{"id":58635,"date":"2017-07-13T08:00:05","date_gmt":"2017-07-13T15:00:05","guid":{"rendered":"https:\/\/redfindevelop.wpengine.com\/blog\/?p=58635"},"modified":"2025-07-01T05:52:19","modified_gmt":"2025-07-01T12:52:19","slug":"redfin-industry-leading-venture-firms-pledge-to-diversify-startup-boards","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/news\/redfin-industry-leading-venture-firms-pledge-to-diversify-startup-boards\/","title":{"rendered":"Redfin, Industry-Leading Venture Firms Pledge to Diversify Startup Boards"},"content":{"rendered":"
Image via Fairfax County Chamber of Commerce\/Flickr
Image via Fairfax County Chamber of Commerce\/Flickr<\/figcaption><\/figure>\n

Redfin is joining forces with venture capital firms in Seattle and Silicon Valley that are committing to diversify high-technology company boards. The venture firms will encourage new portfolio companies to recruit an independent, diverse board member within two years of institutional funding.
\nWe\u2019ve already reported on a tripling in the rate of female board appointments to companies that have recently gone public<\/a>, and new research we\u2019re publishing today shows that the ratio of new venture capital partners who are women has increased from less than one in three in 2013 to nearly one in two in the last year.
\nBut there has been absolutely no change in the diversity of startup boards<\/a> over the last year. And the problem, as we now see with large-scale companies attempting to become more inclusive toward women and people of color, is that a company\u2019s culture is often formed by its first 30 people.
\nRecruiting a more diverse board at an early stage may be the last item on an entrepreneur\u2019s list of priorities, but our experience building Redfin\u2019s board, first with Emily Melton<\/a> and later with Selina Tobaccowala<\/a> and Julie Bornstein<\/a>, is that it puts the company on a different course, able to compete for a much broader range of talent over years and even decades. As Redfin\u2019s CEO, Glenn wishes we had recruited more women to our board sooner and, as we add board members, he is committed to bringing on more people of color; working with some of our investors, Bridget has developed a framework to encourage other startups to do just that.
\nThe problem is that startup boards consist almost entirely of the investors who are backing the company. And these investors are almost entirely male. According to Fortune<\/i>, 94% of decision-makers at U.S. venture capital firms are men<\/a>. We don\u2019t have statistics on the racial composition of these decision-makers, but in our personal experience most are white.
\nThe good news is that the top-25 VC firms (based on number of deals) are getting more diverse as they bring on new partners, at least in terms of gender diversity, which is straightforward to track. In a comprehensive survey of 255 venture-capital appointments at these firms over the past four years, Redfin found that the female-to-male ratio of newly appointed partners (or directors, at firms without partners) has risen from 0.31 in 2013 to 0.47 last year.
\n[redfin_table file=”https:\/\/redfin.com\/blog\/wp-content\/uploads\/2017\/07\/Book1.csv” footnote= “”][\/redfin_table]
\nThat would be a shame, because the easiest time to change diversity numbers is early on, when the team is small. But the startup stage is also perhaps the least-appealing stage for diverse employees, especially when a startup embraces a raw, Wild-West culture that isn\u2019t far removed from a founder\u2019s apartment. It is exactly these companies, and their founders, who most need other perspectives on their board, as a sounding board on what customers want, and on how to develop the management team as leaders and managers.It\u2019s encouraging to see the numbers moving in this direction, but gender parity still seems a long way off. With these ratios, a venture firm with 12 male partners that recruits a new partner every four years would only recruit a new female partner every eight years; if it never had anyone retire or quit, it wouldn\u2019t be more than one quarter female until the year 2057. Without a change to the traditions of how startup boards are formed, we would expect VC-only boards to remain predominantly male for the foreseeable future. Racial diversity may be even slower in coming.
\nBut diverse board candidates have to meet early-stage companies halfway. In talking to venture investors who have tried to recruit diverse leaders to a startup\u2019s board, we\u2019ve had to account for the fact that joining the board of an early-stage company is plenty of work, and may not be that appealing when the startup\u2019s success is far from assured. In many cases, both the startup and the would-be board members want the other to be “the big name,\u201d but in fact both startups and diverse board candidates need to take a risk on one another.<\/span><\/p>\n

A Call for Commitment to Open Independent Board Seats<\/b><\/h3>\n

So today, in partnership with DFJ, Greylock Partners, Madrona Venture Group, Pioneer Square Labs and Boardspan, we\u2019re suggesting a new approach: starting with series-A or institutional investments made in September, the startups funded by these firms will be encouraged to make at least one independent board seat available to diverse candidates within two years of that funding. Other venture firms who wish to join our campaign can sign on via Twitter using the hashtag #DiverseFromTheStart.<\/span>
\nNow of course, any competitive process for hiring a board member may end with a male or a white board member, but we think the #DiverseFromTheStart effort will still make startup cultures significantly more diverse:<\/span><\/p>\n