The VC Inclusion Clause #MovingForward

创业投资 2018-03-09

Upfront Ventures has a deep-seated commitment to equality in funding & building diverse teams across all ethnicities, nationalities and genders. We do this not just because it’s the right thing to do but also we believe it will help drive large and differentiated returns.

In 2017 we began inserting an “Inclusion Clause” into our term sheets because we believe that the culture one establishes at the earliest stages of one’s business will set out the course of how it will grow and develop. We believe that diverse teams produce diversity of thought and that this leads to better decisions and outcomes.

We have decided to “open source” our language in the hopes that other VCs will use this clause and/or improve upon it so that as an industry we can proactively drive the change we want to see rather than just hoping it will happen.

If your firm is willing to commit to this or any similar “inclusion rule” we hope that you will consider linking to it from your firm’s home URL as a sign of industry solidarity in the hope that others will follow suit. Ours is: . If you’re an entrepreneur who would like to see this clause in more startups please ask your VC to include it in future term sheets and link to it from their home page.

“We strive to invest in companies that are consciously working to create a diverse leadership team — one that’s inclusive across gender, ethnicity, age and national origins. While we would never impose hiring decisions, we aim to reduce the potential impact of unconscious bias for key C-Level and senior roles within a Company. We therefore ask that each portfolio company include an “inclusion rule” in its HR policies so that at least one woman and/or member of a population currently underrepresented within the company shall be formally interviewed for any open executive position.”

For what it’s worth we also have our “Zero Tolerance” sexual misconduct policy, which you can read here: . Feel free to copy or edit this, too.

Why did Upfront decide to create an inclusion clause?

We inserted the Inclusion Clause because in the midst of the #MeToo and #TimesUp movements we wanted to take some action. We thought making our values and expectations clear could have a positive impact on driving the conversation and actions inside portfolio companies. We can unequivocally say this has started to work in the companies that we have funded since this clause was inserted.

The idea came from a full-day session we held last year at Upfront. The first session we had was a company training session in sexual harassment and misconduct in which we had an outside speaker talk about what is appropriate and what is not. It’s easy to assume in a small organization that everybody read our employee handbook and generally knows right from wrong but of course companies big and small should never take this for granted. In the afternoon we had a partner session with a separate facilitator in which we talked more broadly about bias, diversity & inclusion.

Towards the end of the day my partner Greg Bettinelli said, in effect, “If we leave here today having just talked and not changed anything then shame on us.” He suggested an idea that comes from the NFL called “ The Rooney Rule ” enacted in 2003 in an effort to end the era of all-white football coaches in a league with > 75% African American players. The idea was that if any head coaching position was open the owner had to commit to interviewing at least one person from an underrepresented background. The idea was that if you ask owners to commit to the “top end of the funnel” in recruiting it would start to have an impact on hiring non-white coaches.

We immediately realized this was a great idea. We thought that entrepreneurs would rightly push back against an investor or board member specifying that the company must hire a woman or a Latino or any other underrepresented group for an exact role but that any team that didn’t feel comfortable at least committing to interviewing more diverse candidates wasn’t likely to align with our value system of how great teams and companies are built.

Many of us had experiences of asking entrepreneurs, “Why are none of our candidates women?” only to be told that “The recruiters didn’t send us any female resumes.” “Well, did you ask them to???” Duh. If you make it a criterion that they must include some woman and candidates from a background or ethnicity that is not well-represented in your current company then you will have a broader pool from which to select employees!

I saw this on Twitter this morning, which is a telling graphic of how big the change that must come really is.

So if we inserted this language last year why publish it now?

We were approached by Andy Coravos and Cheryl (Yeoh) Sew Hoy who are today announcing the important initiative called #MovingForward . It is being launched today — International Women’s Day — which is fitting.

#MovingForward is an open-source directory that pools diversity, inclusion, and anti-harassment commitments from VCs. Supporting VCs have established their commitment to move forward by sharing their current progress in the wake of the discrimination and harassment experiences bravely shared in the past year.

I admire anybody who sees a problem and steps up to try and make a difference and take action. Kerry Bennett from Upfront and I spoke to them on the phone about their goals and how we could be helpful. In doing so I realized while we had published many public blog posts, we had screened films in Los Angeles on “gender bias,” we had brought speakers to the Upfront Summit every year to talk about ethnic diversity, gender equality and even physical disabilities that lead to bullying we didn’t have a central easy-to-find public position on our policies and views.

So in committing to support #MovingForward we decided it was also a reminder to take more action to, well, move forward!

So we:

  1. Published our “Inclusion Clause,” ( ) making our views known about racial, ethnic, age and gender diversity that had never before been publicly released in the hopes that others would also adopt it and that if anybody had suggestions on how to improve it they could and we would adapt. We see this as an open source inclusion clause.
  2. Published our point-of-view on “Zero Tolerance” ( ) in sexual harassment, misconduct and bias inside of our firm, our portfolio and any of the partners with whom we work.

Thank you Andy, Cheryl and everybody else behind #MovingForward.

Thank you to Kerry Bennett for always being such a strong advocate within our firm and our industry. Thank you to Kara Nortman for your leadership on the gender equality topic and your activism with your fellow VCs at Female Office Hours .

Thank you to Hamet Watt for being such a positive leader in the African American community — I have seen in your 5 years with us countless hours dedicated to mentorship and advice to younger founders of color and showing them a roadmap for success. I can’t wait to see the businesses you launch with your new foundry.

It takes a village. Every person must do their part. We have much work still to do but:

A few data points on Upfront Ventures

- 25% of our investment dollars in the past three funds have gone to founding teams with at least one female founder.

- We’ve seen that teams with at least one female founder receive disproportionately higher follow-on dollars, showing evidence that diversity can lead to better outcomes.

- Upfront has consistently ranked in the top decile of investments to female founders and the top 20% of investment team diversity.


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