40 Percent Of Venture Capitalists Went To Harvard Or Stanford

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Written by Dana Sanchez

 

Richard Kerby, one of the few Black venture capitalists in Silicon Valley, analyzed the racial breakdown in VC and found that out of around 1,500 VCs polled, 40 percent had attended either Harvard or Stanford universities.

Everyone knows that venture capital is homogeneous when it comes to gender and race. The role educational background plays in the industry’s lack of diversity is “a previously-unstudied metric,” Axios reported.

Kerby, a partner at Equal Ventures in New York City, first analyzed venture’s racial breakdown in 2016. In 2018, he updated his findings, adding one more dataset to his collection: where each investor earned their undergraduate and graduate degrees.

“Although I suspected that there would be a high concentration among a select number of institutions, I was still shocked to see how insular the industry really is,” Kerby wrote in a Medium post. “After going through ~1,500 investors, I found that 40% of venture investors have attended Stanford or Harvard. Just TWO schools! Why is that? Everyone wants to work with those they are most similar to, and education, gender, and race are attributes that allow people to find similarities in others.

“With 82% of the industry being male, nearly 60% of the industry being white male, and 40% of the industry coming from just two academic institutions, it is no wonder that this industry feels so insular and less of meritocracy but more of a mirrortocracy. This is most clear when looking at the educational backgrounds of black investors. Over 50% of black investors in venture capital went to Harvard or Stanford. The bar to create a more diverse industry is difficult when one looks for folks that most resemble themselves; and while talent is evenly distributed, unfortunately, opportunity is not.

There has been an improvement in diversity in VC after 2 years, Kerby wrote, but there’s still a long way to go.

These are Kerby’s main findings for what changed in VC from 2016 to 2018:

  • Black representation climbed slightly from 2 percent to 3 percent (Black females made the difference — they were at 0 percent in 2016).
  • Women still only make up 18 percent of VC professionals, up from 11 percent.
  • The percentage of white VCs dropped from 74 percent to 70 percent.
  • Asian representation climbed from 23 percent to 26 percent.
  • Hispanics remained the same at 1 percent.

 

venture capitalists
Business school graduates cheer while waving dollar bills and flags during Harvard University’s 353rd commencement ceremonies, Thursday, June 10, 2004, in Cambridge, Mass. (AP Photo/Michael Dwyer)
Image: Anita Sanikop/Moguldom.com

 

Lack of cognitive diversity

“…When you couple the lack of gender and racial diversity with the lack of educational institution diversity, you not only end up with teams that look similar, but you also end up with teams that think in a similar fashion,” Kerby continued. “Not only is our industry lacking in gender and racial balance, but we also suffer from a lack of cognitive diversity.”

It’s no coincidence that the amount of capital raised by minorities and women closely resembles their representation among venture capitalists, Kerby wrote. And it’s no surprise why the demographics of most venture-backed startups also reflects the demographics of the venture capitalists that fund them.

“If we want to have more successes in the venture and broader tech ecosystems, diversity in all fashions (racial, gender, cognitive) needs to be a part of what drives us forward.”

Kerby shared the full data set on which he based his findings.