More VCs recognize the need for adopting and improving D&I business strategies that give women and minorities a chance in leadership roles, but pace of change remains slow

WASHINGTON, DC – While much is still left to be done to boost diversity and inclusion (D&I) in the venture capital (VC) industry, the second edition of the National Venture Capital Association (NVCA)-Deloitte Human Capital Survey found that VC firms are beginning to make some important—albeit small—gains in implementing strategies to attract and retain top diverse talent.

This year’s report found that about one-third of VC firms have a diversity strategy (32 percent) or an inclusion strategy (31 percent), a slight improvement from the first edition of the survey published in 2016, in which less than 20 percent of firms reported having either a diversity or inclusion strategy. Venture capital firms that reported having a D&I strategy in 2018 also reported having more diverse leadership than those without a strategy. For example, VC firms with diversity and/or inclusion strategies reported that 20 percent of their investment partners were women compared with just 11 percent at firms without either strategy.

“While the second edition of this survey shows that VCs still have a long way to go in fostering a diverse and inclusive workplace for investment professionals, it also enables us to begin benchmarking progress over time, and what we’re seeing are some important ripples of positive change taking place,” said Bobby Franklin, President and CEO of NVCA. “The challenge, however, is that diversity and inclusion is a critical issue, and it demands continued and sustained changes that have yet to materialize across the industry. The findings from this survey are just one tool we can use to engage with the industry and help firms continue to work toward creating more inclusive cultures that take full advantage of the wide talent pool available to them.”

Despite progress, women remain underrepresented in investment positions and in leadership

Women comprised 45 percent of the workforce at participating firms, the same percentage as in the 2016 survey. While women remain underrepresented on investment teams and as investment decision makers at VC firms, their numbers are slowly trending upward. Roughly one-fifth (21 percent) of investment professionals in the industry are women, up 6 percentage points from 15 percent in 2016. Women also hold more senior-level roles at VC firms, representing 14 percent of investment partners today compared with 11 percent in 2016. Despite their growing roles, 68 percent of firms said they did not have any female investment partners, compared with 79 percent in the 2016 survey. Among those firms that did have one or more women investment partners, 74 percent reported they only have a single woman partner.

“Diversity and inclusion are powerful growth levers for venture capital firms, regardless of their size or focus,” said Heather Gates, National Managing Director, Emerging Growth Company practice, Deloitte & Touche LLP. “Studies have shown that hiring more female investment professionals is correlated to enhanced returns, better recruiting, and talent retention, as well as more profitable exits and overall improved financial health for funds. Our job is to continue raising awareness of this in the market and provide VC firms with tools they may use to support diversity and inclusion, so VC firms can power performance.”

Millennials are moving into more senior VC positions

The second edition of the report also found that millennials now represent the biggest generational constituency in the industry, with 42 percent currently serving in investment professional roles compared with 35 percent in 2016. Older millennials are in their mid-30s and many are moving into more senior positions, comprising 20 percent of senior-level professionals, the same percentage as in 2016, and 8 percent of investment partners, compared with 6 percent in the previous survey.

“We’re seeing a generational changing of the guards happening right now in which millennials are taking on significant leadership roles, and we believe this will have important implications on the trajectory of diversity and inclusion efforts in the industry,” said Franklin. “Millennials view inclusion as a business imperative that should be central to a fund’s value proposition. Today’s workforce of VC professionals has the potential to use this viewpoint as a key catalyst in accelerating adoption of diversity and inclusion strategies in the years ahead.”

Inclusive cultures are emerging slowly at VC firms

Of all surveyed demographics, the needle on racial diversity and inclusive cultures is moving the slowest. This year’s survey found only slight improvements for Black and Hispanic representation since 2016. Four percent of employees at surveyed firms are Black, comprising only 3 percent of investment partner positions. Meanwhile, Hispanic employees account for 5 percent of the workforce and 3 percent of investment partner positions.

According to the findings, a general lack of diversity and inclusion business strategies or intentions to develop such strategies is creating a drag effect on enabling inclusive cultures. Relatively few VC firms reported having a diversity and inclusion strategy, however, firms that did have more diverse leadership than those without a strategy.

The second edition of the survey also uncovered new insights into HR policies and practices at VC firms, with most VC firms reporting having a series of policies and processes in place to address harassment, such as an employee handbook, anti-harassment policy, and code of conduct. However, only 44 percent have an internal contact identified to report alleged misconduct, while just 17 percent have an external contact identified. Despite the prevalence of policies around anti-harassment and discrimination, only 29 percent of VC firms reported having mandatory prevention programs that address harassment and discrimination, while 10 percent have optional programs. A further 35 percent of firms reported lacking discrimination programs entirely and indicated they were unlikely to offer them in the future.

“Change may be happening, but it’s happening at different rates for different groups and that can be a problem. This is a journey we hope to bring everyone along on at the same time,” said Terri Cooper, Chief Inclusion Officer, Deloitte LLP. “This year’s report underscores the on-the-ground, day-to-day work we still have to do to make diversity and inclusion a high-priority agenda item for organizations across industries, venture capital included. Those firms that succeed at creating more inclusive cultures that actively solicit and value the contributions of all professionals, regardless of background, will find themselves with the greatest competitive advantage in the market.”

Read the full report here.


An email was distributed to 1,428 active VC firms, including NVCA members, asking them to participate in the study. Firms had the option to complete the assessment one of two ways: through a web-based survey, or through an identical spreadsheet. Each firm had a representative, such as their chief financial officer, general counsel, or human resources manager, complete the survey, providing information for the firm and, when available, for each employee. Employees were not contacted to participate individually.

The second edition of the survey collected information from 203 VC firms, representing an aggregate total of $149.4 billion in assets, on their talent management practices and on the demographics of more than 2,700 employees. The research team sought a 90 percent confidence level, which correlates to a margin of error of 5.8 percent for questions answered by all participating firms and 1.5 percent for questions answered about all 2,712 employees. The survey was conducted from October 16 to December 15, 2018. The first edition was published in 2016.