Democratizing VC Leadership with Marlon Nichols, of MaC Venture Capital. #1
Marlon Nichols @MarlonCNichols, founding managing partner of MaC Venture Capital @MaCVentureCap, talks about how more diverse private investment leadership can bring us closer to equity in our near future. Let's make the 2020s the Inclusive Decade.
Links:
NVCA: VC Human Capital Survey, 2021
@PaulJudge / @TopeAwotona / @RubenHarris / @DaveSalant / @SongeLaRon
Brian: This is Brian Smiga, the Speedy VC, here asking the question, “How will private investments get us to equity in this decade of the 2020s?” Our guest today is an expert who's going to open up our minds to new ideas. Please welcome the co founding, managing partner at Mac Venture Capital, Marlon Nichols. Hey Marlon.
Marlon Nichols: Hey Brian.
Brian: How are you?
Marlon Nichols: Good, good.
Brian: So Marlon, I know you can share some of the best ideas coming from your practice as a venture capitalist and from your portfolio. And how do we get to a more inclusive society by 2029 if we really focus on it in this decade? What are your ideas?
Marlon Nichols: Yes. I think decision makers, right? It's a natural tendency I think for people to want to hire, invest in, work with people that they have things in common with. Whether that be you grew up in a similar town, went to similar schools, you're part of the same organizations, et cetera. It's just a level of comfort. And as people, we gravitate towards comfort. And so, if we want to change the numbers in terms of the underrepresented folks and minorities that are represented in businesses, we're going to have to change the decision makers to make sure that those decision makers resemble some of those people... well, in race, ethnicity, culture, experiences, et cetera. And as far as startups go, if you're going to attack it at the source, then it becomes a conversation around how do we get more general partners that are Black and Brown in those seats? Because there's a lot of data that shows that Black and Brown investors will invest more equitably in Black and Brown founders.
Brian: When you say Blacks are underrepresented in the executive ranks of startups by 82 percent, unpack that a little bit more for us.
Marlon Nichols: I mean, it's not much to unpack. The population, I think, for a census data says there's about 13percent of the US population's Black. About 20-22 percent are Latinas. And those two groups combined represent about two percent of leadership within startups.
Brian: Right. So that's even more stark when you put it that way, they're 35 percent of the population, over a third, and yet they're only two percent of the leadership. And yet, data shows, and you shared some of this with us, that teams that represent their customers, diverse teams, outperform both on acquisitions and IPOs. So it just makes good business sense to start building more diverse teams.
Marlon Nichols: Yes, you want your product to resonate with the majority. And Black and Brown is quickly becoming the majority, and so... the only way that you're going to be able to speak the same language, so to speak, is to have folks in your organization that actually speak the same language, have those experiences, know what it's like to grow up and live as a member of that community. And if you don't, you going to create products that will ultimately fail or not garner the attention and support from that community. And you won't have a successful business. So at some point, it's going to become even clearer to executives and companies that this is a must do, this is a mandate, and it's a prerequisite to success.
Brian: So it's happening a bit today, and maybe we got a little bit of acceleration in 2021. What were the highlights you see in iterating more general partners that are Black and Brown and diverse in venture capital, who then in turn back teams that are more diversified?
Marlon Nichols: I think we're getting more entrance into the limited partnership game, right? So you got corporations and banks, Goldman Sachs, Bank of America, PayPal, Foot Locker, Twitter, those are just some of our corporate and banking limited partners, all of which were not investing directly into funds at a significant level prior to 2020. And all of which have a stated mandate and goal that they want to make sure that a lot of those dollars, those LPLs, are going to diverse fund managers for the very reason that you mentioned.
Brian: Great. So really, the LPs are part of what's driving this. What about the general partner candidates themselves? Do you feel that more talented folks are going to abandon investment banking or safer financial programs? Or more entrepreneurs of color are going to enter the ranks as VCs?
Marlon Nichols: I mean, it's happening now. There are a ton of Black emerging managers, right? There are a bunch of folks that are starting their own firms, having left some of those industries that you just mentioned. So yeah, it's already happening.
Brian: So for listeners, there's a few groups that people could join up to if they're of color and want to learn more. Is there any place you'd point, either venture newbies or entrepreneurs thinking about entering venture? Or people of color practicing in venture, but practicing it alone. What communities or groups are there for people to collaborate with?
Marlon Nichols: I think Black VC is a terrific organization.
Brian: What does it take to join Black VC. Do you have to get invited by a fellow?
Marlon Nichols: No.
Brian: How's it work?
Marlon Nichols: It's an open community, right?
Brian: Okay.
Marlon Nichols: They're going to do a number of events and they're open to the public, all you have to do is follow them on Twitter. The handle is #BlackVC.
Brian: Great.
Marlon Nichols: And other organizations like the Kauffman Fellows Program, who are a member of our board, and we're doing a lot of work to make sure that our classes of fellows includes more diverse folks. And publish a lot of reports and information in and around the space. So I think those are
two great organizations to follow.
Brian: Exiting entrepreneurs, any highlights there that you'd like to focus on?Founders of color that are exiting and then starting their next company or becoming venture capitalists or becoming high net worth LPs themselves.
Marlon Nichols: I mean, Paul Judge is a great one, right? Founder of Pindrop. He has another company before that. He's doing some work with SoftBank. Tope Awotona, founder of Calendly, in Atlanta. Ruben Harris of Career Karma. Dave Salvant and Songe LaRon of Squire. And many others outside the US. There's a great number of people.
Brian: Out of time! Thank you, Marlon. This has been the Democratizing Growth Podcast, with Marlon Nichols, Founder and managing partner of Mac Ventures.
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