At JumpStart, we strive to reflect the diversity of the communities we serve in the work we do. That’s because diversity is a powerful thing.
A recent study from the Boston Consulting Group found companies with diverse teams produced 19 percent more revenue due to increased innovation. Another famous study from McKinsey found companies in the highest quartile for ethnic/racial diversity were 35 percent more likely to have higher financial returns than companies in the lowest quartile.
These studies and many more point out the clear benefits of diversity. That’s why it’s so concerning to see the tech and innovation space continuing to struggle with this concept.
Estimates vary, but consensus shows more than three-quarters of all tech entrepreneurs nationwide are white. Meanwhile, only one percent of venture-backed tech founders are black, and 1.8 percent are Latinx.
Considering all we know about the economic advantages of diversity and inclusion, it’s really hard to process statistics like this. And, like many conversations about race, bias and systemic problems contribute to the challenge.
After so many years of living with these challenges, it would be easy for communities of color to conclude tech investors and advisors aren’t really interested in changing anything about the way they do business.
But I’ve found that’s not the case. On the contrary, many organizations I’ve spent time with want to change this reality. And we need it to change because the growth of young, innovative and diverse companies isn’t just a nice thing to have; it’s critical to our economic future.
So where do we start?
We’ve faced this issue right here at JumpStart, where we’ve launched VC funds dedicated to supporting women and people of color and worked hard to serve a more diverse client-base than the industry as a whole.
As the organization has grown into this work, it has also learned a great deal. We’ve grappled with the famous “pipeline question” long enough to understand that while there are Black and Brown tech entrepreneurs (or potential tech entrepreneurs) in our community looking for assistance, building the bridge between us takes time and effort.
A critical piece of this bridge-building effort is to forge deeper relationships with the organizations in our community who were founded specifically to advocate for communities of color. These long-standing organizations have strong historical ties to Black and Brown entrepreneurs but have not always found open doors into the innovation economy.
To me, they are ideal partners for one of my first initiatives as the new Chief Inclusion and Outreach Officer at JumpStart—a new take on the not-so-new idea of an Entrepreneur-in-Residence (EIR).
JumpStart and its partners in the Northeast Ohio Startup Network have leveraged EIR positions for many years with support from the Ohio Third Frontier, the state program which has been one of the largest funders of our entrepreneurial services work and recently awarded $33.7M to 14 collaborators across northern Ohio to provide services to tech entrepreneurs.
These EIRs are well-connected professionals who work as close advisors to growing startups. They assist with everything from business plans, go-to-market strategies and staffing to financial forecasting and fundraising.
In the past, our EIRs were employed separately by each individual organization in the network. Over time, we realized the collaborative benefits of pooling our resources to create a “shared EIR” who would split time between several different organizations.
This model is already working in our community. Heather Hall, an EIR focused on software and IT companies, splits her time and effort between four different organizations—JumpStart, Bounce, GLIDE and YBI.
With the support of Ohio Third Frontier, as well as Cuyahoga County and others, we’ve expanded on this idea, creating a new shared EIR position to act as a collaborative resource between JumpStart and four respected community organizations focused on supporting entrepreneurs of color—The Economic Community Development Institute (ECDI), The Hispanic Business Center, The Urban League of Greater Cleveland and The President’s Council.
This EIR will spend time with each of these organizations as a true neighborhood resource. They will connect ambitious entrepreneurs to regional business advisory resources and also provide direct technical assistance to these entrepreneurs to further their ideas.
I believe this EIR will help build deeper connections between these support organizations, so we can put the entrepreneur first and provide the most impactful help we can.
I’m excited to be part of this new project and grateful to be working with these community partners. Each of us shares a deep desire to close the gap in communities of color, but the issues we face are far too systemic for any one of us to tackle by ourselves.
Stronger partnerships are what will change the future. This is one small step forward, but I believe most big things begin with one small step.