Changing venture capital from within, a deal at a time

05.25.2021 - By Marketplace Tech

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The tech industry, like most of America, is grappling with its lack of diversity and its systemic inequality. At the top of that pyramid is venture capital. In the VC industry, it’s hard to break through as either a startup founder or an investor. Last summer, Act One Ventures general partner Alejandro Guerrero created a diversity rider for venture capital firms to use in their investment deals. It says a startup and the primary investor in a startup will make every attempt to include a member of an underrepresented group as a co-investor. Guerrero said now more than 50 VC firms have adopted the language, as well as a big law firm that made it standard in all its term sheets — basically the bullet points of an investment deal. He told “Marketplace Tech” host Molly Wood that the point of the rider is to pause the deal-making process and think about who isn’t in the room.
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