Over 70 Leading Venture Investors Join NYCEDC to Increase Diversity and Inclusion Within the Growing NYC Tech Industry
The Alliance Builds on Mayor Adams’ Blueprint for NYC’s Economic Recovery by Helping Diverse Entrepreneurs Gain Greater Access to Capital
New York City Economic Development Corporation (NYCEDC) today announced the launch of the Venture Access Alliance, a coalition of more than 70 New York City startup investors whose goal and mission will be to continue to increase diversity in the city’s tech and venture ecosystem. The Alliance will achieve this by working to develop diverse workforces, sourcing deals from Black, Indigenous, People of Color (BIPOC) and female founders, rethinking due diligence practices, tracking improvement in diversity data each year, and directly mentoring founders.
The Alliance is co-chaired by Fred Wilson of Union Square Ventures and Jarrid Tingle of Harlem Capital Partners in partnership with the Ford Foundation, Annenberg Foundation, and Tech:NYC. More than 70 venture capital firms have joined the Alliance as founding members, representing a range of small, medium-sized, and large investment firms with operations in New York City.
“New York City is a 21st-century city and a national leader in innovative technology. Just this week, we launched the MyCity Business portal, an exciting application of artificial intelligence to help grow businesses and create economic opportunities for New Yorkers,” said New York City Mayor Eric Adams. “EDC’s new Venture Access Alliance is all about tapping New York City’s talent and diversity and connecting them with our tech industry. New York City is open for business!”
The Alliance was born to encourage venture capital firms to set ambitious yet achievable goals for increasing diversity in their teams and in the companies they fund. Working together, investors can make a difference that will have a lasting impact on the city’s venture and tech community, unlock even higher rewards for diverse and underrepresented founders, and foster an environment of inclusion. The Alliance is centered around:
- Tracking Diversity: The Alliance collects data on diversity in New York City’s venture industry and publishes a report with best practices and benchmarks for startup investors.
- Setting Targets: The Alliance sets ambitious yet feasible targets to improve diversity among New York City venture investments and decision-makers.
- Committing to Action: The Alliance commits investors to develop, fund, and implement actions and collaborative programs that work toward the diversity targets in New York City.
View the full list of Venture Capital firms who enrolled in the Venture Access Alliance here.
NYCEDC also released the report, “Diversity in Venture Capital: Challenges and Opportunities for New York City,” which examines the state of diversity in New York City compared to other venture hubs and national estimates, from leadership and workforces to company funding. The report provides insights on the many ways that venture capitalists and company founders can connect with each other and harness one of the city’s superpowers: the diversity of its entrepreneurs and workers. It offers benchmark data about diversity in the industry as well as best practices and resources for the city’s venture capital community to improve the diversity of their workforces and the companies they fund.
Key Findings from the report show that funding diverse teams makes business sense. Data shows that Diverse Founding Teams have higher returns when cash is returned to investors. Historically, they have earned a 3.26x median realized multiple when they go public (IPO) or are acquired, compared to a 2.50x realized multiple for White Founding Teams, a 30% increase. Data from Cambridge Associates shows that new and developing fund managers consistently as top performers in the asset class, accounting for 72% of the top 10 returning firms between 2004–2016.
The Alliance builds on Mayor Adams’ “Rebuild, Renew, Reinvent: A Blueprint for New York City’s Economic Recovery,” which prioritizes helping diverse entrepreneurs gain greater access to capital. The program is inspired by successful public-private initiatives like PledgeLA, an initiative launched by the Annenberg Foundation and the City of Los Angeles.
New York City is a force in the global tech startup scene and has emerged as the world’s second-largest tech ecosystem, with more than 25,000 tech-enabled startups, 1,200 venture capital firms with operations in the city, and more than $28 billion in venture capital invested in local startups last year. Despite these trends, however, venture funding to startups led by minority and women founders still represents a fraction of the more than $230 billion invested in U.S. startups in 2022. Nationally, startups led solely by women founders received about two percent of funding, and startups led by Black and Latinx founders generally receive about three percent of total venture capital raised. PitchBook and Crunchbase research also shows that women represent less than one fifth of investment decision makers in US venture capital firms, and less than two percent are Black investment decision makers.
The Alliance is part of NYCEDC’s Venture Access NYC initiative to build a more diverse tech startup ecosystem in New York City. The initiative also includes the Venture Access Founder Fellowship, a program designed to improve access to capital and networks for underrepresented founders across all tech-enabled sectors. The Founder Fellowship has already provided resources to over one hundred New York City-based startup founders. Of the teams selected for the 2023 cohort, more than 69 percent include at least one female founder and approximately 80 percent are led by Black, Latinx, and/or Asian founders. Applications for the 2024 Founder Fellowship cohort are currently open through December 5, 2023.
New York City Economic Development Corporation is a mission-driven, nonprofit organization that works for a vibrant, inclusive, and globally competitive economy for all New Yorkers. We take a comprehensive approach, through four main strategies: strengthen confidence in NYC as a great place to do business; grow innovative sectors with a focus on equity; build neighborhoods as places to live, learn, work, and play; and deliver sustainable infrastructure for communities and the city’s future economy. To learn more about what we do, visit us on Facebook, Twitter, LinkedIn, and Instagram.