back to article How can we make the VC world less pale and male, Congress wonders

A US congressional hearing on "combating tech bro culture" in the venture capital world is will take place this week, with some of the biggest names in startup funding under the spotlight. The House Financial Services Committee's Task Force on Financial Technology is scheduled to meet on Thursday. FSC majority staff said in a …

  1. Yet Another Anonymous coward Silver badge

    How can we make the government

    less white and male asks the VC industry

  2. cornetman Silver badge

    > Asian founders received 17.7 percent. That doesn't quite match up with the US adult population.

    It is interesting that although Asian founders were mentioned here, what wasn't specifically mentioned was that this is well over the proportion of Asians in the US.

    Just picking one of a number of references online, we see that Asians account for only 5.6% of the population (in 2019 according to this reference). Asians are not "white".

    https://www.visualcapitalist.com/visualizing-u-s-population-by-race/

    I am definitely for dealing with the alleged predatory sexual behaviour experienced by people. It's not acceptable.

    However, let's not ignore the obvious anti-white bias of the report. According to that same report, white people in the US account for 60.1% as of 2019 so 3/4 is not a million miles away from equal representation. If it was 90+% then I think it would have a fair point. At least some of that low accounting for black people is taken up by the high (x3) representation of Asians.

    1. diodesign (Written by Reg staff) Silver badge

      'what wasn't specifically mentioned'

      Yeah, that's what we meant by: "That doesn't quite match up with the US adult population."

      The amount of funding given to non-White people is out of proportion – whether it's too much or too little.

      C.

      1. Yet Another Anonymous coward Silver badge

        Re: 'what wasn't specifically mentioned'

        Similar story saying no Wall St firms employed minorities.

        Just good WASP names like Goldman, Sachs,Lehman etc.

        If Asian-Americans re over represented then they obviously don't count as a minority. So minorities are still underrepresented

        1. cornetman Silver badge

          Re: 'what wasn't specifically mentioned'

          > If Asian-Americans re over represented then they obviously don't count as a minority. So minorities are still underrepresented

          Any race that accounts for just 5.6% of the population is, by definition, a minority.

          The fact that whites are the majority is just a function if their proportionate population in the country. What is significant if we want to examine what we might call "bias" (although that term is rather begging the question) is the difference as a proportion of their base population. For whites, this would be about 25% higher representation, whereas for Asians this is about 300%. That difference is enormous, which is why I question the leading point about whiteness and maleness.

          The real story here is why Asians are massively over-represented compared to all other racial segments. It is probably due to their cultural obsessions with education and preference for family business.

          1. Yet Another Anonymous coward Silver badge

            Re: 'what wasn't specifically mentioned'

            Yes, that was my attitude when my university concluded that our physics dept lacked diversity. What, we're like 50% first generation Asian immigrants - but they don't count according to admin

        2. Michael Habel Silver badge

          Re: 'what wasn't specifically mentioned'

          WASP?! HAHAHAHA Oh... Wait your serious, let me laugh even harder! cause if you think those are Protestant / Cathlic names you are demented Sir.

      2. LDS Silver badge

        "That doesn't quite match up with the US adult population."

        But what about the "startup population"? Something tells me that there are more companies founded by Asians than Africans or other ethnic groups.

        If that the case then the problem happens well before VCs look for where to put their money into. Any policy that would favour disproportionately a small minority may mean VCs may be forced to ignore companies that have better chances to success, just because a given sector doesn't not reflect the distribution of the overall population.

        But wake me when, for example, Hollywood and most of the entertainment/fashion/advertisement sectors start to really reflect the overall population distribution - and doesn't select just a minority of "beautiful" and "young" people... and stop the huge women exploitation.

        1. cornetman Silver badge

          Re: "That doesn't quite match up with the US adult population."

          > ...and doesn't select just a minority of "beautiful" and "young" people... and stop the huge women exploitation.

          Never going to happen. If you are advertising clothes, you put them on attractive people because that's what sells. People like to see beautiful people: it is human behaviour. It's not just in adverts, it is in real life.

          Dove did a series of ads a while ago featuring "real" people. I had a lot of respect for what they were trying to do and it may have worked for them as a novelty but I doubt that it would work generally.

          TBH I'm not sure why we would think differently with respect to attractiveness as we do to other attributes that we are born with. The best intellectual jobs are given to the most intelligent people by and large. Would we be that naive to think that the most attractive people wouldn't be doing jobs that benefit from being the most attractive?

      3. cornetman Silver badge

        Re: 'what wasn't specifically mentioned'

        > Yeah, that's what we meant by: "That doesn't quite match up with the US adult population."

        Gotcha, and perhaps I should have been more clear that I wasn't criticizing the article, but the committees' comments.

        > ...whether it's too much or too little.

        I guess it is subjective as to whether or not it is too much or too little. If a particular ethnic culture has a propensity for producing a larger or fewer number of entrepreneurs then we should expect more or less representation in the figures.

        I suspect that the truth is complex and involves a number of factors in varying magnitudes including racial bias on the part of the investors and the cultural underpinnings of the racial groups. As I indicated below, that Asians are punching well above their population weight in terms of successful funding scorns the simplistic idea that this is all about pro-white bias.

        I still find it bizarre that some people believe that domination by white people in these areas in a country that is majority white is somehow strange or unexpected. ¯\_(ツ)_/¯

        1. diodesign (Written by Reg staff) Silver badge

          "a larger or fewer number of entrepreneurs"

          Yeah, that did cross my mind. How many people in each bracket want to start their own business, and how many would consider taking VC money?

          But then how many don't even consider it because of other effects... it feels like a complicated puzzle of many moving parts.

          C.

          1. cornetman Silver badge

            Re: "a larger or fewer number of entrepreneurs"

            > But then how many don't even consider it because of other effects..

            Well I'm white and starting a business was the furthest thing from my mind when I graduated. It just never occurred to me. It's just not in our family's DNA.

            I know others (my white boss for example) that wouldn't consider anything else, but then he comes from a family where starting your own business is pretty much the default position.

            I think the culture that you come from plays an enormous part in your expectations as you grow up. It also helps if your family has a lot of experience and knowledge. If you are surrounded by people that know about accounting, familiarity with business banking, knowing about wholesalers and the like, that would be a huge leg up. I would have to figure all that out from scratch and that's no small thing.

          2. Cederic Silver badge

            Re: "a larger or fewer number of entrepreneurs"

            I think there's also the nature of the businesses being started.

            I'll use a historical example: VCs wouldn't have invested in Capone, even though he's one of history's most famous entrepreneurs.

            Take Fintech: People with exposure to tech, and that are at schools/universities where they can meet people with resources, and that get the education/jobs needed to understand Finance at a level they can identify and work out how to fill a market gap will then be able to access VC funding.

            Equally intelligent entrepreneurs born in a crime ridden neighbourhood where their community peers have few prospects and the only people they know that are wealthy acquired it through providing local services, will be more likely to set up a business at a local level. They're just not likely to start a Fintech.

    2. Charlie Clark Silver badge

      There are now numerous cases in US courts from asian Americans who are being unfairly hit by positive discrimination measures in education.

      There is no doubt that african Americans as a group suffer from historical and systemic discrimination and that this does reduce their opportunities. However, positive discrimination is a cheap and ineffective solution, as are so many tokenist attempts (from both sides of the debate) in the US.

  3. msobkow Silver badge

    In other words, they're wondering how they can "force" failures to be successes just because they aren't white males. Unfortunately, customers rarely even know what CEOs and management look like, and really don't care.

    1. Yet Another Anonymous coward Silver badge

      Failures like Facebook, ibm Netflix are run by white guys. Successes like Microsoft, amd, nvidia are run by Asians.

      Never bet on the white guy in tech (except tim)

      1. GrahamRJ

        I'd love to run a failure like Facebook (net income $39.3billion) or Netflix (net income $5.1billion)! And whilst IBM may no longer be the world-dominating colossus it was in the 70s, it's still doing pretty well (net income $5.7billion). As for the others, Microsoft was run by white guys until 2014, and AMD was run by its white founder continuously from its foundation until 2002.

        The skin colour or gender (Carly Fiorina, anyone?) of a CEO is not a good indicator of a positive, innovative attitude in the rest of the company, nor indeed (Clarence Thomas) on their moral values.

  4. Teejay

    Less male, wow

    Why does no one ever wonder how we can make the exploited class of slave labour less male, less female, whatever?

    Instead, I should care if the richest, most priviledged, most exploiting people on this planet should be more women?

    Neoliberal, woke, globalist banter.

    1. Anonymous Coward
      Anonymous Coward

      Re: Less male, wow

      Totally agree with you. It's a distraction exercise to make the plebs scrutinise each other but not the super rich supposedly being the 1%. Not such accountability for them!

  5. Anonymous Coward
    Anonymous Coward

    Bullshit Pedlars

    The world of startups and VC funding seems largely driven by selling exciting ideas, not selling realistic ideas. A glitzy powerpoint promising a startling, exciting future could be worth a $billion! Whereas something carefully worked out, less prosaic, less exciting is not going to get the same attention.

    So I think it comes down to the fact that there's some parts of society who are well used to getting away with bullshit proposals, whereas there's others who are obliged to prove credibility by actually being credible. The problem is that ideas that work are often less impressive the ideas whose real world functionality is largely illusory. Plus I think that some people are simply (and to their credit) less willing to indulge in selling bullshit nonesense.

    Look at the self driving car fiasco. Literally everyone now can see that self driving cars are beyond us. To the really good engineers, that has been obvious from the start.

  6. codejunky Silver badge

    Eh

    Congress wonders how to be more racist and sexist towards VC's? Also it seems congress thinks diversity is sexism and racism instead of diversity of ideas.

  7. Sub 20 Pilot

    This pointless shite is endemic in the UK. My stock question to anyone promoting this crap is : If you or your child need life saving cancer surgery do you want to be treated by the best in their field or by someone who ticks a fucking box because of their gender / colour / sexual preference. I have never been given an answer..

  8. Tron

    Percentages.

    I wonder how, in ethnic terms, the VC stats match up against US tech uni students. You would get a high figure for Asians there too. That would be the sort of parity I would expect. We are talking about VC here after all. It would be interesting to see rejection stats too.

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