The technology industry tends to carry a reputation of an “old boys” club. Some would even say that the technology space is hostile to women who are interested in it.
In the summer of 2014, a host of major tech companies released their diversity statistics, which laid out the demographic makeup of their workforces. It highlighted the fact that most technology companies are predominantly male-led, with a majority of their employees being white.
This is especially true when it comes to startups. According to the Diana Report from Babson College, more than 97% of venture-backed startups have a male serving as CEO. A 2011 survey conducted by the National Venture Capital Association (NVCA) showed that investors were 89% male and 11% female. Additionally, it found that 87% were white, 9% were Asian, 2% were black or Hispanic, and 2% were “mixed-race.”
Some steps have been made to emphasize diversity in technology. At the end of 2014, the NVCA formed a Diversity Task Force focused on inclusion in the industry. Also, more programs are being launched to get girls interested in computing, and more firms are focusing on investing in female and minority founders.
On June 9, 2015, Intel Capital, the investment arm of Intel, launched the Intel Capital Diversity Fund for investing in tech startups run by women or “underrepresented minorities.” The $125 million dollar fund will be led by Lisa Lambert, the vice president of Intel Capital.
“Our goal with this new fund is to meaningfully support a technology startup workforce more reflective of society, and ultimately to benefit Intel and the broader economy through its success,” Intel CEO CEO Brian Krzanich said in a press release.
The announcement of the fund comes as part of the $300 Million Intel Diversity in Technology initiative, which Krzanich announced at CES earlier this year. The Diversity in Technology initiative is aiming to have full representations of women and minorities at Intel by 2020.
It speaks to an issue many female founders, such as Partpic CEO Jewel Burks, have experienced firsthand.
“It has been difficult, I would say, to fundraise as both a woman, and an underrepresented minority in tech,” Burks said. “So, for them to set out this particular fund for the purpose of leveling the playing field in that area I think is excellent.”
To qualify for an investment from the fund, a startup’s CEO/founder, or three or more members of its senior management/executive team, must be female or an underrepresented minority.
According to an FAQ on Intel’s website, the fund defines underrepresented minorities as “African Americans, Hispanics and Native Americans, who together make up fewer than 1% of Silicon Valley’s venture-backed CEOs.”
“I’m rooting for this,” said Jessica Mah, founder and CEO of inDinero. “Minority funds for minority businesses are a perfect fit to know how to target and service the minority customer — looks like a recipe for success.”
So far, the fund has made investments in four companies, totaling $16.7 million:
- Brit + Co – Media and e-commerce platform aimed at women and young girls.
- CareCloud – Cloud-based health tech company focused on medical billing and EHR.
- Mark One – Hardware company that produces a smart cup that analyzes drinks.
- Venafi – Cybersecurity software company.
All four of these companies are Intel Capital portfolio companies, meaning they were previously invested in by Intel Capital and are not new investments. This is addressed by Intel in the FAQ section on the fund’s website which states: “We will at times invest in every stage, evaluated on a case-by-case basis, though most investments are with companies ready for growth.”
Danielle Morrill is the CEO and co-founder of Mattermark, an information database on startups and private companies. She said it was exciting to see an active investor like Intel Capital turn its focus towards women and minorities in tech. Although, she said, it probably will not have a major impact on the investment landscape overall as the money was likely already in the Intel Capital fund to begin with.
“It is primarily marketing,” Morrill said. “To really make an impact, we need billions of dollars to flow to these under-invested groups in the next few years,” Morrill said. “But it’s a start, and if they get positive PR from it others might take notice and do the same.”
Mah echoes the hope for domino effect to be started by the Intel Capital Diversity Fund, not only to encourage investors to look for these types of companies, but for women and minorities to be encouraged to succeed.
“If minorities are constantly seeing headlines and success and more and more they start believing they can succeed, when in the past there wasn’t that story or message – certainly, the numbers should increase,” Mah said.