“Diversity is not a checkbox, but rather a commitment that needs to be part of a company’s DNA from the start as they will be a better business for it."
AUSTIN, Texas (PRWEB) March 26, 2019
Entrepreneur and former venture capitalist Stephen Straus, along with more than 50 local entrepreneurs and investors, today launch The Startup Diversity and Inclusion Pledge in Austin, Texas. Straus plans to expand the pledge nationally in 2020.
“In my nine years at Austin Ventures, I can count on one hand the number of pitches that I heard from an under-represented person — a woman, a person of color, or someone who identifies as LGBTQ — as the founder or CEO”, said Stephen Straus, creator of The Startup Diversity and Inclusion Pledge and co-founder and CEO of KUNGFU.AI. “I personally made only two investments into a company with co-founders who weren’t either white men, Asian men or Indian men - and none were CEOs and none were women. And that was roughly the same for the entire firm the entire time I was there and representative of tech. That’s bad.”
Diversity and inclusion matter for a wide variety of reasons, including that it is better for business, increases investment returns, lowers volatility, and drives innovation. And while female founders receive less venture capital funding than their male counterparts, there’s data that shows that female founders outperform their male peers.
“I wrote the pledge to be hard. But, diversity is hard,” continued Straus. “What we really want to happen is that this becomes the norm. If you’re an entrepreneur, then every time you go into the garage to start a company, diversity and inclusion need to be on your mind from day one — before you’ve allocated any equity. That is key to really helping break systemic inequality. Of course, diversity and inclusion also help you build a stronger business because diversity increases success and returns.”
Key elements of the Pledge for companies include:
- Committing to an inclusive workforce, workplace and marketplace culture, policies, and practices
- Committing to use the Walker Rule for interviewing
- Committing to workforce diversity, transparency, and public self-reporting of diversity metrics
- Committing to pay equality including equity grants
- Committing to conducting unconscious-bias awareness and training throughout an organization
- Committing to creating a formal discrimination and harassment policy and a process for anonymous reporting of workplace issues related to discrimination and harassment
- Committing publically to the Pledge itself
In addition to startup companies taking the pledge, there is a version of the pledge that venture capital firms, angel investors and other investors of startup capital can take that will encourage diversity and inclusion among their investment professionals and the startups they back.
Key elements of the Pledge for investors also include, in addition to the above-stated commitment for companies:
- Committing to encourage portfolio companies and their boards to take The Startup Diversity and Inclusion Pledge by including standard suggested language in all term sheets
- Committing to taking a self-defined percentage of pitch meetings, starting at 10%, from underrepresented founders and CEOs — including women, people of color and people who identify as LGBTQ
- Committing to mentoring underrepresented founders and CEOs, including women, people of color and people who identify as LGBTQ
The core idea of the Startup Diversity and Inclusion Pledge is that startups and investors pledge to take a few concrete measures in the way they operate their company that should, over time, increase the number of women, people of color and people who identify as LGBTQ within their ranks.
“We’re proud to be among the first partners to sign the Startup Diversity and Inclusion Pledge,” said Heather Brunner, CEO of WP Engine. “Diversity is not a checkbox, but rather a commitment that needs to be part of a company’s DNA from the start as they will be a better business for it. I especially appreciate that Stephen and team have put a big emphasis on providing enabling resources. It’s one thing to make the pledge, and it’s quite another to follow-through and be well-supported throughout the journey.”
The centerpiece of the pledge is The Walker Rule, which is inspired by the NFL’s Rooney Rule. The Rooney Rule requires every NFL team to interview at least one minority candidate for head coach vacancies. In the years following its implementation in 2003, the number of minorities hired as head-coaches dramatically increased.
The Walker Rule is named after Madam C. J. Walker (1867–1919) who was America’s first female self-made millionaire. She was an African-American entrepreneur, hair care industry pioneer, philanthropist, patron of the arts, political activist and one of the 20th century’s most influential businesswomen. That’s unbelievably impressive given she was born only two years after the civil war ended and built her company during the height of the Jim Crow era.
Notable investors who have signed The Startup Diversity and Inclusion Pledge include:
- Next Coast Ventures
- Silverton Partners
- Active Capital
- True Wealth Ventures
- Moonshots Capital
- Capital Factory
- Techstars Austin and Techstars Impact
- Southwest Angel Network
- Hurt Family Investments
Notable companies that have signed The Startup Diversity and Inclusion Pledge include:
- WP Engine
- Quantified Communications
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About The Startup Diversity and Inclusion Pledge
Diversity increases success and returns.
The Startup Diversity and Inclusion Pledge is a roadmap for startup founders, CEOs, and investors to build better companies and a more inclusive world. Launched in Austin, TX in 2019, the pledge offers resources for implementing the pledge that encourages startups and investors to be more intentional about building their teams and culture.
To learn more, please visit https://diversitypledge.org