA were months in the making and not just a reaction to the news of the past few weeks. But the Black Lives Matter protests in the wake of George Floyd’s murder have magnified the importance of the venture community tackling racial inequality that’s pervasive in its ranks.

“I’m very hopeful that this is a moment of change,” Harbach said. “I can’t imagine having so much momentum over the last couple weeks with so many emotional stories being shared that this would just go away or fall on deaf ears, and it gives me that hope that I know that we’re not alone in this. There are people that have been working on this intently and will continue to work on it.”

The investor training program has been working to improve representation in its fellow classes for years and has graduated notable alumni like Kleiner’s Mamoon Hamid, Bessemer’s Elliott Robinson, Aspect Ventures’ Jennifer Fonstad, Defy Ventures’ Trae Vassallo and Andreessen Horowitz’s Chris Lyons.

But the last year has been “phase one” of a process to have its board more broadly reflect society, Harbach said. That includes adding the three new board members: Kauffman alumni Marlon Nichols (MaC Venture Capital), Melissa Richlen (MacArthur Foundation) and Allen Taylor (Endeavour). Their additions bring the board to one-quarter Black and three out of eight women. Next, Harbach wants to add more international representation to the board.

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