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Sequoia, Y Combinator And AZ16 Under Scrutiny In Congress Over ‘Tech Bro’ Culture


This coming Thursday in Congress, the Task Force On Financial Technology is holding a hearing titled “Combatting Tech Bro Culture: Understanding Obstacles to Investments in Diverse-Owned Fintechs”. With Sequoia and AZ16 headlining a recent investment in a firm ‘seeking to break down barriers between blockchains’ as reported by Forbes, it appears the next barriers to break down are between prospective women and minority tech entrepreneurs and funding from the venture capital industry.

According to a Committee Memorandum on the upcoming hearing, the majority of venture capital funding for fintechs is directed toward ‘White and male-founded companies’, while companies founded by women received only 2%, Black founders received only 1% and Latinx founders received only 1.8%, of total funding provided. The memo describes Sequoia, Y Combinator, and AZ16 as types of VC firms with different operational styles, and does say, “Some VC firms have made efforts to diversify their portfolios; however, critics have noted that these efforts have been mainly limited to “impact investment” portfolios that are often motivated by reputational pressure.”

Meanwhile, AZ 16 recently raised a whopping $4.5 billion to fund crypto and Web3 projects, which is remarkable considering the market conditions of the crypto market at this time. The memo does create the VC funds with their interest in funding tech startups, and it would seem a challenge to blame the industry for terms such as ‘tech bro’. Wired Magazine defined the term last year as, “…a species within the broader bro genus. Generic bro-ishness is properly understood as a form of performative male camaraderie, typically involving an ostentatious commitment to partying and a mildly ironic preppy aesthetic.” The concern of the Committee seems more directed at the potential for inherent biases that may be present where individuals tend to provide funding to those of similar race and sex.

In the memo, a glimpse into the breakdown of racial diversity in the VC workforce is provided. At the partnership level of VC firms, almost 80% are white, while only 4% are Hispanic and 3% are Black. Another figure in the memo displays how women are in the minority at VC firms as well.

Regardless of whether it is the tech bro culture itself or the VC culture and its funding procedures that is the problem Congress seeks to address, the witnesses at the single-panel hearing include Sallie Krawcheck, the CEO and Co-Founder of ‘Ellevest’, Marceau Michel, Founder of ‘Black Founders Matter’, Abbey Wemimo, Co-Founder and Co-CEO of ‘Esusu’ and Maryam Haque, Executive Director of ‘Venture Forward’. The hearing can be viewed at the link below starting at 12pm ET this coming Thursday.

HouseVirtual Hearing – Combatting Tech Bro Culture: Understanding Obstacles to Investments in Diverse-Owned Fintechs | U.S. House Committee on Financial Services

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