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Illustration: Lazaro Gamio / Axios

Venture capital is well-known to be dominated by white men, causing many of the industry's few people of color to raise their own funds.

  • Only 2% of senior venture investors are black or Latino, per a 2015 analysis by Social Capital.

Why it matters: Like the broader tech industry, venture capital has been reckoning in recent years with its lack of racial diversity. But the pace of change has been glacial, mirroring its better-documented issues with gender diversity.

Investors of color going independent:

  • "I just wanted to be able to bring every single piece of me into the office every day," Cross Culture Ventures co-founder Marlon Nichols, who was previously at Intel Capital, explains. This has meant both the ability to focus on sectors and startups he and his partner see as promising, plus establishing their own culture and policies.
  • "It was a means to an end to get capital to certain people," says Arlan Hamilton of her decision to form Backstage Capital.
  • "The cost to start a fund has come way down," Precursor Ventures founder Charles Hudson says. "Now if you can raise $10 million, you could be a full-time VC – you won't make a ton of money but you can do it."
A tweet previously embedded here has been deleted or was tweeted from an account that has been suspended or deleted.

Conventional wisdom: Most still agree that venture capital remains an apprenticeship business, so learning the ropes – and building out personal networks – by working at an established firm is still valuable (and, to some, even necessary).

  • But: Getting into and moving up the ladder at existing funds remains particularly challenging for women and people of color. Firms still use signals like alma maters and experience at particular organizations when making hiring decisions, as former Venrock vice president Richard Kerby has written. It becomes circular, and exclusionary.
  • The gap between underrepresented minorities at the junior and senior levels also exposes the venture industry's lack of true commitment to diversity. "From what I hear from a lot of my friends, they're constantly being passed over," says Unshackled Ventures associate Maria Salamanca.

Missing conversation: As is the case in the broader tech industry, there's a lack of focus on how various underrepresented demographics overlap, multiple women of color in VC tell Axios. "Even within the underrepresented set, women have it more difficult than men in general," says Arlan Hamilton, adding that she's focusing more and more of her investment into companies led by women of color.

  • Women only make up on 7% of decision makers at VC firms, according to data Axios recently compiled. One caveat is that this data only included funds that had raised at least $100 million, while the recent boom in small, seed-stage funds has created more opportunities for venture's underrepresented demographics. For example, 21% of all micro-VC funds raised in the past three years were founded by women, according to Crunchbase.

Follow the money: Michael Kim is the founder of Cendana Capital, which invests in other venture capital funds. He says that the racial and gender demographics of startups are changing, and that it's imperative for VC firms to keep up. "VC firms have to be able to work with [minority and women-led startups] and have them part of their networks," he explains. "So if traditional funds aren't attracting the best startups, then LPs have to ask what are the funds not doing."

Go deeper:

Go deeper

2 hours ago - Health

CDC says some immunocompromised people can get fourth COVID shot

Photo: Noriko Hayashi/Bloomberg via Getty Images

The Centers for Disease Control and Prevention said in updated guidelines Tuesday that some immunocompromised people who have received either Pfizer or Moderna's COVID-19 vaccines will be able to get a fourth shot.

Details: People over 18 who are "moderately to severely immunocompromised" and have received three doses of an mRNA vaccine may get a fourth shot (of either the Pfizer, Moderna, or Johnson & Johnson vaccines) at least six months after getting their third Pfizer or Moderna dose, per the CDC.

3 hours ago - Politics & Policy

Scoop: Biden plan expected to include at least $500B for climate

Photo: Stephanie Keith/Bloomberg via Getty Images

The White House is privately telling lawmakers the climate portion of President Biden's roughly $2 trillion social spending plan is "mostly settled" and will likely cost more than $500 billion, two sources familiar with the talks tell Axios.

Why it matters: A price tag of $500 billion to $555 billion is a huge number and, if it holds, would likely be the single biggest component of the sweeping package. It also isn't far off from the roughly $600 billion proposed when the bill was expected to cost $3.5 trillion.

3 hours ago - World

U.S. presses Gulf countries to help resolve Sudan coup crisis

Jake Sullivan briefs the press. Photo: Chip Somodevilla/Getty

The Biden administration has asked its partners in the Gulf and elsewhere to press the Sudanese generals who carried out a coup on Monday to release captives including Prime Minister Abdallah Hamdok and to reinstate the civilian government, White House National Security Adviser Jake Sullivan said in a press briefing on Tuesday.

Why it matters: The U.S. has limited influence over coup leader Gen. Abdul Fattah al-Burhan and other military leaders, many of whom have close ties to Saudi Arabia and the United Arab Emirates.

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