An Inconvenient Truth: Racial Bias in Venture Capitalism

Jillian Manus can be described in many ways, but a ‘one-trick pony’ isn’t one of them.

The savvy media executive, astute technology investor and serial entrepreneur is the Managing Partner at Structure Capital – a Silicon Valley-based venture capital firm that invests in early-stage companies. Its portfolio includes the likes of Uber and The Muse.

Jillian also sits on several boards of directors, including at the Nasdaq Entrepreneurial Center where she teaches leadership courses on developing skills for the future and “strengthening your inner game” as a founder.

Avid business and politics viewers may have seen Jillian’s trademark pithy and incisive commentary on CNBC’s Squawk Alley and Bloomberg Business News.

She recently co-founded and served as a mentor to the Entrepreneurial Center's Mentorship Circle program and her subject matter expertise was ‘delivering the perfect pitch.’

In our interview (which has been edited and condensed for clarity), Jillian discusses:

• Her motivation for co-creating the Mentorship Circle program with the Nasdaq Entrepreneurial Center;
• The role that social capital plays in successful entrepreneurial pursuits; and
• Her three-part plan for supporting Black founders in realizing their full potential.

Do you have (or have you had) a mentor(s) and, if so, what impact has this relationship(s) had on the trajectory of your professional life?

JM: No. If I did have a mentor, I probably wouldn’t have made so many mistakes!

Why did you decide to mentor at this time?

JM: I’ve been mentoring since I was in my 20s.

Many girls and women couldn’t find their voice, so I wanted to help them communicate. Firstly, by taking them under my wing and being their advocate and, secondly, instilling confidence in them to become their own advocate.

What attracted you to the Mentorship Circle program?

JM: The week of George Floyd’s murder, I reached out to everyone I knew in the Black community and talked about understanding what I didn’t know because, even though my heart was always open, my mind clearly wasn’t.

I didn’t understand the societal stressors that Black people face. I realized that I hadn’t made enough effort to stand up for Black founders, invest in them, understand their needs and how their needs differ from non-Black founders.

So, I reached out to the Nasdaq Entrepreneurial Center and said: ‘I’ve talked to many of our Black founders in our portfolio companies who said they don’t even feel invited into a room of investors, let alone welcome. They also don’t feel they can tap into opportunities to be hired. They were very direct.’ That’s how the Mentorship Circle program came about.

What are your expectations of a mentee?

JM: To become immersed in the program and be open to constructive criticism and understand that I’m trying to help them, not admonish them.

An entrepreneurial mentee is self-aware, constantly curious, and wants to improve themselves and their business. Products rarely fail, but people do. So, I work with mentees on their personal development, not just their product roadmaps.

What are the biggest obstacles facing Black founders and what is one thing that must be changed immediately?

JM: As a white female founder and venture capitalist, I know what it’s like to feel marginalized – to feel like you’re always asking a favor.

White female entrepreneurs constantly have to show that they understand math, data, go-to-market strategy. Let’s 10X that for their Black counterparts. But white women are invited into the room to present and ‘prove’ themselves while Black entrepreneurs don’t feel invited or that they even belong in the room.

Black female entrepreneurs receive one percent of VC funding, which is disgraceful. Racism is an insidious, systemic problem in our investment community and it must be stopped now.

I recently spoke to a group of Filipino women at a conference in Manila about how companies that drive values, such as diversity, into their culture outperform other companies. So, diversity isn’t just a social good. It’s smart business. We need diverse teams that represent the consumers who companies sell to. To create systemic change in our country, we must drive diversity into the core of our businesses.

How can we better support Black founders?

JM: I didn’t realize that many Black founders don’t have what I call ‘social capital,’ which is often the key to success.

I’m on the Board of Communities in Schools, which is the largest dropout prevention organization in the country, serving 1.9 million children in 23 states. Most of the children we work with are children of color and minorities. Their access to networks, or social capital, is one of their biggest challenges. Access to just one critical conversation or relationship can change the trajectory of these children’s lives and it can do the same for the lives of Black founders.

We can support Black founders, firstly, by helping them to access funding. Secondly, by opening up opportunities for them to gain the necessary operating skills by working at certain companies, so they can build their own companies. Thirdly, by building their social capital through introductions to people who will motivate and inspire them to reach their full potential.

What was your favorite moment of the program?

JM: That’s like asking me who my favorite child is!

But I have to say, my favorite part was when all the mentees were in conversation with each other and I was a fly on the wall. It was wonderful to see how they started helping each other. For example, one mentee might say to another, ‘Hey, maybe you can put your product on my site?’ or ‘Let me introduce you to so-and-so.’ It was the sense of community, the social capital, the mentees helping each other that gave me the most thrills.

What did you learn from your mentees?

JM: I learned about humility and that ‘no’ isn’t an option.

I also learned something else. At the end of the program, many of the founders didn’t want to participate in the pitch event in front of a VC panel. They said VCs were mean and didn’t understand them. So, I started to understand how VCs were being perceived and what Black founders meant when they said they didn’t feel invited into the room.

Many VCs are great, but there’s a subset that is nasty, have no empathy and no emotional intelligence. They don’t connect with the person, only the product and all they care about is the return – to themselves, not society. It really made me think about how I present to founders and how important it is for me to see them as people first before I see their products.

Did you reap any unexpected benefits or face any unexpected challenges and, if so, what were they?

JM: I now realize why I fell short in terms of supporting the Black community. It was humbling to understand what I was doing wrong as much as what I wasn’t doing at all.

How did the experience differ from any previous mentorship programs you may have been involved in?

JM: It was shorter and more nimble. For instance, we had the ability to add sessions if necessary, so there was more room for creativity and innovation.

What excites you most about this new class of founders?

JM: Their boundless energy and total perseverance.

Any final words of wisdom for your mentees (or entrepreneurs in general)?

JM: Gandhi said, ‘Be the change that you wish to see in the world.’

All the founders have the ability to not only build a company and create change, but to pass on their curiosity, innovation, skills and the depth of their empathy.

It’s critical that all this knowledge the founders gained creates a ripple effect. I’d like them to pass on every benefit they extracted from this program into their communities, so they become the social capital for others to tap into, they become the beacon of light and they become the ‘North Star’ of values. That’s what I hope they will become because I know they can be. I know they should be. And I know they want to be.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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