The ‘Delusion Around Inclusion’ Obscures Promising Investment Opportunities for Years to Come

Austin Clements, partner at Slauson & Co., Managing Director for South LA at Grid 110, and PledgeLA chair, published this thoughtful Medium commentary on how in a time of increased conversation around social justice and a greater focus on investing in founders from underrepresented backgrounds, observers are still missing the forest for the “untapped” trees – a dynamic that results in fewer such entrepreneurs even seeking, much less receiving, venture funds that might create breakout businesses. From the article:

But I’ve noticed something else taking place on the sidelines. Many onlookers view investing with a representation lens as a constraint, rather than a thoughtful investment strategy. They know just as well as we do that founders from diverse backgrounds represent a tiny percentage of venture backed startup founders, but their belief is fund managers focusing here are limiting their opportunities.

That view actually distorts what is actually happening. As fund managers with this lens, we are not suggesting we’ll catch the best fish by only focusing on one corner of the pond. On the contrary, what we are saying is “forget the pond, let’s spend time in this massive lake where hardly anyone is fishing.”

While some investors, Clements writes, worry about over-saturation of venture funds oriented specifically to identify and invest in these opportunities, the disparities are far from resolved — and it is exactly this approach that will help realize massive untapped potential and strong performance in the decade ahead.

Read the full article here.