Silicon Valley gets a taste of what the public thinks of the tech sector
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During the chaos last weekend after Silicon Valley Bank was taken over by federal regulators, but before they guaranteed customers access to their deposits, there was panic in the tech world and pleas for the government to step in and help thousands of businesses that could have been crushed.
But cries of victimhood from the tech sector? Well, they were often met by the internet’s smallest violin, and the government’s actions to stabilize the situation were sometimes derided as a “billionaire” bailout for privileged tech bros.
Sarah Kunst, a general partner at the venture capital firm Cleo Capital, talked to Marketplace’s Meghan McCarty Carino about Silicon Valley’s image problem. The following is an edited transcript of their conversation.
Sarah Kunst: There are a lot of people who have understandably strong opinions about Mark Zuckerberg or Elon Musk or Jason Calacanis, because these people are out there sort of trying to get the biggest audience possible, doing things that seem to be mainly focused on enriching maybe themselves versus making the world a better place always. And so very divisive, very public figures are often sort of the tip of the spear for any specific industry. But there’s a long tail of venture capital investors that people don’t think about or don’t know, and candidly, a lot of people would like if they got to know them.
Meghan McCarty Carino: And yet — as we’ve talked about many times on this show, and you have research to back up — it is probably pretty fair to say that the VC ecosystem and the tech industry at large does have a real diversity problem, right?
Kunst: Oh, absolutely. I mean, I recently did research with Harvard Business School professor Paul Gompers, and it showed that the diversity in venture capital, in terms of who actually has capital to deploy, is even worse than we thought. So about 62% of all capital is controlled by white men. Less than barely 1% is controlled by Black people. Of that 1%, 99% of that 1% is controlled by Black men, .03% of that is controlled by Black women. And so it’s just one of those things where there’s this stunning inequality. Globally, we have a problem about how deeply inequitable money management distribution is, and certainly venture capital is a part of that problem.
McCarty Carino: So do you think that that slow rate of change in the industry contributed to the kind of public relations challenges that became apparent over the last week?
Kunst: I mean, I think that tech has had, for a long time, a very specific image. It’s sort of boy wonder, boy genius, older boy wonder and the Elon Musk model. And we see this everywhere from sort of who is lionized in the press to who has TV shows about them, all of that. The only real example of a woman founder that a lot of people are familiar with would be somebody like Elizabeth Holmes. And that’s a totally different story. And even then, you’re talking about a conventionally attractive, young, white woman who went to Stanford. And so I think that expanding that aperture and saying, “What do founders actually look like?” — and that’s on both sides. Not only is it looking at who are we lionizing, but it’s also looking at who are we just platforming, period. So even when you’re outrage sharing “I can’t believe this tech bro did this thing,” you’re still giving them more oxygen, and it’s like a fire. Don’t do that if you don’t like it. Focus on the inspirational, amazing founders and investors that you are excited about who are more diverse and amplify those voices. And that helps even it out.
McCarty Carino: Yeah, I started to see at a certain point last weekend a lot more circulation of stories, of founders who maybe didn’t fit that kind of stereotypical, tech-bro mode that I think a lot of people were thinking of. And then people piling on top of that saying, “Well, those are just outliers. Silicon Valley does have a real problem.” And we are talking about tech bros here. And that’s kind of why I wanted to talk to you, because I feel like you can really speak to both things can be true at once.
Kunst: Absolutely. And I think both things are true at once. And I think it’s really dangerous to sort of say, “Oh, tech people only look one way,” because that’s also sort of an erasure of the people like me, like many of my colleagues. And are there enough of us? Absolutely not. Is it a massive problem? Yes, it is. But erasing those of us who are here doesn’t help either. And so the reality is, you look at the numbers, you look at the data, and you say, “This isn’t good, this is bad.” And then you also turn around and say, “But here are the people who are here, and how do we get more of them?” And the good news is that getting more of them isn’t that hard, it just means that you need to go out and decide where you’re going to send your investment dollars, which fund managers you’re going to back. Even the products you buy. Are you buying products from women, from people of color? Because that revenue gives them the leverage to then go back and continue to raise more money.
McCarty Carino: So could this whole SVB mess and kind of the fallout from it change things for better or worse?
Kunst: You know, I hope that it changes things for better in the short term. That’s probably unlikely. Whenever there’s economic dislocation, disruption, in general, what you’ll see is that people sort of retreat to safety and what they know. And unfortunately for a lot of these investors and a lot of these founders, backing and hiring and investing in women and people of color is not what they know. But I think that the attention of this moment can certainly be be leveraged and utilized for good.
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