Women and Diversity in Venture Capital

Hana Mohan

9min read

We recently wrote a post that spotlighted women entrepreneurs in male-dominated industries, which offered advice on how women can navigate hostile business spaces successfully. But there was one industry that we didn’t include, which is among the least diverse career paths around: venture capital. Diversity in venture capital is in such dire straits, we wanted to give it a standalone post.

Statistics around diversity in venture capital are bleak for the eager, but non-traditional, investor. One of many (equally disappointing) analyses found that 70% of employees at VC firms were white. Just 11% of the teams that make investment decisions at venture capital firms are women, and the number of those in leadership or founding positions is very low. Only 7% of VCs are women of color.

Of course, this imbalance has consequences beyond workplace inequality; angel investors and VCs tend to invest in ideas they perceive as valuable, or in founders they can relate with, creating an echo chamber and skewing success toward other white cis men. (Startups founded by entrepreneurs from marginalized groups like MagicBell, an inbox for notifications, typically have a harder time tapping networks outside of the dominant Silicon Valley brotherhood.)

Women founders accounted for 2.2% of all VC investments in 2018, regardless of their industry or ethnicity (and data says that number may be declining). For founders of color, the number dips dramatically. Black founders, regardless of gender, receive only 1% of VC funding; Black women accounted for .0006% of that. Over the last ten years, Latinx women-led startups raised .32% of all VC funding.

A few pioneers from underrepresented group are breaking the mold and setting up investment funds exclusive to historically marginalized founders. Among them is Pipeline Angels, an angel investing group (with a VC-in-Residence program) that is on a mission to change "the face of angel investing and creating capital for women and non-binary femme social entrepreneurs.” Anisa Flowers, Pipeline Angels’ COO, was kind enough to discuss the experience of operating as a Deaf, Black First Nations queer femme in the investment world--and how Pipeline Angels is poised to make a difference.

Though born in Canada (she’s Woodland Cree), she spent half of her life in Compton, California (unceded Tongva Territory) and half of her life in a middle class neighborhood in San Diego, California (unceded Kumeyaay Territory).

“Unsurprisingly, my experience was exactly what one may assume it was,” she said, explaining that her appearance and Deafness set her apart from other students in High School and college--where mainstream folks often assumed her differences equated to ignorance and inability.

Anisa Flowers, COO, Pipeline Angels

In what ways has your identity and life experiences helped to bring something new and needed to the investment space?

I often think of my work as purely supportive in the operational sense (which I love), but I suppose it has been supportive beyond that. Since I work with so many entrepreneurs, our interactions tend to be very quick and efficient with little time left to have deeper conversations surrounding the language and purpose of their businesses. Additionally, regarding boundaries, that simply isn’t the agreement that they’ve made with me coming in. I do have the occasional individual that will ask me about something they notice in our conversations (my pronouns, the text-only note next to my phone number, etc.) and that can lead to more complex conversations, but typically they are quite basic.

When it comes to our members, there’s a different story and a different agreement there. I do step into the role of an educator and advocate for the needs of my communities and others. This happens throughout our time together, but it’s something we really focus on during our unconscious bias workshop. We hold this beautiful setup on the first day we meet the members where we sit in community to talk about privilege, the various struggles of marginalized communities, the terms used to talk about those struggles, the systems and stereotypes that create and feed those struggles, and how our members can begin to dismantle said systems and stereotypes in the rooms they’re in.

This is the foundation of our work. This allows our members, who will eventually interface with a ton more entrepreneurs than I will, to go out there and be advocates. This allows the wisdom of my experiences to go beyond me. This, for me, is the most effective way to jumpstart change (and of course, leading by example). As Pipeline Angels continues to be as inclusive as we can, the way we do things will continuously be noticed, and others will begin to move in the right direction as well.

How did Pipeline Angels come into existence, and what is the mission?

While I do believe this question would be more accurately answered by our founder, Natalia Oberti Noguera, who launched this company in 2011 (and who has worked tirelessly since then), I’m happy to give my perspective from a little bit over three years in!

Pipeline Angels was launched out of a need, as it was one of the first of its kind. To put it very simply, when we think of white supremacy as a lurking and predatory eagle with claws, we can acknowledge that it has its claws in absolutely every facet of life, and angel investing and entrepreneurship is no exception.

"When we think of white supremacy as a lurking and predatory eagle with claws, we can acknowledge that it has its claws in absolutely every facet of life, and angel investing and entrepreneurship is no exception."

The main funders were wealthy white men from very specific geographic areas, and in turn, the main founders funded were other white men in their network. Where did that leave the rest of us? Women, non-binary people, and men of color were left out of this space for far too long--so Natalia set out to do something about it. And she did. To this day, Pipeline Angels has graduated 400+ women and femmes from our angel investing boot camp and invested in 80+ portfolio companies.

Pipeline Angels’ mission is simple: to change the face of angel investing and create capital for women and non-binary femme social entrepreneurs. We want to support our communities in doing well by doing good. This is why we invest at the friends and family level; that first check not only supports their initial financial needs, but lets them know that we believe in, value, and support their work--even when the world doesn’t always feel the same.

What does Pipeline Angles look for in a company?

One thing that’s really special about Pipeline Angels is that our members, not our organization or our team, own the entire selection process.

One of our goals as a company is to continuously shift the status quo, to shift the numbers so that eventually not only the entrepreneurial landscape but the landscape of entrepreneurs who are actually supported in being given chances to succeed, begins to be more representative and more inclusive.

While our team comes from myriad communities, and while we hold oceans of compassion and consideration for all marginalized communities, if we were left to make all of the decisions about who receives funding, we’d be risking not being as inclusive as possible due to the limitations of even our life experiences. We wouldn’t be doing our job.

Not only do we work to include as many folks from different communities as possible (both investors and entrepreneurs), but our program includes several pieces that challenge our members (investors) to dig deep and think about their communities, the communities they are passionate about serving. We challenge them to think about the values surrounding those communities and how to support those communities when [the founders] stand in front of them and pitch their businesses. This is how we make sure marginalized communities are taken care of. The abundance of women and femmes from various experiences who are in the room directly informs the perspectives we have to work with as we move into those pitch summits and prepare to make a difference.

Aside from incredible, brilliant, and motivated entrepreneurs, it was the awareness of the need for Black people to have access to owning their land that brought us Hurry Home. It was the awareness of the need to create systems that support folks with college loans that brought us LoanSense. And it was the awareness of the need to support people who give birth (not just cis women) with post-partum products that brought us NyssaCare.

LoanSense, a Pipeline Angels partner

What challenges has the firm faced, given how unique and progressive the idea behind is?

Honestly, I have to say that I feel incredibly grateful for how receptive individuals in this space are to our work. Perhaps that means folks who aren’t into what we do simply avoid us. We are progressive; we are a company that saves a seat for the concept of intersectionality at every table we create.

This has meant that often times cis women enter the room with the understandable expectation that they’ll be bonding with us and fellow cis women about how terrible it is to be a woman in this space. They aren’t wrong. However, as we hold white men accountable in our conversations, and we challenge many of our members to consider the rooms in which they are the white men. Are they hearing people in Deaf spaces? Are they skinny people in fat spaces? Are they cis women in trans and non-binary spaces? Are they white women in spaces that hold women and femmes of color? And what does that mean?

That can be a tough thing to grapple with. As brave of a space as we work to create (thank you to Micky ScottBey Jones for the concept of brave space), many aren’t ready for these conversations. The reality is that external change comes only after internal change.

"As brave of a space as we work to create...many aren’t ready for these conversations. The reality is that external change comes only after internal change."

Additionally, not only are we an angel investing organization holding pretty high standards within the space itself, but we’re doing it as a small team of three young women and femmes of color. The stigmas that are held against us because of the makeup of our team are not lost on me. But know that we are more than capable--not in spite of, but because of--who we are. As my boss Natalia has said, “When the most marginalized lead, that’s when inclusion happens.”

Less than 1% of VC investments go to startups founded by black women. The numbers aren't that different for different underrepresented groups. Why do you diversity in venture capital is a problem, and how can we change that?

Two words for [why diversity in venture capital]: white supremacy. There’s an undeniable bias, both conscious and unconscious, both of which, to be crystal clear, are racist. How do we fix this?

Acceptance: There needs to be an acceptance of two things. One: the bias exists. Two: if you aren’t a Black woman or femme, you should be listening, not speaking or signing, because you aren’t the expert on solving this.

Listening & (Un)Learning: Listen to Black women and femmes, wholly and completely. This isn’t a “take what you want, what makes you comfortable, what resonates, and leave the rest”—take it all. Secondly, the amount of resources is incredibly abundant. Seek them out, learn, unlearn, and learn again. If I had a penny for every resource out there, I’d have enough money to buy the next election. Do the work. The onus is on you.

Acknowledge & Dismantle: Acknowledge your privilege. Sit with it, learn it. How does it manifest in your personal and professional life? Where and how can you dismantle the system? Do it. Remember that anything you have to lose is a drop in the bucket compared to your Black women and femme counterparts.

As you work through these steps, bring Black women and femmes into positions of power (yes, even give them power over you). They know what you don’t. They don’t have the biases you do. They can change problems that you cannot yet even recognize. Check your ego at the door, and pay and praise them accordingly.

What pieces of advice would you give to entrepreneurs from underrepresented communities who want to pursue their dreams of launching a business?

My piece of advice? Step (or roll) into your power. Lean into what is uniquely you and yours. Everything that has happened in your life--things that have healed and things that have hurt--has given you wisdom and perfectly positioned you to pursue your dreams.

I am able to so clearly see the unlocked potential of Black people, Indigenous people, LGBTQIA2S+ people, disabled people, and marginalized communities at large. This world has smothered us with falsified stories of success, entrepreneurship, and more; it’s to no one’s surprise that these stories almost never contain us (unless we're being tokenized, that is).

This makes moving into that space feel scary at best, and completely impossible at worst. You are absolutely unstoppable when you step (or roll) into the life that contains all of who you are. If your business is in alignment with that, you are doing both yourself and this world a disservice if you let it pass you by.

As I say this, I completely understand the very real barriers to entry for us. I do. It’s going to be harder, it’s going to be more frustrating, the lows are going to feel lower. At the same time, companies like Pipeline Angels are behind you. We can’t fund everyone but are working to change the systems in place so that these barriers no longer exist. This takes time, and this investing space isn’t perfect, but in case no one has yet, I’m inviting you in the door, because there’s power in that, too.


Follow Pipeline Angels on Twitter, and connect with Anisa on LinkedIn.

Interested in taking a look at SupportBee?

Sign up in seconds—no credit card needed