The Venture Access Alliance wants to boost startup diversity in the Big Apple
Despite potential data suggesting otherwise, some venture capitalists are displaying a genuine commitment to diversity, equity, and inclusion, and their dedication is enduring.
The New York City Economic Development Corporation (NYCEDC) made a significant announcement on Wednesday: the introduction of the Venture Access Alliance, a coalition of 70 investors determined to enhance diversity within New York City’s startup ecosystem. This initiative is an integral part of the broader Venture Access NYC program, which also encompasses fellowships and career opportunities for diverse individuals aspiring to enter the field of venture capital.
New York City ranks as the second largest tech ecosystem globally, making this public-private partnership extraordinarily influential in terms of its potential impact. The Alliance is actively encouraging both companies and investors to compile diversity-related data and to increase the annual recruitment and funding of women and minority entrepreneurs. Subsequently, the Alliance seeks to monitor the city’s progress and motivate investors to financially support and execute initiatives that will foster diverse talent within the city.
The co-chairs of the Alliance are Jarrid Tingle of Harlem Capital and Fred Wilson of Union Square Ventures. They are collaborating with organizations such as the Ford Foundation, Annenberg Foundation, and Tech:NYC to steer the Alliance toward its goals. Tingle emphasized that the Alliance was established to ensure that New York City capitalizes on the potential of the upcoming generation of talent.
Tingle stated, “Creating an inclusive ecosystem is not only the right thing to do but also ensures that NYC doesn’t miss out on economic growth and innovation opportunities.”
The NYCEDC released its most recent report on diversity in venture capital today. The report cited data from the Kauffman Fellows Research Center, revealing that diverse founding teams tend to yield higher returns for investors compared to all-white founding teams. Additionally, data from Cambridge Associates was highlighted, indicating that new and emerging fund managers consistently perform well.
Andrew Kimball, President & CEO of NYCEDC, expressed his excitement about the Alliance, asserting that it marks a commitment to doing more and better, including directing increased investment toward diverse founders, hiring more diverse staff, and providing mentorship and internship opportunities.
Several other firms have joined this endeavor, including Citi Impact Fund, M13, Streetlife Ventures, and Primary VC. While the Alliance is still in its initial stages, members anticipate commencing collaborative efforts in the coming months. The initiative aligns with Mayor Eric Adams’ economic recovery plan, which prioritizes facilitating capital access for underserved entrepreneurs. This mission is particularly crucial given that nearly 30% of businesses in New York City are owned by minorities, with a significant uptick in Black-owned businesses.
Kimball emphasized the importance and timeliness of NYCEDC’s efforts, especially in the context of growing concerns about diversity, equity, and inclusion in the venture capital ecosystem. The recent California SB 54, signed by Governor Gavin Newsom, necessitates that firms operating in the state report the diversity demographics of their supported ventures. In light of ongoing debates about the role of policy in enhancing diversity within venture capital, private organizations are taking the initiative to drive diversity on their terms. The Venture Access Alliance is drawing inspiration from PledgeLA, initiated by the Annenberg Foundation and the City of Los Angeles.
Kimball believes that local initiatives like this are vital and sees potential for such organizations to proliferate nationally. He expressed the hope that the Alliance can serve as a catalyst for such efforts not only within New York but beyond its five boroughs.
