Friday Letter: Why doesn’t VC adopt a Rooney Rule?

More firms are talking about diversity in venture, whether it's hiring diverse talent or investing in diverse companies. Should the venture community adopt more initiatives to address the inequities?

I was on a Zoom call this week with a GP outside of the US. He asked me what sort of developments I was seeing from my perch.

Gosh, where to begin?

I could talk SPACs, the flight of firms and tech talent to Miami and Austin, the post-pandemic outlook, the overall robust amount of venture activity. The list could go on.

But I’d be remiss if I didn’t mention diversity in VC, especially considering this is Black History Month. “Diversity in VC” is a ubiquitous phrase meant to refer to not only women and people of color rising up in the ranks as fund managers and founders of newly launched firms, but also of venture firms themselves investing in start-ups led by diverse entrepreneurs.

Prior to the Zoom call with this GP, as it just so happens, I spoke with an LP who mentioned the Rooney Rule, the NFL affirmative action policy that requires teams to interview ethnic-minority candidates for head-coaching positions and other senior football management roles. This LP said his firm makes direct investments in companies and backs funds led by diverse managers.

“We’ve backed minorities and women. I didn’t realize it was a thing until it was a thing.”

Yes, the push for diversity in venture is very much a thing now. And the key, this LP says, is to introduce more diverse groups of people to venture capital early on in their careers so he and other investors will have a diverse talent pool to choose from when hiring and deploying capital.

I hear similar things from other firms in the venture community. And it begs the question: should venture capital adopt something akin to the Rooney Rule? Apart from the fact that most in VC loathe a regulatory framework in doing business, there are some initiatives in place in venture already.

The National Venture Capital Association launched its Diversity Task Force in 2014, with 45 firms pledging to it, to help advance a more inclusive entrepreneurial environment. Firms in Austin started the Diversity Pledge two years ago. There are more examples, I know, and many firms have advanced diversity in their partnerships and within their portfolio.

So maybe a Rooney Rule in VC is unwarranted. But it could give firms the push to look for more diversity in their hiring and when investing.

And I’d like to point out if you haven’t already read it: please check out Renata George’s story we posted this week about Beta Boom, a Utah-based early-stage fund founded by a husband-and-wife team who are targeting what they call a $4.4 trillion opportunity of investing in overlooked diverse and female founders left behind in tech when it comes to raising funding.

Kimmy Paluch of Beta Boom describes how in her tech background, she was the only Black woman in the company, and she went on to found an advisory service to help diverse founders access capital. She felt the old model of VC wasn’t meeting a wide enough group of founders.

The fund she launched is currently fundraising. She doesn’t need a Rooney Rule, but other might.

Let me know what you think of diversity initiatives in the venture community. You can drop me a line at, and I’m happy to chat.