Look Who’s Coming to the Investment Dinner—Diversity Increasing in Venture Capital, But Barely

The typical venture capital investor is still a white, middle-aged man. But the picture might be changing, albeit at a slow pace, according to a report released yesterday by Dow Jones and the National Venture Capital Association. In fact, the report notes, the percentage of VCs with ethnic backgrounds other than Caucasian is already slightly higher among those who have worked less than five years in the industry.

The report is based on a survey of 500 persons working in venture capital. Of these 75 percent were men, 25 percent women. At the same time, 88 percent of these professionals where white, 8 percent Asian Pacific, 2 percent Hispanic, and 1 percent African-American. It’s easy to agree with GigaOm, which calls these findings pretty anticlimactic. But if you look at the newcomers to the profession, those with less than five years experience in the venture industry, you can see the number of whites dropping to 82 percent.

“As you look at the younger professionals entering the industry, we are seeing more women, minorities and foreign-born nationals choosing venture capital as a career,” said NVCA president Mark Heesen in a statement. “We have entered an era of venture globalization which will require different perspectives and experiences and we believe the face of venture capital in 2020 will be much different than it is today.”

The question, of course, is how you define “a much different face”—after all, the shift from 88 percent white to 82 percent is hardly an extreme makeover. Nevertheless, according to some local venture professionals, there is at least some anecdotal evidence that points to ongoing change. “The numbers are still low,” says Karin Klein, a vice president at SoftBank Capital in Boston. “But the good news is we are starting to see, especially at the entry and next step level, a lot more diversity.”

Klein says that the change is even more noticeable in the entrepreneurial ranks, as a number of SoftBank’s portfolio companies are run or founded by women. This includes the Huffington Post and The NewsMarket, a web-based video marketing and distribution platform where co-founder Shoba Purushothaman serves as president and CEO.

Agreeing with Klein’s general assessment is Joe Medved, a SoftBank associate who also serves as co-chair of the New England Venture Network, a group of about 350 young VCs—typically associates, principals, vice presidents, and other non-partners. “I’m certainly not going to call it fairly diverse,” Medved says. “But you are seeing a lot of rising females.” For instance, he says, another NEVN co-chair is Geraldine Alias, formerly an associate at Battery Ventures, now a senior associate at Fidelity Ventures. Medved also points out that venture is “becoming more of a global business,” so it makes sense that venture will also become more integrated ethnically, as firms seek to tap into global markets and need people with experience with different cultures and business styles.

The survey also checked the respondents’ educational background. Your average venture capitalist is a well-educated person, probably with a master’s degree or a PhD from one of the nation’s top universities, with Harvard as the number one favorite. He or she probably has some experience in other businesses as well; only a handful of people go directly into venture capital from a university, while over a fifth have been entrepreneurs or worked in startup companies.

If you aren’t sure what diversity of educational background would look like, check out this article about Yale dropout-turned VC, Chuck McDermott, a general partner at RockPort Capital.

Erik Mellgren is a Swedish journalist who worked for Xconomy Boston in 2008 as part of the Stanford Innovation Journalism Fellowship program. His real job is with Ny Teknik, a leading technology and innovation magazine in Sweden, but he loved seeing the Red Sox at Fenway. Follow @

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