Space Capital is dedicated to advancing diversity and racial equality and we will continue to take steps to do so. As a company, we condemn racism in any form. We value diversity and have no tolerance for discrimination. We are advocates and allies in the fight for equality. Given the ongoing problem of systemic racial injustice, this statement by our firm last month was necessary, but not sufficient. We must commit to addressing this issue and make it a priority. The moment to create intentional racial equity in venture capital is now and to do that, we need to first look at ourselves.
To-date, Space Capital has had 10 full-time employees and five interns: 7% Black, 7% Middle Eastern, 13% Latinx, 13% East Asian, 13% South Asian, and 47% White; while 7% have identified as non-binary, 43% as She/her, and 50% as Him/he. We strongly believe that diversity makes us a stronger firm and, while we still have work to do, we continuously strive for diversity of backgrounds, cultures, and experiences on our team. This belief is backed up by empirical evidence, which shows that homogenous team constructions negatively impact deal flow and decision-making capabilities, which ultimately contribute to sub-standard returns.
We currently have an open Associate position on our team and of the hundreds of applications we’ve received over the past few weeks: 4% Latinx, 5% Black, 13% East Asian, 16% South Asian, 39% White; also just 19% were women. While our team construction is more diverse than the talent pool available to us, this is clearly not reflective of our populus, nor the diversity we strive for, so it seems that interventions are needed earlier in the process, to get more underrepresented candidates applying.
Space Capital Team
As a team, here are some of the practical examples we came up to help bridge the talent gap:
- Continue to support the Brooke Owens Fellowship, as we have for the past three years, whose mission is to provide a career boost to young women and gender minorities in the space industry
- Continue the Space Angels internship program, but placing a greater emphasis on inclusion by broadening our search to a broader spectrum of schools
Next, we took a look at our investment portfolio to determine the demographics of the 32 founder/ceos that we’ve backed: Embarrassingly, we have yet to invest in a Black founder/CEO. Just 15% of our portfolio companies (7% of our total capital deployed) are led by female founders/ceos; and just 21% of our portfolio companies (10% of our total capital deployed) are led by other underrepresented founders/ceos.
There is clearly an issue here, but in order to address it, we first needed to understand the root cause. Is the lack of applicants from underrepresented groups due to external factors, or if this is due to an internal bias? Determining this will help us to plot our best course of action. So, we ran the numbers:
Over the past 18 months, we have evaluated 1,090 space companies for investment. Of these, we were able to find demographic information for 906 founders: 2% Black, 2% Latinx, 7% East Asian, 9% South Asian, and 78% White; also 8% women and 92% men.
Space Capital Portfolio
While we are doing slightly better than our pipeline with regards to founder pronouns, we are slightly worse than our pipeline with regards to ethnicities. Clearly, there is more that we can do as a firm when evaluating opportunities, but there is a larger problem here: that our pipeline is overwhelmingly white and male. This data indicates that the primary cause for racial inequity in our portfolio is due to external factors. We are not receiving funding applications from underrepresented groups and earlier intervention is needed. So, as a team, we’ve identified practical opportunities to get involved earlier in the process to help close that gap:
- When proactively reaching out to companies to invest in, we will be mindful of building a more inclusive search
- When declining applications for funding, we will provide resources to help them grow, with the hope that they return to us when they're ready
- We will continue to support FIRST robotics, and similar organizations, to foster youth engagement in STEM fields
- We will develop new partnerships with organizations focused on underrepresented groups like National Society of Black Engineers
- We will soon be launching tools to create businesses based on space-data and we will proactively reach out to underrepresented organizations and schools to be part of it
- As a sector-focused fund we produce a lot of industry-specific content and we will be more inclusive in the stories we tell
- We will continue to work with partners like SEDS (Students for the Exploration and Development of Space) to develop fellowships, hackathons, scholarships, mentorship, and practical experience to provide access to space; curate 10-20 programs that create different pathways in to this industry
- We will proactively engage with other venture capital funds that are focused on investing in underrepresented founders
- We will proactively engage with organizations like The Board List (women), Athena Alliance (women), ELC (Black execs) to help fill open leadership roles at our portfolio companies
- We will further leverage Space Talent to make career opportunities in the Space economy more accessible to underrepresented communities by providing tools for recent graduates, job seekers, and founders looking to start a company