One thing I’ve seen from both VCs and LPs over the past week is a hesitation to engage around race discussions. There are some who don’t believe they’ve done anything “wrong” and therefore see the whole thing as a distraction. Others are so uncomfortable with the idea of getting flamed or canceled despite good intentions that they’d rather do the absolute minimum.
If you’re a white professional in venture, you might feel uncomfortable tweeting or blogging about race. The way I think of it, I’ll never feel nearly as uncomfortable in my life as much as what I imagine a person of color might feel at a traffic stop.
Until that changes, I need to be taking these really tiny risks at a bare minimum.
Besides, if you’re not comfortable with making mistakes and learning from them—what are you even doing in venture?
While I got some very kind words on my recent writings, I heard from some founders that didn't feel like they got treated fairly—specifically around feeling patronized or dismissed—and that I wasn't showing enough action to improve on that.
My first reaction was to debate (if you know my personality, that's hardly surprising), but then I gave it some more thought and realized that I had a blindspot:
My dedication to honest and direct feedback to as many founders as possible has different consequences for different founders.
I try to get back to everyone—which is something not all VCs do. Sometimes, that just means I send off something quick, because of the inbound volume, like this:
“I’ll pass, because I just don’t think there’s enough money to be made here given how hard it will be to make each sale and what little you make per customer."
I figured better to get a quick something than nothing at all—or, just an “Interesting!” which is useless.
If you're in a more privileged position with lots of VC connections to pitch, you’ll either do one of the following things:
You'll come right back at me, tell me why and how I'm wrong—because at this point you have nothing to lose.
You’ll just think I’m dumb and will move on to try and find a smarter VC, showing just as much confidence in the next pitch.
One thing that I hadn’t considered before is that if you've had an extraordinarily difficult time getting people to hear your pitch because you’re not in certain networks and your lived experience has been being discounted and not taken seriously, my words are going to be taken differently.
It’s easy in my position to forget how much courage it takes to pitch something for any founder—but especially founders for whom stepping out and taking this kind of risk feels like it comes with a bigger downside. Founders from communities of color are less likely to have personal wealth to fall back on. They’re less likely to have those same insider connections to help get them that next job if it doesn’t work out. It doesn’t just feel like a bigger risk—it is a bigger risk and they have more on the line.
If you’re constantly reading that this system isn’t built to help you—and you aren’t finding any experiences to the contrary, your likelihood of just throwing your hands up and bailing from startups is higher. When I decide not to meet with someone or to pass on an opportunity, which I’ll unfortunately have to do for most pitches, I need to do a better job of keeping that in mind. I can try hard to be objective about the business opportunity without saying something that doesn’t make them more likely to drop out of the process of finding their next big thing entirely.
Sometimes, it’s not even a matter of being short with someone. It could be asking the same questions I would ask any other founder without thinking much about how it would be interpreted.
If someone doesn’t send over a financial model and I say something like "I don't see how this gets to $100mm in revenue", it's not a short jump for someone to hear that as "Your idea is small, and not important."
Straight white guys never hear it that way.
Similarly, when I say, "Can you show me a model of how you think this round helps you hit your goals?" that is often going to sound like a lack of interest and an unwillingness to just say no.
Fundraising can feel like a series of endless hoop-jumping--that investors who don't intend to back you will keep asking you questions until you give up instead of just saying no. What I have heard multiple times from founders of color and female founders is that it is exhausting and discouraging.
One thing I need to do better is to share context to my feedback for those founders I think might be feeling exhausted by this process, particularly underrepresented founders, and present more helpful solutions. Instead of saying "I don't see how this gets big" perhaps it would be better to say:
“A lot of founders pitch with a conservative estimate of what they believe they can 100% commit to, which I appreciate *after I've invested*--but investors aren't investing in the certain, we're hoping for the *possible*. I’m not sure if that’s how you’re positioning this or not.
Do you see any pathway to getting this business to a $100mm a year annual business? Can you show me a version of this plan with how it might be possible?
If that's not in the cards for your business, that still could make it a great business, but then the kind of capital I'm offering probably isn't a match for what you're looking for from a risk/return standpoint."
That's not perfect, but I'm certainly going to commit to working on better ways to share feedback—to make it feel like when I am interested, I’m actually going through a real process of serious due diligence, and when I’m not, to at least acknowledge the try a little better.
Don’t get me wrong—I’m still going to be super direct and honest, but it doesn’t have to feel brutal.