Why the venture capital world needs more female and minority entrepreneurs

Blog excerpt provided by Smart Business.

Written by Jerry Frantz, JumpStart Inc.

It may come as a surprise that just 3 percent of U.S. startups backed by venture capital are led by women. And only 1 percent are headed by African-Americans. In comparison, things aren’t much better at our nation’s largest biggest businesses, where there are only 20 female CEOs in the S&P 500 and five African American CEOs in the Fortune 500.

There’s no way around it. The venture space lacks diversity. Many theories have been put forth to explain this phenomenon. Perhaps it’s a limited access to strong educational opportunities for many African American youth. Maybe it’s the fact that societal dynamics and stereotypes still discourage so many young women from technical disciplines.

Or, is venture capital simply less connected to a diverse audience simply because of the fact that nearly 90 percent of current venture capital investment professionals are Caucasian men.

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Originally published June 1, 2016.