This piece was originally published in Inc.com
In my role as an Entrepreneur in Residence (EIR) at Harvard Business School, I recently participated in a “showcase” event on campus. The goal was to give MBA students exposure to the group of six EIRs. (Sponsored by the School’s Arthur Rock Center for Entrepreneurship, the Entrepreneur-in-Residence program invites accomplished entrepreneurs to HBS to advise MBA students interested in starting companies and work with faculty on research and course development.)
For fun, I was pitted in a mock debate with a Bay Area venture capitalist. The actual content of the argument was not nearly as interesting as the context and subtext happening in the room.
As background, one of my fellow EIRs at the event, Russ Wilcox, the talented co-founder of E-Ink, had earlier in the day pointed out that some HBS students may have a propensity for thinking their own startup ideas are ready to execute. Their first impulse after committing an idea to Power Point is to run to a venture capitalist for feedback – and maybe even funding. Exuberance, while needed when in idea generation mode, might need tempering when presenting a business case.
A prescient student asked, “So when should I go to a venture capitalist?”
When the panel moderator turned to me to answer, instead of saying, “When you have meaningful traction,” I said, “That depends on who you are. If you are a white or Asian male by all means go visit a venture capitalist when you have begun executing demonstrably on your vision. But if you are a woman or any other minority, think twice before you extend your energy in that direction, because VC’s invest less than 5% of their powerful capital in businesses with women founders. Minorities have the same dismal odds.”
The problem as I see it: a lack of a speak up culture for many women and minorities.
I have witnessed it time and again. After such a panel as I was just on, the VC in the room will be surrounded by men, mostly white. The minorities and women in the room are in the background becoming “invisible” to the VC. The venture capitalist is not going to carry a mental image of women or minorities as viable entrepreneurs. Instead, his or her investing biases are going to be reinforced because the circle around him or her is homogenous. The (white) men at the forefront will be the ones most remembered.
The solution: Break into the circle.
Your ideas are no less baked than your fellow students. Would you concede that the white guys around the VC’s are somehow smarter or more talented than women or minorities? Of course not.
So when should you should go see a venture capitalist? I am going to tell you to do it right now. Make him or her see that your energy and ideas are just as worthy as that first circle. We, the majority populations who are currently invisible to venture capitalists, have to claim our ability as founders just as forcefully and publicly as others who have done so for decades.
When we break into the circle, we will break investor bias.