Friday Letter: SEC launches initiative to understand diversity

The SEC held a virtual coffee break this week to discuss diversity. Three from the venture community participated in the discussion.

It’s hard not to take notice of all the diversity and inclusion momentum taking place in venture.

In recent days, we’ve seen the launch of Magarac Venture Partners in Pittsburgh, which plans to target one-third of its investments to underrepresented founders. Also, the majority black-owned venture firm MaC venture Capital raised $103 million for its inaugural seed-stage fund.

My inbox is full of related pitches about venture firms with a diversity angle, investors backing diverse entrepreneurs and people moves involving women and people of color.

Now the Securities and Exchange Commission is taking on the initiative, as it kicked off a discussion this week to better understand what’s going on with diversity in venture capital.

On March 31, the SEC held what it considers its first session in a series focused on discussing these topics around business and capital formation at the early stage.

As the SEC pointed out, women and minorities still represent only 12 percent and 23 percent, respectively, of VC decision-makers, and 12 percent and 20 percent, respectively, of VC-backed founders.

“While some modest gains have been made in the diversity of founders receiving venture capital in recent years, the implicit bias underpinning pattern matching is a powerful force,” said Martha Legg Miller in her opening remarks. Miller is the SEC’s first director of the Office of the Advocate for Small Business Capital Formation, a post she was named to in late 2018.

VC Frederik Groce, Storm Ventures
Frederik Groce, Storm Ventures

Among those participating in the SEC discussion were Frederik Groce, a recently promoted partner at Storm Ventures and founder of BLCK VC, a nonprofit devoted to boosting Black investor representation; Winter Mead, co-founder of Oper8r, which bills itself as a Y Combinator for emerging managing venture capitalists to raise institutional backing; and Jamie Rhode, vice-president of the family office Verdis Investment Management.

Mead wrote to me in an email: “Today’s session was the first session in a series focused on discussing these topics around business and capital formation to better understand the needs of entrepreneurs and investors across the US, especially those in underserved geographies and traditionally overlooked communities. I brought the LP perspective on how the micro-VC market is now and is evolving.”

I’m not certain what will develop from this SEC gathering, but it seems hopeful that as more firms are focusing on their diverse-led staffs and putting money into more diverse founders, the venture community will stand to benefit.

Tell me what you think. And if you have any questions or comments about D&I, let me know. You can drop me a note at