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How do you make VC more diverse? Maybe start with the training schemes

Kauffman Fellows is diversifying its board and rethinking its business model in an attempt to make its investor classes more accessible.

Marlon Nichols of MaC Venture Capital

Marlon Nichols of MaC Venture Capital is one of the Kauffman Fellows new board members.

Photo: Steve Jennings/Getty Images for TechCrunch

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.

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."

Microsoft wants to replace artists with AI

Better Zoom calls, simpler email attachments, smart iPhone cases and other patents from Big Tech.

Turning your stories into images.

Image: USPTO/Microsoft

Hello and welcome to 2021! The Big Tech patent roundup is back, after a short vacation and … all the things … that happened between the start of the year and now. It seems the tradition of tech companies filing weird and wonderful patents has carried into the new year; there are some real gems from the last few weeks. Microsoft is trying to outsource all creative endeavors to AI; Apple wants to make seat belts less annoying; and Amazon wants to cut down on some of the recyclable waste that its own success has inevitably created.

And remember: The big tech companies file all kinds of crazy patents for things, and though most never amount to anything, some end up defining the future.

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Mike Murphy

Mike Murphy ( @mcwm) is the director of special projects at Protocol, focusing on the industries being rapidly upended by technology and the companies disrupting incumbents. Previously, Mike was the technology editor at Quartz, where he frequently wrote on robotics, artificial intelligence, and consumer electronics.

Is this a VC bubble, or just the new normal?

Huge deals, little diligence and hyper-fast follow-on rounds have become commonplace. For now.

Things are looking awful frothy, aren't they?

Photo: Drew Beamer/Unsplash

The VC industry is "frothy," "overheated" or "bonkers," investors say. Whether this is the new normal or unhealthy signs of an overheated market depends on your point of view — and how well your portfolio is doing.

There are signs that VC has changed all around. In recent months, deal sizes and valuations have spiked in hot deals; due diligence on startups has evaporated as investors compete to get into hot deals first; venture firms are investing much more than they normally do; there are hyper-fast follow-on rounds; and more non-traditional investors are backing early-stage startups.

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Tomio Geron

Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. Before that, he worked as a staff writer at Forbes, covering social media and venture capital, and also edited the Midas List of top tech investors. He has also worked at newspapers covering crime, courts, health and other topics. He can be reached at tgeron@protocol.com or tgeron@protonmail.com.

People

Inside tech’s efforts to invest in Black banks

Tech companies are facing escalating calls to go beyond deposits.

Yelp is the latest company to announce it will be depositing $10 million across three Black-owned banks, including Carver in New York.

Photo: Mark Kauzlarich/Getty Images

Aaron Mitchell, the director of HR for Netflix Animation Studio, had already been working for months on a proposal to address the racial wealth gap when the killing of George Floyd rocked the country in May. Suddenly, it seemed like every company was coming out of the woodwork with pledges to invest and diversify and do better.

On May 27, Mitchell sent an email to Netflix CEO Reed Hastings asking him what he thought of a plan to invest $100 million in Black banks, a unique strategy to funnel more capital back into Black communities struggling amid the COVID-19 pandemic. At that point, no other corporation had made a similar public commitment. Mitchell said the $100 million was an arbitrary amount of money with symbolic significance: It was the same amount that Netflix spent on "House of Cards," a flashpoint in the company's history.

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Emily Birnbaum

Emily Birnbaum ( @birnbaum_e) is a tech policy reporter with Protocol. Her coverage focuses on the U.S. government's attempts to regulate one of the most powerful industries in the world, with a focus on antitrust, privacy and politics. Previously, she worked as a tech policy reporter with The Hill after spending several months as a breaking news reporter. She is a Bethesda, Maryland native and proud Kenyon College alumna.

People

Atlanta is the future for Black leaders in tech

"It takes so long for successes to emerge, and now we have a lot of results to point to."

Jewel Burks Solomon left Google for Atlanta; now, she's back with Google, helping Black startups.

Photo: Google for Startups

For more than a decade, Atlanta's leaders have liked to call the region "the tech capital of the South." This year, the tech industry is starting to see it the same way. VCs and companies like Google and Microsoft have recently made serious commitments to invest in the region, publicly acknowledging that the country's "Black mecca" is also the place where the industry can begin to fulfill its promises to create a more diverse, inclusive and innovative future.

It started in 2008, an unlikely beginning for a city's success story. The financial crisis devastated Atlanta just like every metropolitan area, but the disaster also laid bare untapped potential: Atlanta had the busiest airport in America; more Black college graduates than anywhere else in the country; practically limitless cheap land; the headquarters of Coca-Cola, Home Depot, UPS and a big chunk of Fortune 500 companies; friendly corporate tax and union policies; and the largest numerical population gains of any American city over the previous seven years. And so, when the country's richest and brightest turned their eyes to tech during the recovery from 2008, Atlanta's did the same.

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Anna Kramer

Anna Kramer is a reporter at Protocol (@ anna_c_kramer), where she helps write and produce Source Code, Protocol's daily newsletter. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.

Protocol | Enterprise

The man who brings the human touch to Google Cloud

A self-taught technologist with a storyteller's voice, Kelsey Hightower defied the enterprise tech sector's notorious diversity problems to become one of the industry's leading figures. Now he wants everyone's voice to be heard.

Kelsey Hightower, principal engineer at Google Cloud, seen in his natural habitat: talking cloud computing with attendees at KubeCon 2019.

Image: CNCF at KubeCon

Peter Idah had met Kelsey Hightower before. But this time, he brought his son.

It was March 2016, and the Kubernetes jamboree, KubeCon, was coming to Idah's hometown of London for the first time. Hightower, the de facto spokesperson for Kubernetes just as it was emerging as a force in enterprise tech, was speaking at the event.

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Tom Krazit

Tom Krazit ( @tomkrazit) is a senior reporter at Protocol, covering cloud computing and enterprise technology out of the Pacific Northwest. He has written and edited stories about the technology industry for almost two decades for publications such as IDG, CNET, paidContent, and GeekWire. He served as executive editor of Gigaom and Structure, and most recently produced a leading cloud computing newsletter called Mostly Cloudy.

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