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The Los Angeles tech industry and investment community are run by white men. Eighty-eight tech investors and the city’s Mayor Eric Garcetti want to change that.
In October, more than 80 venture capitalists and entrepreneurs met to kick off PledgeLA, an initiative by City Hall and the Annenberg Foundation — a family foundation that provides funding and support to non-profits around the world.
PledgeLA is asking venture capitalists and the companies that they fund to do the following:
“Tech cannot keep growing at this explosive rate without engaging with the community,” said Wallis Annenberg, CEO of the Annenberg Foundation. “What I want with this partnership is to say, ‘Let’s all grow together, so everybody benefits.’”
The population of the larger Los Angeles was estimated in 2015 at 18.7 million, making it the second largest metropolitan region in the country behind New York, according to the U.S. Census Bureau.
Almost three-quarters of the people living in L.A. identify as people of color, but it’s one of the most economically unequal regions in the U.S., according to PledgeLA. Just 2 percent of venture capital investment partners in L.A. identify as African American or Latino, and 11 percent are women, according to Annenberg data. More than 90 percent of local venture-backed companies are led by white men.
The tech industry may look different “because people are wearing T-shirts and flip-flops,” Mayor Garcetti said at the event, “But the boardrooms and C-suites look like something out of ‘Mad Men,’” L.A. Times reported.
“Mad Men” is an AMC cable TV series about the overwhelmingly white-male-dominated advertising industry of New York’s Madison Avenue in the 1950s and 60s.
The PledgeLA initiative grew out of Annenberg Tech, a project focused on spreading the benefits of the growing local tech sector by encouraging social-impact investing and workforce development.
At least 48 venture capital firms have signed on and they represent the bulk of L.A.’s tech investor class, according to the L.A. Times. Another 39 tech companies in the city are in, including Dollar Shave Club and Tradesy, an online resale marketplace for women’s fashion.
Here’s a list of PledegeLA signatories:
Venture capitalists in the L.A. region raised $5 billion in 2017 in an area ranked the No. 1 metro areas for the number of engineers trained. L.A. rank No. 3 for new business launches.
The companies that signed on to PledgeLA have agreed to track diversity data each year and make that data available to the public.
They also agreed to track community engagement statistics such as investing in local Los Angeles startups, participation in mentorship programs, volunteering, board service, offering internships, using local banks, giving preference to vendors owned by women or minorities, and dedicating a portion of annual spending to local impact initiatives, Tech Crunch reported:
Demographics at funds and startups will also be under the microscope, since signatories have agreed to report on their composition by race, gender, age, sexual orientation, disability status, immigration status, veteran status, educational attainment, socioeconomic origin, tenure at a firm. PledgeLA participants will also need a code of conduct around diversity and inclusion and are required to privilege diversity in corporate hiring practices.
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