On Tuesday, the Kauffman Fellows unveiled its most diverse class yet: Of 61 investor trainees, 41% are women and 49% are people of color. It also announced that its board is now the most diverse it's ever been, thanks to three new members.

The program is betting that the board's increased diversity will help maintain the growth in diversity of its fellowship cohort — a virtuous cycle in a program where its group of fellows helps nominate and evaluate future trainees.

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Going forward, Kauffman Fellows CEO Jeff Harbach sees this approach as one way to develop a more inclusive venture capital industry.

"I'm not going to tell any particular firm what to do about their next hire or their partnership dynamics or whatever else, that's for them to figure out," Harbach told Protocol. "But gosh dang it, if you're not doing your part in making your firm and the venture ecosystem look more like society as a whole, then you're lagging behind. It's not good enough."

The Kauffman Fellows' approach of leading from the top is just one way the venture community is tackling racial inequality. Earlier on Tuesday, for instance, the National Venture Capital Association unveiled its new nonprofit, Venture Forward, to make opportunities in venture capital accessible to people of all backgrounds.

The announcements from the Kauffman Fellows and NVCA were months in the making and not just a reaction to the news of the past few weeks. But the Black Lives Matter protests in the wake of George Floyd's murder have magnified the importance of the venture community tackling racial inequality that's pervasive in its ranks.

"I'm very hopeful that this is a moment of change," Harbach said. "I can't imagine having so much momentum over the last couple weeks with so many emotional stories being shared that this would just go away or fall on deaf ears, and it gives me that hope that I know that we're not alone in this. There are people that have been working on this intently and will continue to work on it."

The investor training program has been working to improve representation in its fellow classes for years and has graduated notable alumni like Kleiner's Mamoon Hamid, Bessemer's Elliott Robinson, Aspect Ventures' Jennifer Fonstad, Defy Ventures' Trae Vassallo and Andreessen Horowitz's Chris Lyons.

But the last year has been "phase one" of a process to have its board more broadly reflect society, Harbach said. That includes adding the three new board members: Kauffman alumni Marlon Nichols (MaC Venture Capital), Melissa Richlen (MacArthur Foundation) and Allen Taylor (Endeavour). Their additions bring the board to one-quarter Black and three out of eight women. Next, Harbach wants to add more international representation to the board.

The program has also been trying to find new ways to diversify its revenue sources so that it's not as reliant on tuition dollars — which are currently $80,000 for the two-year program. Del Johnson, a venture capitalist not affiliated with the Kauffman Fellows, recently criticized the program's price tag and questioned what it was doing to make it more accessible.

The goal of the business model rethink is to both lower the tuition amount in the future so it is more accessible and also to try to find more sponsorship for its scholarship program, Harbach said. In the last year, the Kauffman Fellows program doubled the amount of scholarship money it doles out after partnering with companies like Carta and the Business Development Bank of Canada, Harbach said. It also worked with Textio and the Kapor Center to evaluate its applications and interview materials.

"We know that new fund managers and oftentimes women and underrepresented minorities are disproportionately affected by high tuition rates. So we've been focused on a lot of different efforts around making sure that we lower tuition and gain more access for fellows in need," Harbach said. "We don't want finances to be a reason why someone doesn't do the program."