Amidst all of the Paul Graham fun from the last few days (Graham says he was misquoted and lied to about the purpose of the interview. Reading the full transcript, I don't think the substance of his comments changes) an interesting question has gone out:
Do incubators have an obligation to actively seek out female hackers? http://snipe.ly/... - what do you think?It is really odd to me that the question has to be asked, because the answer is very clearly "yes". Doing otherwise is simple mal-practice. If you find that you are investing only in companies that are founded by the same kind of people, especially if those are the same kinds of people who either resemble you or have been traditionally been at the top of the power structure, you are most likely missing something.
You should be reaching out to minority founders to ensure that you are finding the best people to invest your money in. What are the odds that only white or asian males have good ideas that can be turned into a good company? If you answered anything other than "zero", then the odds are strongly that you are thinking with your gut rather than your head. And that means that you are certainly not doing as well as you could for yourself or for your investors.
You should be reaching out to minority founders because you owe it to society. There is a long history of discrimination in this country whose effectsare still being felt. Venture capitalists make most of their money when companies go public; which is to say, venture capitalists make most of their money because society has decided to give certain kinds of business organizations extra protections and tax breaks. Society has also decided to tax capital gains at a lower rate than others forms of income. These are artificial benefit created by society with the understanding that society will benefit from the people to whom it provides these extra perks. Venture capitalists should do their best, then, to earn those perks by ensuring that the benefits of capital are extended as widely as possible. Any venture capital firm that does not have some sort ofRooney Rule is reneging on the deal society has provided them.
At this point, someone will inevitably claim that the market will solve this problem. If some venture capitalists are ignoring minority founders, then others will exploit that market inefficiencies. This is obviously wrong. The inefficiency is caused by prejudices that are almost certainly unconscious, a function of class and social constructs. As the history of Jim Crow shows us, the market is perfectly capable of ignoring inefficiencies based on prejudices. And while th blindness of Silicon valley venture capital to people who don't fit their narrow preconceptions is significantly different from Jim Crow, the mechanism that can lead to gross market failures is similar. Prejudice, conscious or not, among the people who control access to capital ensures that such capital is almost always kept from those deemed unworthy due to aforementioned prejudices. The lack of funding for minorities in Silicon Valley certainly suggests that the market isn't correcting this particular problem.