Monique Woodard has joined 500 Startups as its first African-American venture partner to increase the firm's investments in Black and Latino tech entrepreneurs, who have historically received a tiny fraction of U.S. venture funding.
The appointment of a Black investor at the start-up accelerator and venture firm "sends a huge signal that Black investors are needed and that we should have a seat at the table," Woodard stated. Woodard is executive director of Black Founders, a national network of African-American tech entrepreneurs that she co-founded.
"We have to diversify who's going out there and finding companies and who's writing the checks," she said. "That is incredibly important. It's hard to find Black and Latino founders if you don't have Black and Latino investors on your staff."
For decades Silicon Valley has wrestled with its stark lack of racial diversity. Nowhere is that more evident than in the venture capital industry, which is dominated by white men who, by and large, fund very few start-ups founded by underrepresented minorities and women. A report in 2010 by CB Insights found that fewer than 1% of venture capital-backed Internet companies were founded by African Americans.
500 Start-ups, co-founded by Dave McClure and Christine Tsai, wants to shake that up. 500 Startups has $200 million in assets under management. Its team of 100 people manage seed-stage investments in more than 1,500 companies in 20 countries including three unicorn start-ups: GrabTaxi, Twilio and Credit Karma.
Even before Woodard's appointment, the investing team at 500 Startups was more diverse than at most venture firms. Eleven of 33 partners on investment team are women. In the last four years, 500 Startups has backed more than 400 female-led companies. 500 Startups says it does not have figures on the racial composition of its team or on the number of Black or Latino-led start-ups it has invested in.
"Monique is super talented and the fact that she does have a strong passion for diversity and inclusion with respect to the entrepreneurial and venture capital community, that just aligns with what we do," Tsai said. Tsai says Silicon Valley is overlooking big ideas in untapped markets at its own peril.
"Unfortunately a lot of Silicon Valley venture capitalists are disconnected from African Americans, Latinos and other people of color. They don't understand these markets and, unfortunately, if they don't understand them they are inclined to say, 'I don't get it,' or 'I can't help you,' or 'I don't think that's a big market,'" she said.
500 Startups says it has made investments in a number of companies with minority founders including Walker & Co., Tristan Walker's company which makes the Bevel shaving system, and Mayvenn, which helps beauticians sell hair extensions and other products. Now, McClure says, 500 Startups is going after under-served but influential markets.
"Another win for the industry," Walker said of Woodard's appointment. "Diversity matters, and most noticeably, at its earliest stages and Dave knows it. It's just good business. 500 Startups has been ahead of the curve in that regard." Woodard is one of a small group of black investors in Silicon Valley that she says she can count on one hand.
Woodard has spent the past eight years steeped in the Silicon Valley start-up scene. Black Founders, which she will still run as executive director, hosts events and workshops in cities and at historically black universities and colleges around the country. Recently Black Founders launched a mentoring program to pair entrepreneurs with experienced founders. And it's focused on creating more funding resources for black entrepreneurs, especially at the early stage.
"I very specifically wanted to work at the early stage when founders need the most help and the most support. 500 Startups makes a lot of bets and I wanted to be able to make a lot of bets. That's where you can make the most impact for Black and Latino founders." - Jessica Guynn (Photo: Yiying Lu)