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Laxman Pai, Opalesque Asia: Despite acknowledging the opportunities that companies founded by women and multicultural entrepreneurs present, a majority (60%) of the venture capitalists (VCs) surveyed by Morgan Stanley say that their portfolios hold too few of these companies.
An overwhelming majority (83%) say that they can prioritize investments in companies led by women and multicultural entrepreneurs and maximize returns.
The bank surveyed nearly 200 venture capital firms and diverse entrepreneurs on the lack of funding for women- and minority-owned businesses.
However, these sentiments haven't translated into actions. According to the VCs we surveyed, most VC firms aren't prioritizing strategies to diversify their portfolios.
When asked if incorporating more women and multicultural entrepreneurs is a firmwide priority, 3-in-5 investors say no.
Among the white male VCs we surveyed, 13% prioritize investments in multicultural founders and just one third (33%) prioritize investments in companies founded by women.
These percentages stand in stark contrast to the women and nonwhite male VCs surveyed, who are almost twice as likely as white male VCs to prioritize investments in diverse founders.
Even among investors who say that they prioritize investing in diverse entrepreneurs, their outdated methods of finding companies may be holding them back. These investors continue to rely on their traditional approach (e.g., connections withi...................... To view our full article Click here
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