M25’s Commitment to Anti-racism, Diversity and Allyship
We’re good investors, but today we at M25 are proclaiming that in the same way “good people aren’t good enough,” good investors simply aren’t good enough in the context of anti-racism and equity.
Today, we’re announcing that M25 isn’t just a good firm, but an anti-racist firm, and one who’s committed to taking specific action in support of anti-racism here and now, for the long term.
Roughly two and a half years ago, M25’s partners Victor Gutwein and Mike Asem stood with other investors in our industry and took the “Stewardship Pledge for the Innovation Investor,” a pledge that was birthed by the leaders at Kauffman Fellows, of which Victor and Mike are both a part of. In the wake of more recent events and societal discourse around racism, injustice, and oppression of underrepresented minorities outside of and within our industry, our firm has spent the last several weeks in contemplation — looking inwardly at what we’ve done, and what is yet still ours to own. Today we move forward as a firm, announcing a few torches we’re committing to carry in an effort to stand as leaders in our industry as we partner with others to chart a course for a better future.
You can learn more about the Anti-Racism Ownership Framework and how M25 used it to arrive at these initiatives / commitments by checking out Mike Asem’s personal blog (RIRTs), where it he’s written and posted “The Diversity, Inclusion and Anti-Racism Framework for VC”.
Goals, Reporting and Accountability
Starting this year, we commit to transparent goals and annual results around our deal flow sourcing and portfolio construction. To this end, we’ll be partnering with organizations like BLCK VC to follow best practices in tracking our top of funnel deal flow (the makeup of the founders who even get a shot with us), setting targets that drive a fair and objective investment process, and the results — aka “who got money.” So far in our current fund we are happy to report that out of all investments so far (14 to date) 50% are founded by Black, LatinX, and/or female founders. While investing in diversity has never been a specific mandate of our firm, we’re honored by the diverse founders who have trusted us as partners, and encouraged by where we sit in this measure compared to our peers. Our first post outlining our goals there and how we’re tracking will follow this, sometime in Q3, 2020.
Conduit for Black VCs
While we’re a small firm now, and will likely be so for the next several years — we still see an opportunity to help more aspiring Black venture capitalists break into the industry. Today we’re proud to announce that we are working towards a partnership with the Black Venture Capital Consortium (BVCC). Through HBCU curriculum, summer internships, paid fellowships and pitch competitions, BVCC works to increase the number of Black investment professionals in the venture capital industry. Our goal is to finalize a commitment as a host firm for an annual paid fellow, through which one new Black individual annually will work full time with us, train with us, and hopefully through our work and that of BVCC — find a long-term role in a VC firm.
Subsidizing Diverse Hiring Incentives
As a partner to our companies, we feel compelled to help them tackle diversity within their own teams in the most impactful way we can. While learning from thought leaders in the space like Kapor Capital, it came to our attention that one of the best ways for companies to successfully create a more diverse culture is through employee referral bonuses. The data suggests that if companies add a referral bonus as a net increase to their existing employee referral bonus program for hires that are diverse to that organization… well, it works. We’re going to step out and experiment with this as a firm by financially contributing to bonuses like these that our portfolio companies want to opt in to, and our portfolio companies will be learning more about this over the coming weeks.
Creating a Platform for Black & LatinX Entrepreneurs
While the results within our portfolio suggest we might not have as much of a pipeline problem as our industry peers on average, we see an opportunity to push ourselves help the market more broadly get better here. Today we are happy to announce that we will be partnering with both BLCK VC and LatinX VC to leverage our existing M25 Summit in a way that showcases Black and LatinX entrepreneurs, within and outside of our portfolio. Our summit regularly attracts well over 100 VC firms from all over the country, and we’re hoping to seize this opportunity help direct some of our bi-annual attention towards diverse founders that may not already have the networks and access to get in front of VCs like these by creating an additional event connected to the summit.
Senior Investment Team Expectations
Finally, M25 is a firm run by individuals. Diversity and inclusion are values that are shared not just in our organizational brand and rhetoric, but by those individuals that are core to it. We’re saying here publicly that it is an expectation that all senior members of our investment team (present and future) not only hold these values, but support these initiatives with their own time, capital, resources, etc. Updates on this will be included in our annual reporting previously discussed, and below we’ve listed out just a couple ways in which each of our current senior investment team members already live this out.
It’s our hope that given the limited resources we have as a small firm in the broad venture capital landscape we’re able to outpunch our weight class and be leaders in driving the industry towards a better, more merit-based realization of this ecosystem — one that better reflects the society we all live in every day. We know that we can’t do it alone, and we know that we’ll surely fall short and make mistakes along the way. That said, we’re asking in advance for the support and grace from our community, and “in the words of Alexander Hamilton…”
“We’re not throwin’ away our shot.”