What‘s the diversity problem in the startup ecosystem? Of the thousands of VC partners out there, only 18% are female, and of the VC-backed founders out there, only 9% are female. And when you cut the statistics by race, the picture gets even more grim. Only 1 percent of venture-backed founders are black and 1.8% are latinx.
But with hyper-successful startups like Glossier, Rent the Runway, Briogeo and Bevel winning in the market, it is more important than ever before to be able to build diverse teams and businesses that understand a globalizing world.
Why exactly is the diversity problem so difficult to crack? Once a vicious cycle starts, it’s difficult to break the feedback loop. Often, unseen and insidious biases are hidden in our decisionmaking, as we tend to back people that look like us and who look like the people that had previously been successful. Jarried and Henri share how that sort of ‘pattern recognition’ often prevents us from seeing wholly new opportunities in communities we previously neglected.
How did Henri and Jarrid go about starting Harlem Capital? Henri and Jarrid discuss how they decided to pair up while at Harvard Business School to address the diversity gap. Additionally, Henri and Jarrid share a few of their experiences in investment banking and private equity that have helped inform their first few investments. The Harlem Capital also shares their lessons learned in raising a fund, from finding anchor LPs to the navigating the bureaucratic regulatory environment.
What are examples of how diversity generates better business results? The Harlem Capital team recently published a “Diversity in VC” report, highlighting the massive disparities across the board. Additionally, we discuss a number of quantitative and qualitative examples of how having a more diverse mindset expands your market, sharpens your product, and ultimately generates a better bottom line.
What are the consistent patterns across successful diversity initiatives? Differentiation in all forms of content, from the writing to the advertisements themselves need to scale as your audience grows. Jim and Roy share how they’ve kept the long-term in mind at Axios given their lessons learned at Politico… and how they plan to avoid the sluggish growth that has befallen some of the early internet media startups as they’ve lost their initial virality.
What’s a piece of content that’s changed Henri’s and Jarrid’s perspective?
Henri: Land of the “Super Founders” by Ali Tamaseb found a few interesting insights around who builds the $ billion unicorns we hold in such high regard. (email@example.com)
Jarrid: HUSTLE – by John Henry, a Venture Partners at Harlem Capital, follows the entrepreneurial struggle of diverse founders on Vice Media. (firstname.lastname@example.org)
Interested in learning more about Henri, Jarrid or Harlem Capital? Here are a few resources:
- Harlem Capital, A Backer Of Minority- And Women-Run Companies, Wins Investment From $108 Billion In Assets TPG
- The Firm That’s Challenging the Unbearable Whiteness of Venture Capital
- Meet The Brothas of Harlem Capital
Thanks for tuning into another episode of the Pattern Recognition Podcast!