By Carmichael Roberts
Featured as part of NVCA’s VentureForward blog series for industry leaders to share their perspectives on why diversity and inclusion (D&I) are important for the future of VC, their firm’s activities and approach to D&I, and guidance for how we—as an industry—can drive meaningful change.
The protagonist in every story must face a struggle or a tension that will eventually come to define his or her success. For me, that tension is intrinsically woven into the color of my skin. I was born an African American male, and in my earliest years raised in public housing projects in the East New York section of Brooklyn. Poverty, gang violence and addiction were part of my daily view of the world. Fortunately, however, I received an opportunity that would forever change my life. I had the chance to attend a high school on Long Island, where a science teacher would help me discover a passion for biology and chemistry. The rest, as they say, is history.
Being different from everyone else has been a common thread throughout my career. I was one of very few African American students at Duke to major in organic chemistry and earn a PhD in chemistry. During my tenure at Harvard, I was the only African American postdoc who had received a National Science Foundation Fellowship for chemistry. While at Harvard, I worked in a world-class research lab. I became the only student in that research group – black or white – to switch from being a professor candidate to an MBA grad and serial entrepreneur. While most postdocs were pursuing the pure academic route, I went in a completely different direction. I recognized that a combined science and business background could make me stand out in the business world. When North Bridge Venture Partners recruited me years later as one of the very few African American partners in all of venture capital, let alone one with a PhD, I saw my unorthodox strategy pay off.
Standing out in a sea of sameness has proven to be my greatest strength. I have never felt the pressure to conform because I have always been different. Looking different from everyone else in the classroom or the boardroom has meant that there is almost an expectation that my voice, my ideas will also sound different. Great! That is exactly true because they were and I was different.
Here is the cool thing about “different” – it makes good business sense. The entrepreneurs and scientists who challenge the status quo are the ones responsible for the greatest innovations and the quantum leap advancements. Studies continue to show that women and minorities are wielding increasing economic power, and that high-tech companies that prioritize diversity see improved business and financial performance.
So, if we know this, why is change so slow? According to a 2016 report from the National Venture Capital Association and the Deloitte University Leadership Center for Inclusion, African Americans make up 3% of the venture capital workforce. Latinos make up 4%. Women are only in 11% of partner roles. This lack of diversity trickles down into the entrepreneur community, where we see less than 1% of venture capital dollars going to African American founders (CB Insights Report 2015).
I think change boils down to two things: results and accountability. People often ask me if I have faced racism and discrimination throughout my career. Hell yes, I have. I acknowledge that the road has been harder for me than many of my peers because of my background of being different. But one thing I have always loved about the venture capital community is that results breed respect. My strategy of investing in innovative materials was a major departure from the broader industry strategy of betting on IT, for example. While at North Bridge, my materials companies certainly stood out in the midst of the heavy deal flow in more traditional areas like software. But these companies grew and flourished, producing excellent results for the fund. Examples of “different” like this should not be concealed; they should be celebrated. The more we publish, share and revere the results of “different,” the more it will breed a culture where diversity is admired and prioritized. Sadly, the recent headlines about diversity and gender equality in venture capital are largely negative. It is important that we shed light on an issue that is plaguing our community, but it is equally important that we shine a light on the good. We must also celebrate the individuals and firms that do it right and get positive results.
Accountability is equally important. If founders demand to work with diverse firms that share their values, and if LPs prioritize diversity as part of their diligence process, perhaps we can move the needle. Actually, there is no need to reinvent the wheel here. In the 1990s, both Wall Street and the legal profession were hit with a number of sexual harassment lawsuits. As a reaction, third party auditors were hired to conduct internal reviews. Diversity & Inclusion departments were formed. Hiring managers were held to diversity metrics. More recently, 30 major law firms instituted the Mansfield Rule, which stipulates that firms must consider at least 30% women and minority candidates for any leadership position.
Today, I am raising my own fund called Material Impact Fund. In fact, it is more than just my own fund, I am starting my own firm, with friends I have known for many years. It is the culmination of a career establishing and perfecting my unique investment thesis. When it came time for me to build a team, we did not recruit against a typical venture capital mold or look to find individuals who shared our exact background and expertise. We did the opposite. We set out to find individuals who brought a voice to the table that is completely different from our own. When you look at our team, and our community of entrepreneurs, you will see that diversity – of gender, race and thought – comes together organically because it is so important to what we do.
Perhaps I had the courage to choose an unconventional path because I am a minority. I had no choice in some respects because I am branded different (unconventional) in US business settings based on the color of my skin. Or maybe the color of my skin really was the struggle and the tension that would come to define my success story. I never make excuses based on my ethnicity or because I started out poor in the rough and infamous Cypress Hills Houses in Brooklyn. If I am being honest (and I am!), that background made me stronger and, fortunately, my story did not end there. Today, not only do I have an opportunity and responsibility to create change in America, I also have the opportunity to build a venture fund where diversity is a formalized part of how we do business…a chance to lead by example. How cool is that?