Today, I’m joining 6CVentures, a new early stage venture capital firm, as Partner and Head of Research. Long story short, we’re a sector-agnostic fund investing at the Pre-Seed and Seed stage (so if you’re an entrepreneur at this stage, reach out). I will be spending a lot of time in the coming months talking about our investment thesis on 6CV Perspective, but I wanted to start on a personal note.
About 18 months ago, I began thinking of moving back to venture capital. I have been a visible technology commentator in the past and was a seed-stage investor in India before moving to the UK. At least to me, venture capital seemed like a natural fit. But reaching out to VC firms was more challenging than I expected. I quickly learnt that personal introductions/references were the most effective way to reach a VC. I had only been in the country for a few years, so that was clearly a problem for me. It took me the better part of 18 months to build some semblance of a network in the space, through angel investing and working through the contacts I did have.
This experience was eye-opening for me, because I clearly come from a privileged background. If it was this hard for me to get introductions, how much harder would it be for founders who don’t have the advantages I have? This is one reason I deeply respect the team at Ada Ventures and their mission to invest in overlooked founders. Their approach of specifically targeting minority groups and overlooked industries is critical to solving this diversity crisis.
I also want to make it clear that this is not my way of taking a shot at other venture capital firms. Today, venture is a people-driven industry and introductions are a way to filter and manage inbound volume (from both founders and prospective VCs). However, this introduces structural bias into the system, as people tend to know others who have similar backgrounds.
There is one example of a firm that managed to mitigate this structural bias at the sourcing stage. By using online applications instead of references, Social Capital managed to completely change the diversity profile of their portfolio, i.e. 40% of their portfolio CEOs were women and half were non-white. The fact that Social Capital was one of the top performing venture firms in the valley was no coincidence.
This brings me to 6CVentures. Solving this structural bias at the sourcing stage is a critical problem that we see worth solving. We are developing an “active intake” model to eliminate structural bias at the sourcing stage. This is just one (key) element to our approach and we are committed to doing things differently. Stay tuned for more…