The Consumer Technology Association has been criticized in the past for falling short on diversity when it comes to keynote speakers at CES, the big tech trade show that takes place in Las Vegas each January.
But CTA, the lobby group that stages CES, has taken some of that criticism to heart, and it recently held an event related to diversity and inclusion in New York. To drive change in the way the tech sector supports entrepreneurs, the group announced it was investing in Harlem Capital Partners and SoGal Ventures as part of CTA’s $10 million commitment to venture firms and funds that invest in diverse and underrepresented entrepreneurs.
I interviewed Tiffany Moore, senior vice president of political and industry affairs at CTA, about the need for equal access to venture funding and its potential impact across the tech sector.
Harlem Capital Partners is a New York-based minority-owned early stage venture capital firm with a mission to change the face of entrepreneurship by investing in 1,000 diverse founders over the next 20 years. SoGal Ventures is the first female-led millennial venture capital firm and invests in early stage diverse founding teams in the U.S. and Asia.
Here’s an edited transcript of our interview.
VentureBeat: What’s the backstory here? How far back does this go for you?
Tiffany Moore: It goes probably to the middle of last year. We have some incredible leaders on our board, and we had a talk around what difference CTA could make in this space. Initially we were brought an idea to directly support women and diverse startup founders. We thought about that in our role as a trade association. What was our best role? We’re good at putting on a show, and we’re great at advocacy and research, but doing due diligence on which startups to invest in was probably not a good space for us.
We thought we would take a step back. There’s an incredible ecosystem of venture funds that are dedicated to investing in women and diverse founders. I firmly believe in partnerships and finding like-minded organizations and building something greater together. That was the decision-making with our board. Given the dearth of funding for women and diverse entrepreneurs, our leadership here at CTA—we don’t want to miss out on the next innovation because a woman’s startup couldn’t get funding. So how can we contribute to seed that kind of investment portfolio?
That’s how we arrived at making the announcement, that we would invest $10 million in venture firms and funds that invest with women and people of color.
VentureBeat: Before this period, the CTA caught some flak for not having enough women keynote speakers. That seemed to set up an environment where people were talking about this issue more.
Moore: From the past, it created an opportunity for us to take an inventory of what we were doing as an association and as an industry. Making sure that we were contributing to solutions, particularly in the venture space, to make sure that we didn’t miss out on that next innovation because a woman founder couldn’t get access to funding. It’s part of a broader conversation about what the tech industry is doing to pursue greater diversity. We wanted to make sure that in everything we do at CTA, that we represent the best talent within the tech ecosystem, and more broadly.
VentureBeat: How long had the CTA been doing investments? That didn’t seem like the usual set of tasks you guys pursue.
Moore: This is our first foray into venture funding. One of the things I do appreciate about CTA and our board is that we can be pretty nimble. This is not something we have prior experience with. Obviously, with any organization you do investing, but the venture world is something that was new to us, and that we felt strongly about. Allocating $10 million to focus exclusively on this is not something we’ve done since we founded the CTA Foundation some years ago, which is focused on tech for senior populations and the accessibility community. This is definitely something groundbreaking for CTA.
VentureBeat: Was there any worry that you might be accused of playing favorites, as an association that’s supposed to represent the industry?
Moore: I think that’s one of the reasons why we decided not to directly invest in startups. We do represent more than 2,000 companies. We didn’t want to be in a position where we were picking certain companies over others. Again, that’s why we arrived at supporting venture firms that invest in women and diverse founders as part of their investment thesis.
VentureBeat: Was there a lot to choose from as far as venture firms, or is it relatively new for them as well?
Moore: I’ve been overwhelmed by the number of venture firms that have reached out to us. We’ve heard, at last count, from about 75 different firms that have reached out to us and completed our questionnaire. I’ve had dozens of calls from firms and funds that want to learn more about what CTA is doing. Every phone call I come away with a greater inspiration that we’re seeding that ecosystem for entrepreneurs. I’ve had two calls this week already with venture funds who are equally passionate about making sure that women and diverse entrepreneurs have access to funding.
We’ve done numerous roundtables. We did one a couple of weeks ago on Capitol Hill where we were able to convene women and diverse entrepreneurs, but also venture funds and ecosystem builders, to make sure that we’re trying to create the best solutions to make sure that women and diverse entrepreneurs have access to capital.
VentureBeat: What was the basic argument, or perhaps the winning argument, for taking action here?
Moore: I wouldn’t say it was a winning argument. I think our board recognized—they all come from great companies and venture firms themselves. They understand the importance of access to capital. If we truly want to create the best ecosystem, which is important to us as a country and as an industry, then we need to be willing to put some effort behind that, some dollars behind that. We thought this was the best way for us to contribute.
I always say, to everyone that I talk to, that this is an investment. It’s not a charitable contribution. We want to make sure that there’s an understanding within the larger venture industry that investing in women and diverse entrepreneurs is an important investment thesis that is profitable and viable.
VentureBeat: When you think about the amount, in some ways it’s very big for an association, but in the venture world it’s a smaller amount of money. Do you think you can help to get larger funds to dedicate more money as well, given that this is an industry of billions of dollars?
Moore: We would love to serve as an example. One of the things we’re excited about is that some of the funds we’ve chosen, or will be announcing in the future, are focused on early stage. It’s about getting that early first touch. Usually that’s a smaller dollar amount. If you look at entrepreneurs who are trying to bootstrap, a lot of them already have a full-time job while they’re trying to build their company. It’s those smaller checks that are more important in the beginning. We’re happy that we’re able to help in that regard.
But we’d definitely love to serve as a catalyst for other organizations that are similarly situated, and also to the larger venture community. This is a worthwhile investment. In our conversations, we talk to firms that are specifically focused on women and diverse entrepreneurs. But we’ve also talked to larger funds who want to know what we’re doing, who want to understand what our investment thesis is and how we’re investing our dollars. We’re excited to serve as a rallying point for discussion at those larger funds, to consider making sure that their portfolio isn’t missing out on the next innovation.
VentureBeat: As far as the number of women and minority-owned startups out there that are seeking funding, are you finding that there are lots of them out there?
Moore: Oh, yes, definitely. One of the most important things within the diversity space is to move with intention in broadening the network. Our CEO has talked about this. If you’re a venture fund, you’re typically going to go to your friends. If your friends all went to Harvard or whatever Ivy League school—some people don’t have access to that network. It’s all about being intentional. If you look, they’re not hard to find. There are incredible startups founded by women and people of color who just may not have access to these networks, which tend to be a little clubby. So how can we break that paradigm and create more opportunities to be intentional and expand that network? We’re supporting venture firms that are committed to doing that.
VentureBeat: Have you gotten any other interesting reaction from the folks who know CTA well?
Moore: Every response has been positive. We’ve had other organizations that are similarly situated to CTA ask us, “How did you get that started? What was your process?” To your earlier point, I think people are looking at this as an opportunity. There are so many different ways to support and focus on diversity. Investment is a great opportunity that we found here at CTA, and it’s one of many things we’re focusing on as we build our diversity portfolio.
VentureBeat: Are you prepared for headlines about the CTA investing in sex toys, stuff like that?
Moore: Again, one of the important things we’re doing is we’re taking a step back. We’re investing in venture funds and firms, not directly into startups. We want to make sure that we’re supporting great venture firms that are focused on women and diverse entrepreneurs, whatever other focus they have.
VentureBeat: Does the investment have a time range to it?
Moore: We’re doing things on a rolling basis. You’ll probably hear some additional announcements in the next couple of weeks or so. But we don’t have to spend it all immediately. We continue to talk with startups and meet with venture firms. Our investment staff and team are devoted to this. We continue to have conference calls with different venture firms. We’ll continue to do it on a rolling basis, looking at what makes the most sense and what makes for the best partnerships with some of these funds.
VentureBeat: How big of a staff is supporting this effort?
Moore: Different aspects of CTA are supporting this. There’s industry affairs, which includes our diversity initiative. Our COO is very engaged. Our CEO is engaged. We also have an investment subcommittee made up of CTA member companies who are experts in their fields, whether it’s in VC or startups or understanding the tech ecosystem and where it needs to be in the future as far as innovation.
VentureBeat: Have you made some initial investments already?
Moore: We did announce, at our media lunch last month, that our first two partnerships are Harlem Capital Partners and SoGal Ventures. Again, you’ll be hearing more about developments in the next couple of weeks to a month.
VentureBeat: Why did you choose those two as your first?
Moore: The individuals who are part of Harlem Capital and SoGal Ventures are incredibly focused. They are passionate. Their investment theses match what we’re trying to do with CTA. Harlem Capital Partners has been able to leverage an incredible investment community, whether it’s in New York or across United States. They have a unique value proposition given their background in finance. They can provide startups with the necessary venture aid and support to run their companies.
SoGal Ventures is a diverse millennial fund. They have an incredible network not just in the U.S., but overseas, that helps them find great women entrepreneurs. Again, they’re very clear and focused about what they’re trying to accomplish. We see these as incredible funds that are focused on women and diverse entrepreneurs, and we couldn’t be more excited to have them as some of our first partners.
VentureBeat: As far as regions go, do you notice anything about that when you look at women and minority startups, whether they tend to be in Silicon Valley or elsewhere around the country?
Moore: They’re all across the country. We don’t want to suggest that innovation can only come from California and New York. I’m from Detroit, and we have great things going on there. I was talking to some folks in Chicago not too long ago. It’s all across the country. If the funds are all focused on California, they’re missing out on the incredible excitement and entrepreneurship that’s going on in the middle. We want to make sure that when funds are looking at different startups and entrepreneurs, they’re not limiting themselves.
VentureBeat: I know that a lot of large corporations have people like chief diversity officers. Are they the kind of people that can help you with leads or information when it comes to doing this work?
Moore: We rely heavily on our member companies and the talent within them to provide us with ideas and support. We’ve had incredible and consistent feedback from our member companies as far as their interest in what we’re doing. Some of our member companies have their own venture arms, like Intel and Google, and they’re doing incredible work focusing on non-traditional startups and entrepreneurs. It’s great to see those kinds of initiatives happening.