Embracing Transparency: Economic Inclusion in Venture Capital
The Slauson & Co. approach to venture capital has been based in transparency and inclusivity since our inception. Our foundational belief in these principles was born not just from a sense of compliance or social obligation, but from recognizing and harnessing the immense potential within communities that have been historically overlooked by venture capital.
As California takes a step towards greater transparency with the introduction of Senate Bill 54, we find ourselves reflecting on our own journey and the lessons we’ve amassed.
What is Senate Bill 54?
On Monday, October 9th, California Gov. Gavin Newsom signed a bill into law, which mandates that starting in 2025, venture capital firms report annually on the diversity of startup founders they invest in. This requirement extends to many venture firms across the U.S, encompassing not only those based in California but also those with portfolio companies based in or significantly operating within the state, as well as firms that receive funding commitments from California residents.
We’re proud that one of our portfolio founders, Derek Ali founder of EngineEars, provided testimony to the CA Banking and Finance Committee in favor of the bill.
Transparency: The Magnet for Talent
We understand the concerns from some investors that view this change as yet another task that they have to undertake to remain compliant and criticism from others who believe this type of disclosure is unlikely to push the industry in a new direction. But we at Slauson & Co. have always been vocal about the delusion around inclusion and how transparency around inclusivity is a competitive and thoughtful investment strategy, rather than a constraint in our business.
Our unwavering commitment to transparency from day one has yielded benefits beyond our expectations. Founders from an array of diverse backgrounds and identities have approached us, eager to share their innovative ideas and the companies they’re building. It’s evidence that when venture capital firms genuinely embrace inclusivity, they magnetize a breadth of talent that may otherwise be overlooked.
Senate Bill 54, in our view, isn’t merely a legislative requirement; it is a mirror reflecting the demographic and entrepreneurial evolution of our nation. When we speak of diverse founders offering groundbreaking solutions for multifaceted consumer bases, we recognize that inclusivity isn’t just ethical — it’s smart business.
Taking Action: Initiatives at Slauson & Co.
Beyond advocacy, we aim to move our industry forward. To support our investor colleagues, Slauson & Co. offers:
- Our Annual Inclusion Report: We have published an Inclusion Report every year since our inception in 2021. These reports are available on our website and provide a transparent view of the demographics of our portfolio, as well as our team, the vendors we engage, and a few other insights. Our hope is this report inspires a similar openness among our peers at other firms.
- Virtual Info Sessions: We have a lot of respect for the VC Platform Global Community. We’re hosting a session for VC Platform professionals in the coming weeks where we’ll walk through our processes for data collection, reporting, and learnings. Hopefully other firms can learn from our best practices.
- Introductions to Diverse Founders: Nearly all of the founding teams we’ve backed are led by a woman and/or a person of color. Beyond our own portfolio, we’ve seen thousands of companies founded by teams with similar demographics. If you’re an investor interested in meeting these founders, across nearly any industry, we can help with some suggestions.
A Unified Vision for Venture Capital
Senate Bill 54 is both a challenge and an opportunity. We invite our VC colleagues to view it as a catalyst for transformative change.
Slauson & Co. remains steadfast in our commitment to our vision of economic inclusion. Let’s bring it to fruition, together. If you’re a venture firm interested in learning more, please reach out to MeetUs @ Slauson.co
