Seven venture capital and startup organizations focused on diversity within tech announced the Diversity Data Alliancea commitment to standardizing how data is collected and shared.
Data transparency remains a pressing business issue for people who want to better track where and to whom money is being allocated. Many companies already privately collect information about their founders, but that data can be distorted when shared publicly without knowing how the data was collected.
The Alliance hopes to simplify this process by creating a framework that companies can use to gather information about founders and funders. He also hopes to work on creating a centralized data pool to better track and understand funding trends in the industry. This is especially important for marginalized founders, who still receive little to no venture funding.
The Alliance told TechCrunch that it hopes to examine this data to find ways that could help increase capital allocation to underrepresented founders, with the intention of publishing a report with centralized data. It creates privacy and security measures, in addition to raising money for a database that can store this information.
Organizations that have signed up to the Diverse Data Alliance so far are All Raise, Diversity VC, BLCK VC, StartOut, 2Gether-International, Vets in Tech and Somos VC, although more may participate. The team began working on the standardization process last fall and began implementing it this spring.
“Each of us has tried to do this on a small scale and with extremely limited resources,” said Sarah Millar, COO of Diversity VC and founding member of the Diversity Data Alliance. “By focusing our data collection and analysis efforts on this specific piece, we can spend more time on programming and projects that are proven to move the needle for our communities.”
The standard data collection process will ensure that all companies use the same optional contact form for all founders. This means asking the same five questions about basic information, such as knowing a founder’s name, preferred pronouns, email, location, and LinkedIn link. Companies will also ask the same questions about race, asking founders to check what they identify with and asking them to simply select their date of birth. It will ask a founder what gender they identify with, sexual orientation, education, disability status and military affiliation.
Until now, companies have been asking similar but completely different questions. For example, some companies did not ask questions about disability status or race and gender, and others used more elaborate language about race or gender than others, such as asking if a founder was Middle Eastern.
The Diversity Data Alliance is the latest effort within the enterprise to push for more data transparency. Next year, California is set to implement a law requiring companies operating in the state to report a demographic breakdown of the founders they invest in, with the goal of better understanding the haves and have-nots in the funding world. The Alliance said it is in contact with lawmakers working on the California bill and hopes to share insights as both versions continue.
The Alliance hopes other companies and organizations will sign up to join the data collective.
“We can’t change what we don’t measure,” Paige Hendrix Buckner, CEO of All Raise, told TechCrunch. “By collecting uniform demographic data, we can gain a deeper understanding of the entrepreneurial and startup ecosystem landscape to ultimately drive greater transparency and powerful storytelling about the characteristics of thriving venture capitalists and rising stars in our industry.”
This story has been updated to reflect that the companies were nonprofits and organizations.
