The Myth Of Blackness In Venture
|Jun 4, 2020|
I am not an object of missionary charity, I am one of the people that built the country…
— James Baldwin
“Myth provokes explanation but accepts none of it. Where explanation absorbs the unspeakable into the speakable, myth reintroduces the silence that makes original discourse possible. Explanation establish islands, even continents, of order and predictability.”
These lines open the final chapter of one of my favorite books, Finite & Infinite Games by James P. Carse.
There is a myth across the startup ecosystem around the question of who gets to contribute, benefit, receive titles. And in the recent days the continual work of equality in this ecosystem, has been supercharged by the macro events within this nation.
So I’ve been wrestling with how to write this piece. As I wrestled to write my piece from last year about Backstage Capital. But as I was then, I am confronted now with the fact that I’m not hearing… what not only I believe to be true — but what my other Black peers are frustrated with as well!
The power of the myth, as so clearly stated by Professor Carse, is that it accepts no explanation.
Which is to say that if you stand on the benefiting side of any particular myth, you can parry explanations away daily. I feel this to be ever more true in the age of performative social media.
There is a myth in venture, and the overall startup ecosystem, and it centers around — like many struggles for equality in this country — Black people.
Like the construction of many myths, there are several pieces to it. Which makes it so easy to talk about in singularity, but hard to overcome in practice.
I write this while frustrated, and working through many pieces of this myth myself. I ask that you be patient and look at this writing with an open mind.
Reality & Optics
Venture is an incredibly easy target when discussing the nature of race and access to capital. Pick a random VC firm, go to their team page, and scroll. Take a screenshot, post it to Twitter — “Answer for this [insert venture fund]”
You’ve won the argument. Statements ring out about how we must be better. The cycle continues. And continues. And continues.
We do this with portfolio pages as well, with a little extra digging to whom makes up this founding class.
See the problem here, is that the argument is a replayed finite game. We are pushing the ruling party to admit guilt. And in seeing them admit guilt, we believe we’ve won.
But in their continuation of business, virtually uninterrupted, they’ve placed themselves ahead again within the infinite game.
What we are attempting to do is solve for two things at once.
Who is getting funded — the entrepreneur and their makeup.
Who is getting funded to fund them — the venture firm and the makeup of the team.
The optics of any problem is always the obvious piece in pointing out the inequality.
But the nature of reality becomes much more difficult. This really gets back to the why… and I would argue that the why is far more structural in the VC class than the founder class.
What happens when a potential VC goes out to raise a fund?
Well, this depends on who you are and the nature of the fund. Of course. You could have LP’s ranging from the Harvard Endowment to Sloan Kettering Hospital. You can also have family offices, of high net-worth individuals. We could (and you should) dive into the complexities of these issues — with someone more qualified than myself.
The note we must highlight here is how an LP reaches a yes.
“I’m surprised to the extent in which LP’s relied on other GP’s. For context, for perspective, for reputation. And in retrospect it makes sense. Because it’s an access controlled industry. It’s a capacity constrained industry…”
He continues on to discuss when other GP’s would call him, to tell him about the call they had where a potential LP was vetting him (Kanyi).
We already know whom the current GP class is. And we are aware of the constraints on the capital system. Additionally, we understand that venture is a semi-collaborative game. Deals are shared, fought over, lost. You want to have your gang in, and want others to weaken… in theory.
Kanyi had the benefit of working as a partner at Collaborative Fund. A track record, vigorously intelligent, etc. We can make a similar case for Charles Hudson, Lo Toney, Richard Kerby and more — also recognize the gender of this list.
These emerging Black fund managers were supposed to have a relatively smooth ride in raising their fund. Yet every story I hear directly from them, is anything but smooth.
Emergent fund managers are heavily co-signed by the current class of fund managers. There is a whole other conversation when it comes back to smaller funds that can rely directly on high net-worth individuals to fill out, but similar dynamics are at play.
Amy ☀️ @amysundaeRace is an awkward topic in Silicon Valley. We desperately want to believe that we are a meritocracy, that the best ideas win. But when pause to look at founders and funders, blacks and latinx are glaringly absent. How can we work together to correct this systemic failure?
The road towards diversifying emerging fund managers is a longer one. A typical fund can take 18 months to raise. To sign up for that journey is taxing, and anything but certain.
This is why, I urged Amy at Sequoia to take immediate action within her locus of control. In my opinion, the first step to progress is pulling in talented young Black associates. Something many large, established firms can do with little financial downside.
The most difficult job in venture to get, is your first job. Once you’re inside, we see how smoothly people can move between firms. In a game played by co-signs and “who was your teacher” — even at the entry level, this can kickstart change.
The optics of fund managers only show us the surface level of the interacting group. What is less obvious are the underlying mechanics of LP decisions. Which has been designed intentionally to be incredibly insular. Not driven by our precious belief in first order decision making, but by a perpetuating system where even as the fund managing class grows — it grows only through those they wish to introduce.
So when there are Twitter calls to “hire a Black partner” — I genuinely have no idea what you mean by that, and we should stop entertaining that as a possibility. That is not how this works.
The Assumptions Placed On Blackness In Tech
What do Black people in technology feel enabled to work on?
There seems to me to be this overriding belief that the most value a Black person can bring to the technology community is to turn their energy towards “Black things”.
This is to say that if you are not directly working towards diversity initiatives, funding other Black people, building directly for Black people — you are not the voice to be elevated. We see this displayed every time there is a question of “who should speak on this issue?” So often we turn, not to the practitioners of the subject that are Black. But to Black individuals simply saying Black individuals need to speak on this…
This is incredibly problematic. And here is the myth we’ve been building towards:
There is a belief — whether intentional or unconsciously held — that (beyond tokenism) the best that Black people can bring to technology, is to point out the bias that Black people face in technology.
It is a terrible thing for an entire people to surrender to the notion that 1/9th of its population is beneath them…
— James Baldwin
There is a need to paint an ideal image of a Black person within firms. Often times it being someone who’s primary contribution is being vocal about diversity.
But change comes when Black people that are doing the work to build and craft views on technology/design — are being held equal in thought by our white peers.
Contributing to the course of capital and emergent technologies that shape our society. For white peers to not do so — is to continually uphold the belief that their Black peers are less than. That their main priority should be towards their own. And that they have nothing to gain from an equal that is of a different skin tone than themselves.
This is what they must admit. And in admitting this belief, at least it would be honest. Otherwise they are performing the same song and dance to shy away from — in a way, competition from a larger pool of practitioners.
Before I close this section — I do not want my intentions twisted in believing that Black people that build technology / institutions for other Black people are not fulfilling their entire potential. This is not what I’m stating.
What I am saying is that these assumptions exist in our white peers as our primary value — and they back this belief through capital which in turn directs Black labor. I believe that this belief and capital flywheel has direct effects on what Black people believe is in their power to build. And becomes an enduring cycle that confirms the belief in our white peers.
I believe there is no stronger case of the harm this brings than Tristan Walker and Walker & Co. I have sat on this story for a long time, but I think now is an interesting time to raise certain questions.
Tristan was an EIR at A16Z — after, from all accounts, successful stints at Twitter and Foursquare. Primed to build any technology driven business he could think of, he’s guided to build a DTC company for Black people. The only other consumer DTC investment in the entire portfolio I could find for A16Z, was Dollar Shave Club.
Perhaps the other things he was playing around with, weren’t very good. Perhaps he was coming to the end of his EIR-ship and this was the most viable idea, that also had support from the firm…
When the acquisition was announced, the entire tech Twitter community was applauding the deal. According to Vox — most of the money invested in Walker & Co. was recouped. $40m invested, and an acquisition cost that is pinned between $20-40m.
So, failure. Yet we applauded. Why? I think the answer is because he was able to get that far. There should be a sense of sadness here.
The key here is that Black people need the same room for failure, and repeated failure that our white peers enjoy. And can turn their failure into narrative, in which they’ve emerged on the other side more enlightened.
But primarily we need the room to design products with the embodiment of our values, not tied to what is assumed of us — or else we will fail in a continually harsh manner.
Keep Charity For Charities — We Are Not A Charity Case
This will be the final section of this piece.
Yesterday, A16Z announced their Talent x Opportunity Fund — $2.2m (to start) for pre-seed funding donated by the partners at the firm.
I have always said that to really change things, Black founders need to return the fund.
However, carve-out vehicles and charity funds, remove us from direct relationship to the performance of fund managers.
This is intentional and says — again — that they do not hold our potential as equals, within the overall construction of their portfolio. We cannot continue to celebrate these initiatives, that divorce us from the performance of the primary fund. Where they place a Black person in charge, to deal with the Black half of the investments.
It is for this same reason, that I struggle to support funds who’s primary thesis is that of diversity. Too often it serves as a vehicle for high net-worth LP’s — typically fund managers elsewhere — to point to their contribution as their action towards equality, with little structural change to their own fund.
The reality that we exist in — is that we can not change the spiritual conditions of racism that pervades the design of our systems. But we can seek transparency, to embody a new set of values.
We’ve allowed this spiritual crises to fester, and grow. For many fund managers it has been quietly growing for decades. But we can seek repentance, followed by action.
In a way I pity them, because it is this spiritual condition that will prevent them doing their best deals, their most enriching collaborations, having fulfilled the potential of their careers.
It is nothing new — but a reflection of the spiritual condition of this country, that has endured for centuries.
What I’ve been meditating on for the past week, and what I still believe is true — is that America, more than any other nation, can be stronger. We are a country founded on continual revolution. And make no mistake, that is what we are witnessing now. This country was built on the backs of Black people — and it has no future without the progression of Black people.
I don’t do edits really, so excuse typos and things that don’t make sense.
Thanks so much for giving me your attention. I hope it was worth it, if not… unsubscribing will not hurt my feelings, and will give you back time you literally cannot have back.
1 — Judy Bowman