The Redlining of Black Corporate America

Marlon Nichols, managing general partner at MaC Venture Capital, also sees financial justice as a problem of what American business is losing. Nichols, one of the few Black decision-makers in Silicon Valley venture, says that failing to add Black talent is costing businesses money. Management consulting firms from McKinsey to BCG have argued that diverse entrepreneurial teams are routinely more profitable. From 2000 to 2018, all-white executive startup teams on average returned two times the investment in an acquisition or IPO, compared with a larger 3.3 multiple with diverse executives, according to a study Nichols co-authored.

Venture, which holds the keys to which entrepreneurs get money, has acted like a closed society. Becoming a VC is not like going into consulting or banking, Nichols explains. Jobs are rarely posted, but instead are shared among friends and trusted acquaintances in the community. If you are a Black graduate of, say, Howard University and not Stanford or Harvard, and are therefore outside the network, “How do you find out about the job?” Nichols says. “And if you are not networked, how do you compete for it versus those who have been in it for however long?”

Entrepreneurs who are funded will continue to look the same — vastly white and male — “unless the check writers begin to look different and teams begin to look different.”

The problem is not intent — the tech community genuinely thinks it is meritocratic, Nichols says. “What we fail to realize is that business is always personal and never fully objective. And this business is hugely subjective.” Nichols, the co-founder of MaC Venture Capital, is among a small but growing number of Black-run venture firms that are directly targeting underserved founders, including Backstage Capital, Collab Capital, and Harlem Capital.

An unfortunate reality in Silicon Valley, Nichols says, is that “we like to be around people with similar experiences.” Entrepreneurs who are funded will continue to look the same — vastly white and male — “unless the check writers begin to look different and teams begin to look different.”

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