Intel Takes its Diversity Push to the Venture World

JesseHowever white and male the tech industry is, the make-up of venture-backed companies ? the saplings who will become Silicon Valley?s future giants ? is even more so.

One figure jumps out: Fewer than 1 percent of founders of Silicon Valley firms are African-American or Latino.

And only 15 percent of venture capital-funded companies in the United States have a woman on the executive team.

But Intel hopes to change that.

The chipmaker announced Tuesday that it is launching a $125 million venture fund that will invest over five years in companies founded or run by women or underrepresented minorities.

The fund is believed to be the largest amount ever devoted to such an effort.

?Since our customers are diverse, we need to fund companies that look like the rest of the world,? said Lisa Lambert, vice president and managing director at Intel Capital, who is leading the Intel Capital Diversity Fund.

The venture fund is in addition to the chipmaker?s $300 million commitment to improve the educational and training pipeline and achieve its own diversity hiring goals.

With its investment arm, Intel Capital, the chip giant plans to reshape a startup landscape where female, African-American, Latino and Native American tech dreamers say they struggle to raise money.

On Tuesday, the company announced its first diversity fund investment with $16.7 million spread across four firms. To be considered for the fund, a firm?s founder, CEO or three of its executives have to be a woman or a minority, Lambert said. The company quickly had a list of 100 prospective firms, and those considered for investment went through Intel Capital?s standard vetting process.

One is Brit + Co, a San Francisco-based media and e-commerce platform, which has a female founder, female chief executive and an employee base that is 80 percent women and under-represented minorities.

Another is CareCloud, a Miami-based digital health firm, with a Latino founder and three other Latino male executives. Fifty-six percent of CareCloud?s workforce demographics is women and under-represented minorities.

Jeff Hudson, CEO of Venafi, which has development offices in Salt Lake City, Palo Alto, Calif., and the United Kingdom, said Intel?s investment in his cybersecurity firm validates his belief that a diverse leadership team is a company?s strength. Three of the eight executive positions at Venafi are held by women.

?I look at homogenous systems and see destruction,? he said. ?The world is about adaptation, and it?s changing fast. Survival comes with diversity.?

Slowly, the venture world has been waking up to that notion.

In January, the National Venture Capital Association launched the ?Inclusion and Diversity Task Force? headed by Kate Mitchell, a partner at Scale Venture Partners, to look at the gender and racial compositions at both VC firms and their portfolio companies.

?This has been boiling for some time,? Mitchell said. ?We are focused on coming up with solutions.?

AOL has its $10 million BBG Ventures (as in ?Built By Girls?) fund for women-backed firms. Comcast, through its venture arm Comcast Ventures, is trying to change the status quo with its $20 million Catalyst Fund, which makes seed stage investments in companies started by minority entrepreneurs.

Lambert, who has been at Intel for 18 years ? 15 at Intel Capital ? said she has often been the only woman and only African-American in meetings. ?You look at that day after day, month after month, and year and year, and you realize the disparity,? she said. ?There?s a perception issue, there?s a pattern recognition issue.?

The Silicon Valley script, the one that says white or Asian men helm successful startups, won?t change overnight.

But Intel?s commitment of $125 million will make a difference. The chip giant is challenging nothing less than the status quo of what tech success looks like.

(Source: TNS)