The lack of women in venture capital is a well-known issue, but recently more people have started paying attention to the crucial lack of Latina women specifically.
The statistics about women in VC are stark: in the United States, women comprise only 9% of investment partners at venture capital firms, and 74% of venture capital firms do not include a female partner. When women do have the reins, their experience and abilities do not always translate into success--although 85% of women leading MicroVC firms had prior VC experience, compared to men's 35%, it took their firms an average of 5 months longer to raise funds, and when they did, it was on average $4 million less.
While gender diversity needs to be a priority going forward, people who experience multiple dimensions of disadvantage are even more underrepresented in the upper ranks of firms. Latina women are one of the least represented. There are so few Latinas in VC that they can be enumerated easily: to date, only 32 Latinas operate in the venture capital industry. Only eight Latinas hold Partner or Managing Partner roles. Clearly, something needs to be done to increase Latina representation in firms, and steps are already being taken to address this issue.
The Global Women in Venture Initiative is a movement designed to foster collaborative and international resources to enhance professional development of current Latinas in venture capital. This effort teaches best practices, how to increase pipeline to deal flow and attract limited partners. The issue is mainly an opportunity and awareness problem. It starts before people have even decided what career track to pursue, and should be addressed at the level of university education. As Jomayra Herrera of Emerson Collective puts it, "Earlier exposure can help with [the lack of awareness]." Venture capital firms who want to address this diversity issue should consider building partnerships with universities to facilitate an explicit program for women in the fields of Finance and Business Development. To raise awareness of the field, this program should introduce "Venture Capital 101," the basic concepts of the industry, and typical career paths in it, in a way that is accessible to students of all backgrounds.
Awareness is only one side of the issue. Once they know about the work, minority students may still be dissuaded from pursuing it if they feel they will not have support in the field or feel singled out. As Herrera says, "Most events I go to, I tend to be the only female, and I'm usually the only person of color." That's why the next step in the university partnership should be to make resources available to help individuals develop a career strategy in venture capital so they can really picture themselves in the industry. This should also include elements like resume reviews and interview techniques so that individuals feel they are prepared and have a real chance. This program should also provide mentors for females in venture capital to specifically encourage female students.
Not only do Latinas in venture capital need better opportunities to be mentored early in their career paths, but they also deserve better networking opportunities. We should build the network of current Latinas in VC to provide internship opportunities for students and recent graduates. This would also assist with the mentoring shortfall, while giving Latinas who are interested in VC work a chance to get a foothold in the industry with firsthand experience. As Maria Salamanca, a Latina VC at Unshackled Ventures, puts it, "I think, more often, Latinas either tend to start their own funds or join new and up-and-coming micro-funds...It's not like joining a firm with an established internal mentorship program. The funds we join are usually less structured and might not have very specific professional development tracks and mentoring. It makes it harder to reach out to partners at other funds, because we don't have a relationship with them." This issue could be addressed through a proactive networking strategy that gives current Latinas working in venture capital a chance to connect with each other and with new people who are interested in joining the field, but may not know where to start. “Members of minority groups can help support each other and provide crucial advice to the younger generation about what they wish they had known when they were starting out in the field,” says Tyson Pratcher, an avid supporter of WMBE (Minority and Women Owned Business Enterprises) asset management seed-investor. This is great advice that minority early-career candidates may not otherwise hear from non-diverse mentors.
It is imperative to increase the diversity within the industry, not just because it is the right thing to do, but because diversity is an asset to a future-minded company: as Jomayra Herrera puts it, firms without diversity are "literally leaving money on the table." She says that in venture capital, "you're investing in a vision you have for the future...that future will be incredibly diverse and very different from what was in the past. So, you have to have different perspectives."