By The Buzz | Equal Opportunity Today | October 8, 2021
Kimmy Paluch is the founder and managing partner of Beta Boom, a venture academy that provides product, marketing and fundraising coaching and services to the next wave of founders. Prior to Beta Boom, Kimmy founded a Silicon Valley innovation firm where she defined the strategic vision and design of award-winning interactive products for high-profile clients including TiVo, LeapFrog and HubSpot. Currently, Kimmy sits on the executive leadership board for VentureCapital.org, Womenpreneurs and UnVentures. She is also a part of the leadership circle for The Conservation Lands Foundation. Kimmy earned her B.A. in Computer Science from Dartmouth College and MBA from MIT Sloan School of Management.
In the wake of the murder of George Floyd and nationwide protests, venture capital firms are making newfound commitments to invest in, or at least evaluate, potential investments that are led by diverse founders. Although commitments such as SoftBank’s $100 million fund to support people of color may seem like a leap forward, when we consider the $120 billion of dry powder (available funds remaining to invest) that the industry saw in mid-2019, these proclamations are merely a drop in the bucket. Let’s not even mention Andreessen Horowitz’s paltry $2.2 million donation-based fund intended to grow to $15 million to invest in “underserved” founders.
In order for us to really see change in the entrepreneurial investment landscape, we need not only significant allocations dedicated to overlooked groups, but also an overhaul of the existing mechanisms by which these systems function.
As investor Monique Woodard stated during a BLCK VC webinar, “You have to fix the systemic issues in your funds that keep Black founders out and keep you from delivering better returns.”
It is important to note in this statement that this is not just a moral imperative, but an economic one, as well.
Data abounds that more diverse leadership and teams lead to better company performance and female founders return 35 percent more on the dollar than their male counterparts. The new mantra “make the hire, send the wire” has echoed across social media, but the truth is that it’s not just a simple fix of hiring one person or even making a single investment.
To achieve repeatable and enduring change, venture capital firms have to do what they have failed to do for more than 70 years: change the very way that the system functions in sourcing, evaluating and supporting deals.
So, what exactly do those action steps look like? Let’s take a deeper look.