How to Build Diversity and Inclusion into Your Company’s DNA, According to a Diversity-Focused VC Firm
February 19, 2020
While the conversation around diversity and inclusion (D&I) has come a long way in recent years, the biggest challenge that chief diversity officers face is making the business case for D&I, with one in four (27%) reporting this is still an issue for them.
One company that doesn’t need convincing is Kapor Capital, an Oakland-based venture capital (VC) firm that invests in early-stage tech companies with a focus on social impact. The firm’s founders believe wholeheartedly that diverse and inclusive teams have a competitive advantage — so much so that they only invest in companies that make D&I a core part of their business.
“In 2016, we worked side by side with our founders to put together a set of principles,” says Ulili Onovakpuri, a partner at Kapor Capital. “At the heart of it is really a commitment to building businesses that reflect your customers.”
These principles formed the Founders’ Commitment, which companies must actively work toward in order to remain in Kapor Capital’s portfolio. To learn more about what this looks like in practice and what steps companies can take to live up to it, Brendan Browne, LinkedIn’s head of hiring, sat down with Ulili in the latest episode of Talent on Tap:
Here are four strategies Ulili recommends to help you walk the walk with diversity and inclusion — and reap the benefits.
1. Start thinking about diversity and inclusion as early as possible
It’s never too early to start thinking about D&I. As Kapor Capital explains on its website, “The earlier a company bakes in diversity and inclusion, the more likely it will become a part of its DNA and positively impact the company’s development and future success.”
Since Kapor Capital only works with startups that are still in their infancy, it has a unique opportunity to ensure D&I is built into the foundations of all its portfolio companies. But whether you’re a 10-person company or a 100-person one, the sooner you start crafting policies and processes with D&I in mind, the better — otherwise, you’ll find it harder to fix bad practices later.
It’s also important to set D&I goals for your company and hold yourself accountable to them. Kapor Capital helps its portfolio companies achieve its goals by hosting quarterly workshops and subsidizing tech tools that can help (more on that in a minute). And since the VC firm believes that diversity is a core component of a company’s future potential, it will stop investing if a company fails to demonstrate its commitment to D&I.
“We are not just people having people sign the contract and commit without resources,” Ulili explains. “But if you’re still failing after intervention, we won't invest. To us… failing at diversity is equally as important as if you were failing at the business itself.”
2. Invest in tech tools to reduce bias in the hiring process and support a diverse and inclusive workplace
As an investor in technology startups, Kapor Capital is well aware that the tech industry has room for improvement when it comes to D&I. But it also believes in the power of “using tech to fix tech,” as Ulili puts it. That’s why the VC firm also invests heavily in recruiting and HR technology that can help its portfolio companies mitigate bias in the hiring process and foster an inclusive workforce.
One tool that Kapor Capital has invested in is Wepow, a video interviewing platform that allows you to record questions for candidates to answer — ensuring every candidate is asked the same set. This eliminates the potential for an interviewer to experience affinity bias, where they discover a similarity with a candidate and go off on a tangent, which might cause them to view that candidate more favorably.
“I know for me, I’ve found if I have a rapport with someone, I'll just stay on the phone forever,” Ulili admits. “Like, ‘Oh, you went to Berkeley? I love Berkeley.’”
Kapor Capital has also invested in tEQuitable, a confidential, third-party platform designed to address bias, discrimination, and harassment in the workplace. If an employee was experiencing sexual harassment, for example, they could contact the platform to report the problem or get impartial advice, like how to escalate the issue.
Investing in tools like this doesn’t just help you build a more diverse and inclusive workforce. It also shows employees and investors alike that you truly believe in putting your money where your mouth is, which sends a powerful message.
“We believe you fund what matters,” Ulili says, “and you put money behind what matters.”
3. Don’t be afraid to pause, recalibrate, and try again if something isn’t working
While investing in the right tools and processes is a great place to start, D&I isn’t an exact science. Even the best-laid plans can fall short, so it’s important to continually monitor your efforts and reevaluate any that aren’t working.
Kapor Capital discovered this recently when it posted a job opening for a director of investments. Despite the firm’s expertise in the field of D&I, the job post wasn’t attracting a diverse slate of applicants.
“We noticed very early on we weren't getting women,” Ulili says. “We had 100 applicants and seven women.”
Kapor Capital realized it wasn’t posting the job ad in the right places to attract female candidates. To combat this, it immediately reached out to women-specific groups and asked them to share it with their networks.
“Within 24 hours, we saw the number of women just spike,” Ulili says.
4. Take risks on people — otherwise, your culture may become homogeneous
Sometimes it can be tempting to bring that seemingly “safe” candidate on board. In essence, this means hiring the low-risk option, even if they’re not the best person for the job because it’s easier than sticking your neck out for someone that might not slot as seamlessly into your culture.
Unfortunately, this can hold back your diversity efforts and result in homogenous cultures where everyone looks and thinks the same.
“No one ever gets fired for hiring an engineer who looks like the 20 other engineers,” Ulili says. “Sometimes it takes a risk to be able to say, ‘Hey you guys, I know this person isn't a [perfect] fit, but maybe we should give him or her a chance.’”
Kapor Capital encourages its portfolio companies — and all companies — to be willing to take those risks and give people a chance. If you don’t, you may miss out on some incredible talent, and it will only get harder to diversify your workforce the more homogenous it becomes.
Be intentional about diversity and inclusion and good things will happen
The journey to building a diverse and inclusive company can be a long and challenging one — but every step you take will pay off down the line. For Ulili, the most important thing any company can do is have a plan in place.
“Be intentional, because your biggest asset that you have is your people,” she says. “They create the vibe of the culture, they bring in the innovation, and you really want that if you're going to grow your company.”
Talent on Tap is a video series in which Brendan Browne breaks down the hottest topics, biggest challenges, and most enticing opportunities in the world of talent. Talent on Tap will also give you an opportunity to hear from other organizational leaders, subject matter experts, and thought leaders in the space. Stay tuned for the latest.
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