How we brought so many first-time investors into venture

Why is the world of investing so insular? That was one of the questions we thought about as we created Operator Collective, our new venture fund designed to give talented operators from diverse backgrounds a safe, comfortable way to join venture. It was a good idea, right? A respectable pursuit?

Yet as we spoke to our wide networks of operators – most of whom happened to be women – there was notable trepidation. We saw it beneath their poker faces. These confident, ultra-talented operators with an absurd amount of collective experience building, growing, and running the world’s top enterprise companies were intimidated by the thought of investing in venture capital. Few had invested before, and if this experienced, savvy bunch shied away from the opportunity, how could we ever expect to bridge this gap?

It’s no secret that venture capital has long been an industry dominated by white males. As we’ve noted, this isn’t necessarily because no one wants a change, but rather because there hasn’t been a natural way for it to happen. And considering the gender pay equity gap and “gap table,” there never would be a natural way for this to happen unless we made one. If we want different companies, we need different venture capitalists We needed a new model. 

1) What if our LPs invested on a sliding scale?
So we started by creating a sliding scale to invest in our Operator Collective Fund. 90% of our LPs are women and 40% are people of color; because so many of them began their operator careers before the Equal Pay movement took hold, they’ve lost out on thousands (or even millions) of salary dollars comparable to others in their industries. A sliding scale for LP investments allows these experienced leaders to join the venture ecosystem at a level they’re comfortable with.

2) And they want more active roles
Even the sliding scale wasn’t enough, though. Beyond the financial side of the equation, our LPs wanted more. They didn’t just want to throw their hard-earned money at founders – there’s certainly no sure return on that investment. No, they wanted to help them build. Get hands-on, answer questions, serve as a resource. They wanted to share their experiences and lessons learned to advance the next generation. Refreshing, isn’t it? 

3) All while learning and sharing together
So now we’ve got our sliding scale and hands-on opportunities, but we still needed one more component to create the perfect trifecta for LPs. And it came from right within our own community: education. Operator Collective also has an education component designed to increase our business and investing acumen. Our own LPs lead webinars and host Office Hours. They meet 1:1. They offer up their expertise to anyone looking. It’s deliciously selfless. 

Our holy trifecta: Sliding scale, hands-on help, and education
What we’ve ended up with is a new model for venture investing, one that’s intentional and unique. By assembling these talented operators, offering education and experiential knowledge, and sourcing new opportunities together, we hope to #RiseTheTide in venture capital and create an industry where
everyone looks like an investor.

 

We believe culture, diversity, and operational excellence are a key part of building truly great companies. Learn more at www.operatorcollective.com or by connecting with us on Twitter and LinkedIn