On how investors can create a more diverse and equitable future: a conversation with Jarrid Tingle, co-founder of Harlem Capital
I spoke with Jarrid Tingle, co-founder and managing partner at Harlem Capital, a diversity focused venture capital fund on a mission to invest in 1K diverse founders over the next 20 years. Jarrid has been recognized as Forbes 30 under 30, HBCUvc 31 under 31, Business Insider Rising Star, EBONY Power 100, and Inc 30 under 30.
Jarrid shared his advice for building a diverse top of funnel, supporting diverse founders, and how investors can create change through their portfolio companies.
Capital is crucial.
Investment dollars are the most impactful way to level the playing field for diverse founders. Women and underrepresented groups represent 70% of the population but receive only 3% of venture capital. These diverse founders also have less existing wealth to bootstrap their company and less existing connections to find new capital. While the first check is hard to find, even after getting some capital, diverse founders still face greater challenges when raising their seed rounds.
To this end, venture capital needs diverse general partners. Much of venture capital decision making is based on pattern matching but this pattern matching is exclusive of diverse groups. Historical data on startups is predominantly based on white, male founders, which excludes diverse founders from being pattern matched as a successful company, especially in the eyes of non-diverse partnerships.
Even if you are a junior investor without check writing ability, you can still support diverse founders holistically, including through making introductions to other investors and opening up your network to diverse founders as well as providing actionable, tactical deck, pitch, and product feedback. Instead of telling a founder they are simply “too early,” give them constructive advice on how they can improve their product and go to market strategy to find more customers.
Within your firm, rigorously track how you make decisions from the sourcing top of funnel all the way through to the ultimate investment decision to identify where many diverse founders are written off so you can make your internal processes more inclusive.
You cannot manage what you do not measure.
Investors should benchmark salary and equity compensation across their portfolio companies and compare these to the market standards broken out by race and gender (Carta completed a study that found women receive less equity than men). Too often these metrics are not tracked, not benchmarked, or not comprehensively included (many times they track salary and not equity, where most of wealth creation in the startup world comes from). Investors must do better in continuously measuring these outcomes and finding solutions to address blatant gaps.
These changes must be championed first by the most senior partners at firms and by the limited partners of venture capital funds. Decisive stances, economic pressure, and actions from those in positions of leadership is crucial.
Transparency increases accessibility.
Make venture capital less opaque and show diverse that you are accessible. Be present on social media, include your email addresses on your website, demystify the pitch process, and clearly articulate what you are looking for.
Balance warm introductions with openness to cold outreach. At Harlem Capital, the team balances it approximately 50–50. While warm introductions can be helpful in filtering for quality, being open to cold outreach levels the playing field for those founders without an existing network.
Just in case relationship building is better than just in time.
Looking back on his journey with Harlem Capital, Jarrid underscores the importance of taking a long term approach (just in case) to relationship building rather than a transactional one (just in time).