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Investing in Change

More than 700 CEOs and startup founders have joined Founders for Change, a movement that seeks to embrace and promote diversity in venture capitalism, and Olin alumni Maia Bittner and Ellen Chisa are among them.

Founders for Change kicked off mid-March, and in just a few short weeks, some heavy hitters such as Airbnb, Dropbox, Instagram, Pandora and Lyft signed on.

The way it works is pretty simple: Founders commit to combating sexism and racism by purposefully choosing to work with—and invest in—firms that include women, minorities and other underrepresented groups. The movement has been active on social media with people posting photos of themselves holding signs with the hashtag #foundersforchange.

The issue that Founders for Change hopes to address is that investment firms are often top heavy with white men. Currently, only 9 percent of VC decision-makers in the United States are women, and only 15 percent of funds go to companies with at least one female founder, according to All Raise, an organization that works to increase the number of founding and funding women in tech companies. The numbers are even more bleak for African-American, Hispanic and other underrepresented minorities.

“People who are historically rich are white guys, and they invest in products for white guys,” says Maia Bittner ’11, the founder of several companies including Rocksbox and Pinch. When that happens, she says, profitable exits—when the investor leaves the company, cashing out the return on investment—give traditional VC investors more money to invest in the future, perpetuating the status quo.

Bittner has had varying experiences in her quest for venture capital. While she’s been able to secure funding for her startups, she says it was harder to find investors for Rocksbox, a jewelry membership service.

“Rocksbox has two female founders, so we had that working against us,” Bittner says. “Also, it was a product for women. With angel funding, they’re not necessarily investing in the best business. Instead, they invest in their own interests.”

She suspects that’s why she had an easier time getting funding for Pinch, a company that helps renters improve their credit score. It didn’t hurt that her co-founder is a man, who just so happens to be another Olin alumnus Michael Ducker.

Ellen Chisa, the co-founder of Dark, which helps companies build apps more quickly and easily, agrees that sexism in the technical space is prevalent. She says she’s been mistaken for a recruiter rather than an engineer, and people often assume her business partner, Paul, is the CEO of the company, even though she is.

“I’ve gotten some of the classic comments—you’re too assertive or abrasive—and that’s frustrating,” Chisa says. “I’m being held to a bar that’s much higher.”

It’s not only important to get women and minorities into decision-making positions in order to fund different types of businesses. Bittner notes that having a variety of perspectives guiding the evolution of a company is invaluable. Chisa agrees that a range of viewpoints can play a big role in the success of any company.

“You want as many perspectives as possible because you’re focused on things that could go wrong, so you want to get as much information as possible,” Chisa says. “Diversity helps you build that broad base of knowledge.”

While diversity is important during recruiting, inclusiveness may be even more important when it comes to retention. Chisa stresses that building a company culture that supports all types of people—whether in meetings or at social activities outside the office—is crucial to keeping talented employees who may not fit the mold for typical technical startups. Bittner agrees.

“I think people will see they’re missing out because they don’t have a diverse team or don’t listen to them and trust them,” Bittner says. “I think companies that do are really going to reap the benefits, and that’s going to spread the message.”

Both women are investors themselves. They invest with Parcel B, a collective made up of Olin alumni who support Olin alumni-founded startups. Bittner particularly enjoys backing female founders and is an activator at SheEO, a lending model that supports women entrepreneurs. For the past three years, she has hosted a quarterly brunch called Series XX that connects women in the tech industry. As for Chisa, she is also an adviser at Flybridge Capital Partners.

Chisa and Bittner both say changes are already happening and more will come with time. With Founders for Change, startups are making it clear that firms need to have underrepresented groups at the capitalization table as stakeholders. 

“I try very hard to build the world I want to live in, and it’s problematic that only a small number of investors are underrepresented [people],” Chisa said. “I want to make sure we continue to build good things.”