Cultivating a culture and practice of diversity, equity, and inclusion (DEI) has become a core principle for entrepreneurial ecosystem builders. As part of the Insights from the Field campaign, I wanted to hear from other ecosystem builders in the field about their approaches to DEI, and hopefully identify specific techniques that they’ve incorporated in their communities.
A prerequisite to incorporating specific techniques is a fundamental mindset and world view of why DEI is crucial to equitable economies. Kate Jackson, an ecosystem builder in the Chicago area, described the ‘why’ of this beautifully.
“Because right now, it is anything but equitable. The current ecosystem excludes far too many, denying economic opportunity and a shot at the American Dream to all,” said Kate. “And we know this matters because entrepreneurship can address rising wealth inequality and offer a path to upward mobility and building generational wealth. What does it say about us when we don’t allow certain groups of motivated, innovative, and optimistic people access to the resources they need to start up and scale up? What does it say when we tell them their ideas and dreams are unworthy because they don’t fit into some narrow model of a startup founder? It is incumbent upon those of us working to build vibrant entrepreneurial ecosystems to put inclusion front and center, at the heart of everything we do. It’s not an afterthought. It is the whole thought. That’s the only way we are going to make our ecosystems equitable and resilient.”
Kate went on to explain the importance of laying a strong foundation by educating ourselves and listening to the perspectives of others in order to understand their needs. “We approached this work by first grounding ourselves in and listening to the needs and pain points of the under-resourced and under-represented entrepreneurs in our ecosystem,” said Kate. “In our ecosystem, this includes black, Latinx, LGBTQIA, people living with disabilities, and women founders. We are actively working to ensure that individuals regardless of gender, background, race, and place have equitable support to reach their full potential and succeed in entrepreneurship.”
Moving from the ‘Why’ to the ‘How’
“If we don’t bake D&I into the recipe of ecosystem building—not the frosting, not as the add on—if it’s not an essential, intrinsic element to ecosystem building—what you will do is reinforce ‘the good old boy’ network that occurred in corporations in the 1980s in the ecosystem world in the 2010s and beyond. And when you do that, what you will actually do is the reverse of what the power of ecosystem building is.” ~ Dell Gines
Understanding why something is important is one thing. Knowing how to incorporate it is another. My hypothesis is that if we, the ecosystem building community, can spotlight specific techniques, programs, and actions that other ecosystem builders are implementing in their communities, that more ecosystem builders can replicate those actions.
“We need to open ourselves up to other people’s knowledge and experiences. Asking questions, reading and listening to someone’s lived experience is the only way to get past assumptions and acquire knowledge that is not your own.” ~ Cecilia Wessinger
As Cecilia Wessinger points out in the quote above, a good first action ecosystem builders need to take is to listen and learn. In a recent interview, Cecilia outlined five steps ecosystem builders can take create an inclusive, representative, and equitable society.
- Listen and Learn
- Review and Acknowledge
- Remember the Platinum Rule
- Engage and Empower
- Awareness and Accountability
In the Winston-Salem ecosystem, Magalie Yacinthe is helping their partners integrate DEI policies. “As an organization focused on inclusive entrepreneurship, we have implemented “HUSTLE Moments” into our ecosystem where we provide DEI policies or practices to our partners to help integrate it into their programming and processes to better serve all entrepreneurs,” said Magalie.
. . .
Dustin Shay in New York went above and beyond in providing specific actions that ecosystem builders can take to be more inclusive and equitable. Dustin works for Village Capital and says that they have approached cultivating DEI in two ways; in supporting entrepreneurs and internally in their own operations.
In supporting entrepreneurs, Village Capital has flipped the power dynamics model by using a peer selection process. “We based our entire model on flipping the power dynamics between investors and founders by employing the peer selection methodology,” says Shay. “This approach has selected entrepreneurs to evaluate one another on key due diligence criteria (team, product market fit, etc) to determine overall investability. Village Capital then would engage investors to invest directly in these peer-selected ventures (eventually raising its first fund, VilCap Investments, to make this process easier, faster, and give us some potential upside in the selections).”
Shay points to the results they’ve seen as evidence that their peer selection is more inclusive and delivers stronger financial returns. “This approach has developed a portfolio that is 46% women-led (4.5x more than traditional VC), 34% led by Black and Latinx founders in our US investments (over 10x more than traditional VC), and 86% outside of Boston, New York, and San Francisco (as opposed to the 50% of global VC going to MA, CA, NY). We’ve also experienced 18 early and profitable exits and are outperforming the average fund of our vintage year.” (Check out The Flipping the Power Dynamics report to see detailed results).
Dustin Shay’s Suggestions for Incorporating DEI into Programs
Dustin went on to share ways they’ve incorporated a practice of DEI in their programs.
Develop program-specific advisory boards from under-represented backgrounds
“Our advisory boards influence program design – particularly recruitment and selection – and represent a wide range of backgrounds, including corporate, entrepreneur, investor, and other sector experts. They’re also demographically representative, including voices from Black, Latinx, and Indigenous folks from across the regions in which we’re operating our program (ie: Indian programs would have several different caste representatives, Latin American programs include folks from smaller countries and Afro-Latinx folks, etc)
Eliminate quotas, but favor inclusion
We do not have a quota for our work, but we mark it as a sign of failure in our programs if we do not put together a representative group of selected participants – and we have shut down programs/restarted recruitment to live by this value in the past.
Mentor inclusivity programs
Our team has developed and implemented specific mentor inclusivity standards that we adhere to in order to make a more comfortable environment for our program participants.
We build deep relationships with representatives of specific demographic groups (ie: Hispanic chambers of commerce, etc) in order to ensure we’re casting as wide a net as possible.
Dustin Shay’s Suggestions for Incorporating DEI into Team Operations
In our team and operations we’ve taken a conscientious approach of creating broad pathways to joining the Village Capital team, with internship programs, relationships with universities, etc. We have a commitment at the board level to making sure that we have a diverse and inclusive staff and have been moderately successful on this front. In the US, our team is majority non-male and we have strong representation from many (but not all) demographic communities. Around the world, our organization is led by locals. But we’ve had to do a lot of work to get here – and we’re not done by any means.
Ongoing third-party consultation
Beginning last spring, we retained a third party consultant to surface the DEI concerns of members of our team to management and executive teams and to create a plan to address concerns we’ve heard.
Board commitments to DEI
We’ve established a series of commitments from the Board level throughout the organization that relate to new policies on everything from compensation transparency to representation on the Board to external grievance processes and more.
One of the biggest barriers to the DEI work we’ve done internally has been communicating these steps to the full team. We’ve held 1:1, small group, and all-hands presentations to continuously improve and disseminate this information.
New management structure
We’ve spent a lot of time evaluating our management team structure and have initially started with expanding that team, but are now in the process of taking a radical approach to changing the way strategic decision-making happens and is distributed across the team. More to come as we have it.
Additional Ideas and Resources on DEI and Ecosystem Building:
The entrepreneurial ecosystem building community has many top-notch thought leaders who have written and spoken on how to cultivate a practice of inclusion, diversity, and equity in ecosystem building programs. Check out the links below for more great resources.