Addressing persistent gaps in access to capital, PledgeLA will bring
non-equity funding and support to Black & Latinx entrepreneurs in South LA
LOS ANGELES — PledgeLA, a coalition of hundreds of venture capital (VC) and tech leaders in Los Angeles working to increase equity, community engagement, and accountability around corporate diversity efforts, today released the results of its expanded, second-annual survey. Launched in October 2018, PledgeLA is a partnership between the Annenberg Foundation, the Office of LA Mayor Eric Garcetti, and 222 Los Angeles venture capital firms and tech companies.
“When the Annenberg Foundation and our Chairman Wallis Annenberg created PledgeLA nearly two years ago, it was grounded in the firm belief that the economic opportunities of LA’s tech sector should be open and accessible to all – and that measurement and accountability towards that goal was key,” said Cinny Kennard, Executive Director, Annenberg Foundation. “We still have much work to do, but know that our driven coalition of leaders from tech, venture capital, city government, and philanthropy are committed to helping bring ever more Angelenos into high-paying jobs and most importantly, to the decision-making table.”
“Los Angeles is a city of belonging. That principle extends to L.A.’s start-ups and tech companies, from entry level to the board room,” said Los Angeles Mayor Eric Garcetti. “As we confront COVID-19 and begin the long road to economic recovery in its wake, our city will keep equity at the core of everything we do and keep the promise of Pledge LA — to bring a more diverse chorus of voices into the heart of our dynamic tech sector.”
PledgeLA companies agree to participate in detailed annual surveys administered by Pluto, a diversity and inclusion platform, that provides comprehensive diversity, equity, and inclusion metrics and privacy controls.
This year’s survey is the largest ever conducted for Los Angeles VC and tech companies. Key findings from the survey and analysis of public data include:
- White Employees Are Overwhelmingly Recruited Through Personal Networks While Employees of Color Typically Go Through Application Process: White employees were overwhelmingly referred by a current team member at their company, while employees of color typically applied via LinkedIn or the company website. People of color were 72 percent more likely to have been recruited via LinkedIn and 90 percent more likely to have been recruited via the company’s website.
- Women Have Made Gains in Representation but Still Lag in Pay Equity: PledgeLA companies showed virtual gender parity among employees and managers (compared to Silicon Valley, which is overwhelmingly male dominated). Despite this, women at PledgeLA companies earn 71.4 cents per dollar, a gap larger than the national average. Women from under-represented minority groups still only represent less than five percent of the workforce.
- PledgeLA Companies are Outpacing Silicon Valley in Racial Diversity: PledgeLA companies have a significantly larger share of under-represented minorities at the employee and manager levels compared to Silicon Valley.
- PledgeLA VCs are Twice As Likely to Back Female Founders, but Women are Still Under-Represented: PledgeLA VCs are twice as likely to fund female founders than Silicon Valley VCs – but women founders still make up just 18 percent of PledgeLA investments. Just six percent of PledgeLA-backed founders are Latinx, seven percent are Black, and 26 percent are Asian founders. In short, founders of color are far more represented in Los Angeles than Silicon Valley, but nowhere near their shares of the U.S. or Los Angeles population.
- VCs Have Ramped Up Their Social Impact: Since 2019, more PledgeLA VCs are mentoring, volunteering, and serving on nonprofit boards. Despite this, it is important for VCs to work alongside accelerator or incubator communities where they can meet under-represented founders and diversify their portfolios.
To take a closer look at the investments of LA venture capital firms, PledgeLA also used public data and an advanced name-identification software to map the diversity of founders receiving funding. The aggregated data from surveys and the report were combined to create a “snapshot” of LA’s progress towards advancing equity in LA tech and access to capital. Combining self-reported data from leaders, staff-level surveys, and public data, this represents the first time VC and tech data have been captured in such detail and with a regional lens.
The complete aggregated results from the survey are available here: https://pledgela.org/accountability/
The events of recent weeks and the movement for Black lives have helped to deepen the national conversation about diversity and inclusion efforts. Leaders must continue their work to set real, measurable goals to advance racial justice and close persistent access gaps in the tech sector and beyond. This kind of commitment to accountability is at the core of being a PledgeLA member – and in less than two years, PledgeLA has built a coalition of more than 200 like-minded leaders across LA that are committed to changing the status quo.
In direct response to the survey findings, PledgeLA and AnnenbergTech are launching the “PledgeLA Fund for South LA Founders,” a $500,000 pool of non-dilutive funding for early-stage Black and Latinx founders in South Los Angeles. South LA is one of the most diverse tech hubs in the city, and faces persistent gaps in access to capital. This non-equity fund, to be raised from PledgeLA member companies and partners, is designed for early-stage founders that might not qualify for traditional investment capital. After participating in a virtual pitch week this fall, 20 companies will be selected to receive a payment of $25,000 to help take their businesses to the next level – with no equity or ownership taken in exchange. To help them scale their business sustainably, the Annenberg Foundation will provide each company with tailored training and support from Grid110, who will pair them with an advisory team of PledgeLA founders and VC leaders.
In addition to the PledgeLA Fund for South LA Founders, PledgeLA has several programs in the works to increase access to jobs for women and under-represented groups with VC firms and tech companies, which include:
- A partnership with Interchange, a new free platform for jobseekers built in partnership with Crosscut, that aggregates startup jobs citywide making early-stage tech opportunities more open and accessible;
- A new mentorship program in partnership with the Riordan College to Career Program at UCLA Anderson, that will connect 50 LA tech leaders with 50 first-generation college students. Meeting at least monthly with their mentees for a full year, PledgeLA mentors will work with PledgeLA to place students in either a tech internship or a full-time role by June 2021; and
- The second cohort of its Summer VC Internship Program. The program, a collaboration with HBCUvc, the Annenberg Foundation, and LA venture capital firms, affords interns ten weeks of experiential learning, including eight weeks of full-time work at a venture capital firm. Of this year’s final cohort, 100 percent identify as a woman or a person of color.
“While it’s encouraging to see more portfolio diversity in LA compared with the national average, we can do better. In a city where nearly one in two Angelenos born today is Latinx, seeing only 6 percent of this community represented in investments is bad for business, and for our region’s innovation and economic vitality,” said Beatriz Acevedo, Vice-Chair of the PledgeLA Advisory Committee. “Amidst a national conversation that is digging into the roots of these inequities, it makes sense for PledgeLA’s collective action to focus on providing capital and support to these talented and often underestimated entrepreneurs in our city. That’s why we are proud to launch a new, non-equity fund for Black and Latinx founders in South Los Angeles.”
PledgeLA actively welcomes new member organizations who share their values of measurement and accountability in diversity and equity. There is no cost to join, and as a benefit, members receive complimentary access to Pluto’s diversity and inclusion platform, including a dashboard each company can use to analyze their results, view tailored recommendations, and compare themselves (anonymously) to similar peers. To learn more about PledgeLA, visit www.PledgeLA.org.
About PledgeLA’s Survey Methodology & Regional / National Comparisons
In a context where a lack of data around diversity and representation is the norm, PledgeLA’s efforts represent a bold step towards authentic local accountability. No other region collects self-reported data on diversity, equity, and inclusion. Most reports traditionally rely on secondary data-sources, such as government records that only focus on race and gender and have no public reporting requirements. Additionally, unlike PledgeLA’s annual survey, which captures both company location and employees’ hometowns, other regional surveys lack specificity when it comes to geography.
To gather this type of data from companies of all stages, PledgeLA partnered with Pluto, a diversity & inclusion platform, powered by survey and communication features that are specifically designed to help advance [DEI] efforts. Pluto offers comprehensive DEI metrics, advanced intersectional analytics within and across companies, and proprietary privacy measures that protect respondent identities regardless of company size. For the comparisons to Silicon Valley, the PledgeLA team used the Center of Investigative Reporting’s 2016 survey of diversity in Silicon Valley as a point of comparison for race and gender data. To benchmark our venture capital portfolio data, we indexed our findings against the 2019 RateMyInvestor Diversity in US Startups report, which analyzed the investments of 135 non-overlapping firms.
PledgeLA is a first-of-its-kind partnership to promote civic engagement, diversity, and inclusion across LA’s booming and dynamic tech sector created in partnership with Mayor Eric Garcetti, the Annenberg Foundation, and over 200 Los Angeles venture capital (VCs) and tech leaders. PledgeLA members make a commitment to track their community engagement and diversity data each year and make that data publicly available, as well as expand their engagement with local nonprofits that support diverse talent and reflect the civic spirit of Los Angeles. Additional support for PledgeLA has been provided by the Weingart Foundation and the Conrad N. Hilton Foundation.
About the Annenberg Foundation
The Annenberg Foundation is a family foundation that provides funding and support to nonprofit organizations in the United States and globally. Since 1989, it has generously funded programs in education and youth development; arts, culture and humanities; civic and community life; health and human services; animal services; and the environment. To learn more about the Annenberg Foundation and their various initiatives, click here.
Pluto is a workforce analytics and communication platform that equips companies with the tools they need to build a diverse, inclusive and equitable organization. Pluto provides actionable insights through its comprehensive analytics, allowing companies to assess their strengths, weaknesses and opportunities to more efficiently tailor their initiatives and measure impact over time. Pluto is used by companies across industries ranging from the Fortune 500 to startups and nonprofits, and by all who understand diversity, inclusion and equity is important for the success of their organization. To learn more, visit www.pluto.life.
PledgeLA Venture Capital Signatories:
Act One Ventures, Activist Artist Management, Alpha Edison, Amplify, Backstage Capital, BAM Ventures, Baron Davis Enterprises, BCG Digital Ventures, Beach View Capital, Blue Skies Unlimited, Bonfire, Bracket Capital, Bryant Stibel, Clocktower Technology Ventures, Comcast Ventures, Cooley LLP, Core Innovation Capital, Countrywood Holdings, Crosscut Ventures, Diverse Communities Impact Fund, Embark Ventures, Early Growth Financial Services, Employment Technology Fund, Evolution, Fifth Wall Ventures, Fika Ventures, First Republic Bank, Gearup 360 Group, Greycroft, Halogen Ventures, HMC INQ Intelatin, KohFounders, KW Capital Partners, LDR Ventures, List Ventures, Los Angeles Cleantech Incubator (LACI), LPC Ventures, Luma Launch, M13, MarsBio, M Ventures, MaC Venture capital, March Capital Partners, MiLA Capital, MOBD Ventures, Moonshots Capital, Mucker Capital, Muse Capital, Navitas Capital, Okapi Venture Capital, OPV, PLG Ventures, Plug and Play, PLUS Capital, Pritzker Group Venture Capital, Quake Capital, Roadster Capital, SA&M Preccelerator, SamsungNext, Scopus Ventures, Silicon Valley Bank, Sound Ventures, Stage Venture Partners, Starburst Accelerator, Stat Zero Group, StillMark, Sutton Capital Partners, Tale Venture Partners, Techstars, TenOneTen Ventures, The 22 Fund, The West Coast Consortium For Technology & Innovation in Pediatrics, Troy Capital Partners, Trousdale Capital Management, TYLT Ventures, Upfront Ventures, USC Marshall Venture Fund, VamosVentures, Watertower Ventures, Wavemaker Partners, Women’s Innovation Fund Accelerator, and Wonder Ventures
PledgeLA Tech Company Signatories:
2Swim, 7TILL8 Wetsuits, 70 Million Jobs, 81cents, AlgoPay, Inc., amginE Ink, LLC, Aspiration, AudioCardio, Avisare, Basepaws, BESE, Beyond Meat, Bird, Blue Fever, Boingo Wireless, Breadware Inc., BUENA, CareNodes, CGI, COMUNITYmade, Cornerstone OnDemand, CPR Save, Creative Spoons, Croquet Corporation, DailyKarma, DASH Systems, Inc., Data 360, Denken Solutions Inc., Developing Capacity Consulting, Dollar Shave Club, dot.LA, Elevate My Brand, EMWDESIGNS, Emblematic Group , Encantos, Enplug, Ettitude, Everytable, Expy Health, FabFitFun, Factual Inc., FairClaims, Fama, FamiLeague, Inc., FareShare, FEARLESS World Building for Womxn, Fernish, findSisterhood, Finli, FLATLAY Inc., Flavors from Afar, Giftata, Gladeo, Golden, Good Job, Grid110, Hawke Media, Heir Apparent, Helpr, Holisticism, Honey, HopSkipDrive, Hot Bit VR, Hub101, Idealab, Inclusology, influence.co, Jam City, Jimaye, Joymode , Jump Watts Inc., Kitchen Table App, Larta Institute, Launchmaps, Lawgood, Liquid, Lorals, Lumenus, Mahmee, MediaAlpha, Me Tyme Network Inc., Microsoft, Mikomoss Labs, MixR, Mondays Labs, Motiv, NEXT Trucking, Noun Project, Nuyorktricity, Officebook, Omaze, OurOffice Inc., Ozobot, PAIRE, Peak Metrics, Perch Mobility, Inc., Pick My Solar, Ping, Pledgeling, PocketCFO, Pocketwatch, Presidential Consulting & Marketing, Rapid7, Reel, Riders Share, Sabio Enterprises, Inc., ScaleLA, Soarin Energy, Inc., Snap Inc., Soylent, SteelHouse, Stellar Agency, StoryPlace, SUEZ, Symantec, Sweet Flower, sweetgreen, TALA, Tastemade, TechMahindra, Techonsite Corporation, TecnoLatinx, The Bouqs Company, The Handoff Company, Thrive Market, Toucan, Tradesy, Trappit, US, TuesdayNights, Two Bit Circus, UNOMi, Valence Enterprises, Inc., Vertical Networks, Virgin Hyperloop One, VNTANA, #WeAllGrow Latina Network, Wellsayer, WeTransfer, and Zypp