Seven ventures and organizations focused on diversity within technology have announced the Diversity Data Alliance, an effort to standardize the way data is collected and shared.
Data transparency remains a pressing issue within venture firms for those who want to better track where and to whom their funds are being allocated. Many companies already compile background information about their founders privately, but without insight into how the data was collected, that data can be distorted when shared publicly. .
The alliance hopes to simplify this process by creating a framework that companies can use to collect information about their founders and funders. We also hope to work to create a centralized data pool to better track and understand industry funding trends. This is especially important for marginalized founders who still receive little or no venture funding.
The alliance told TechCrunch it wants to review this data to find ways to help increase capital allocation to underrepresented founders and plans to release a report with the centralized data. Told. In addition to funding a database that can store this information, we are building privacy and security measures.
Companies and organizations that have signed on to the Diversity Data Alliance so far include All Raise, Diversity BC, BLCK VC, and Somos VC, with more companies and organizations likely to join. The group began working on the standardization process last fall and began implementation this spring.
“Each of us has tried to do this on a small scale, with very limited resources,” said Sarah Miller, COO of Diversity VC and founding member of the Diversity Data Alliance. states. “By focusing our efforts on data collection and analysis on this specific area, we can spend more time on programming and projects that clearly make a big difference in our community.”
A standard data collection process ensures that all companies use the same optional contact capture forms for all founders. This means asking her the same five questions about basic information such as the founder's name, preferred pronouns, email, location, and LinkedIn link. Companies ask similar questions about race, asking founders to confirm who they are and simply selecting their date of birth. Founders are asked about their gender identity, sexual orientation, educational background, disability, and military affiliation.
In the past, companies have been asking similar but very different questions. For example, some companies did not ask about disability at all; others used more detailed language about race and gender than others, such as asking if the founder was from the Middle East; However, some companies did not have the option to check it. Totally off.
The Diversity Data Alliance is the latest effort within the venture to increase data transparency. Next year, California will require companies operating in the state to report on the demographic breakdown of the founders they invest in, with the goal of better understanding the haves and have-nots in the world of fundraising. We plan to enact a law requiring this. The alliance said it is in contact with lawmakers working on California's bill and hopes to share findings as both developments progress.
The Alliance expects other companies and organizations to sign on and join the data aggregation.
“You can't change what you don't measure,” All Raise CEO Paige Hendrix-Buckner told TechCrunch. “By uniformly collecting demographic data, we can gain a deeper understanding of the state of the venture and startup ecosystem, ultimately increasing transparency and increasing the visibility of venture capitalists and rising stars in the industry. We can drive powerful storytelling around features.”