AmpEquity Speaker Series with Freada Kapor Klein: Closing Gaps in Venture Capital & Tech
On February 17, 2021, Berkeley alum, Freada Kapor Klein, joined the Center for Equity, Gender, and Leadership’s AmpEquity Speaker Series to discuss the gap-closing thesis of Kapor Capital and its impact on communities of color. Klein’s upbringing in a family with a strong cultural jewish identity exposed her to hardships that made her a firm believer that “none of us are free until all of us are free.” This mindset has guided her life’s work where she has dedicated her career to addressing barriers and uplifting marginalized people. She is an entrepreneur, activist, and pioneer in the field of organizational culture and diversity. As a Founding Partner at Kapor Capital, Freada invests in seed stage tech startups that create positive social impact by closing gaps of access, opportunity, or outcome for low income communities and communities of color.
The current state of venture capital is overwhelmingly white. According to Klein’s data, 80% of investment partners at venture capital firms are white and 77% of all Seed and Series A rounds were raised by startups with zero ethnically diverse founders. Although more women have become venture capital partners in recent years, the numbers for Black and Latinx women founders and partners remain miniscule. The Oakland based philanthropic arm of Kapor Capital, Kapor Center, ultimately seeks to build and diversify this tech ecosystem through studies, legislation, and entrepreneurship resource events.
Kapor Capital has dedicated the last 10 years to gap-closing impact investing and has made over 178 investments with 59% of their portfolio founders being women and underrepresented people of color (UPOC). Critics have argued that investing in these groups is limiting, however, Kapor Capital has proven that it is highly profitable. They’ve pulled in an internal rate of return of 29.02% and have beat out competitors in the 75th percentile. Investing in inclusion shows to be highly profitable and beneficial to the communities that need it most.
Kapor Capital has stayed true to its Founder Commitment to investing in diverse and inclusive start-ups who stay true to this mission. Klein emphasized this, “We are serious about not putting our time and effort and reputation into helping gap-widening businesses” and demonstrating the ways in which they support their founders. Through a four-step support framework of goals, invest, volunteer, and educate all centered on DEI initiatives, Kapor Capital keeps their founders’ committed and focused on their impact. The Kapor Capital approach according to Klein is “not just the demographics of the founders, but who benefits from this if the business succeeds.”
According to Klein, exposure is crucial to ensuring diverse innovators have a path to success. From exposing high school students to venture capital careers, to getting involved in pitch competitions, these experiences provide valuable skills to budding entrepreneurs and future investors. Kapor Capital aims to create more space for these diverse investors through their summer associate program. This paid internship experience provides underrepresented students of color with the venture capital experience needed to help them break into the impact investing industry and diversify vc boards.
Kapor Capital embodies the spirit and actions of investing in equity. They are living proof that investing in diversity is profitable in many ways beyond monetary value. Their commitment to helping UPOC and upholding expectations of inclusivity gives us something to look forward to in the future of entrepreneurship and venture capital. We can all learn from Kapor Capital and actively contribute to gap-closing missions that create a more inclusive and representative world.