In other News, Water is Wet
This week I read Illumen Capital’s new study that found “…that race is a factor in investment judgments”. It was written by CEO, Daryn Dodson. I met Daryn over a decade ago in Georgetown. I found him extremely smart, engaging and committed to doing well by doing good. He just started at the Calvert Fund. He’d just moved from New Orleans. I have followed him ever since. He has blazed trails ever since. Kudos.
I urge you to read the excerpt above and the full article. In case you don’t read the article, I hope that my takeaways encourages you to dig in… I categorize my takeaways into my “What” list and “So What” list. I also share my “Now What” based on this diverse founder’s reality. I’d like to hear your takeaways too. Please comment and/or highlight. I’d love to know your thoughts, as well.
WHAT
- Study was done by Illumen Capital and Stanford SPARQ research team. So… it’s very credible.
- $69.1 trillion of global financial assets under management across mutual funds, hedge funds, real estate and private equity.
- Fewer than 1.3 percent are managed by women and people of color.
- Non-diverse funders were not as easily able to handicap diverse team’s capability and competence.
- Racial bias is systematic. As an example, Black-led fund managers are judged more on their race as White-led funds get scored more favorably despite their lower performance numbers.
- Despite racially diverse teams getting the benefit of the doubt at the bottom, the top had no interest in them.
SO WHAT
- “The influence that these beneficial institutional investors have on the entire chain of financial intermediation, capitalism and even society cannot be overstated” added Dr. Ashby Monk.
- The problem is not a pipeline problem.
- If things do not change, being a great, black funder is to your detriment.
- Researchers believe that more research, awareness, training, and coaching as well as changes to industry practices can help the make-up of funders and improve the impact of investment community and for society at large.
NOW WHAT
My thoughts are straight forward. Life is like a differential equation. If you know the initial and boundary conditions, you should be able to solve the problem.
My initial condition: I am a fairly large, African-American male.
The boundary condition: The world isn’t fair.
Some people are good and others aren’t. I know that for founders like me that life will be hard or at least harder. I am thankful that I grew up in a time easier than my parents and a lot easier than my grand-parents. And so, my plans are to make the best of my circumstances and thank God that things will be better for my children.
I can’t change minds of funders that are biased against me or my company. So what I have done is found people who are able to fill in my gaps, developed a product that has a disruptive competitive advantage, and built presales that will help us generate outsize revenues. Not all investors will be biased against that… so far, we enjoy what I call the best backers (investors and stakeholders). The individuals and their companies make a difference to founders like me. And so, we thank the companies that are helping Optimal to #EndEnergyPoverty. (Note: we will constantly update this list… our journey has just started and we thank you for being a part of it).
