VCs are leaving trillions on the table by bypassing diverse leaders, study says


This marketplace podcast is supported by pager duty in an always on world teams trust pager duty to help them deliver a perfect digital experience to their customers every time with pager duty t there's no question that limited partners have power in this equation to also move the needle with the distribution of capital two women and multiple public media this is marketplace tech demystifying the digital economy I'm Ali would Carla Harris is vice chairman of Global Wealth Management and head of multicultural client strategy at Morgan Stanley the M dot com if you could make trillions of dollars investing in more diverse founders why wouldn't you from American value of companies that have more women internally or the performance of women lead founders or the success is multicultural missing out on as much as four trillion dollars in value by not investing in more diverse founders trillion Carla Harris is vice chairman of especially when you're driven by returns I want to move up the money chain when you put out a report like this from Morgan Stanley are you speaking not just a venture capitalist must eighty percent of those men are white probably because ninety percent of venture capitalists are men mostly white but new data shows that BBC's are leaving a lot of money on the table by only investing in people who look like them Morgan Stanley put out new information just this week that says venture capital as an industry could be that's where the ultimately the change has to come from like if LP's Al- suddenly introduced you know diversity riders if every pension fund that was going to put some money into venture capital said entrepeneurship no question and you absolutely started to see some of that in the private equity industry where LP's calpers and Kosters certainly did we to invest more broadly but that doesn't make sense right well let's talk for a moment about how venture capital firms make money and why I suspect it is their investor that should be enough evidence right we should suddenly I'm sure that in the next year we will see a flood of new investment when multicultural founders right well things have been bumping along you know in fine form and there was nothing to counter that argument there was not necessarily a motivation on instigation to change it hey my pensioners want you to do the best you possibly can in that means investing broadly is that what it's GonNa take well I'll tell you I do think that that would be powerful double wealth management at Morgan Stanley and she says the numbers are getting hard to ignore I think in the last few years there's been a lot of data that has been released that talks about the entrepreneurs so now I think there's far more data out there that is supportive of the argument that in fact there is something to miss but I think stop me if you've heard this before ninety one percent of venture capital investment goes to men but also to their investors limited partners who arguably are the ones who are holding the purse strings we hope Somali part of what we're trying to do is to say not only are UVS's missing it but perhaps if you're missing it you may be leaving some money on the table for your limited partners and I wonder do you think and now some related links we've got a link to the latest Morgan Stanley data and the survey of two hundred venture capitalists released earlier this week over at our website could difference though I think the same could apply here that's very reasonable right the survey says that women earn seventy eight cents per dollar invested men only earned thirty one cents I won't necessarily say it would be a flood but I'll tell you we would be very happy to see that happen if this one report made that kind of difference in the industry we'll take that all day long eighth marketplace Tech Dot Org one interesting result of the survey data is that sixty percent NBC's say there aren't enough women or multicultural founders in their portfolio the Wall Street Journal tried to break it down a year or so ago but investors are putting tons of money into venture capital and private equity right now because stocks and bonds are kind of flattening out I would have to demand major change. VC firms make money by charging a fee for managing money that's about a two and a half percent of the amount they raise says apm this marketplace podcast is brought to you by entercom intercom what's more of the Nice people visiting your website to give you money so they took a little chat bubble in the corner Google's so that even if everyone is doing fine right now why not at least try to do better Matt Pretty and Stephanie Hughes Produced Marketplace Tech Jody on customer unity got forty five percent more loyal users with intercom in just twelve months go to intercom dot com slash podcast to start making money from real time chat

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