Venture capitalists tend to invest in firms with preponderantly white male leadership, whereas women and people of color “remain in the waiting room,” according to Stephen lynch.
According to some united states lawmakers within the House monetary Services Committee, the lack of diversity within the financial technology space could be pain several companies’ bottom lines.
In a Thursday virtual hearing on “Combatting school Bro Culture,” U.S. lawmakers and witnesses discussed however ladies and other people of color were underrepresented in leadership positions within the monetary technology trade, including crypto discussed. Massachusetts Representative Stephen kill cited knowledge that solely a pair of of risk capital funding visited corporations within which the founders were ladies, while one|just one|only one} visited those with Black founders and 1.8% for Latinx.
According to kill and a few on the committee, this trend instructed an “old boys club” culture in firms as well as those involved cryptocurrencies, within which many of those in leadership positions were white men. They claimed that several firms ostensibly less deserving of funding were able to bring in cash more simply due partly to relationships between leadership.
“While lack of diversity may be a trend in virtually each trade that venture capitalists invest in, it's notably troubling within the fintech house,” said kill. “The largest fintechs, as well as digital banks, payment processors, and cryptocurrency suppliers, really market their products to ladies and other people of color. however after we check out the founders and leadership groups, they clearly don't mirror the communities that they claim to serve.”
“Multiple studies found that firms with diverse leadership, specifically with over one gender and/or one race, ar ethically representative, are additional innovative and create more money,” said California Representative Maxine Waters. “I assume that risk capital corporations are heavily profit driven, but it seems they’re ignoring clear data on the way to boost those profits.”
( Turner Wright, Cointelegraph, 2022 )