 I wanted to let's introduce our speakers here and our guests, Malvika Bagwat leads the portfolio services and partners at Owl Capital, Owl Ventures, sorry, and has more than 50 portfolio companies that she's watching on impact outcomes and objectives before Owl, she was at the Emerson Collective and led their impact efforts on portfolio ed tech companies and a long history before that which maybe you can tell us about including working across the US, the Gulf, in India and in low income communities here as well. So welcome Malvika. And Norme Kedena is the managing partner of Supply Change Capital which is a venture firm investing in early-stage food tech and I think has more than 75 companies. I wasn't sure whether that was all at Supply Change. And beyond. And beyond, okay. And you spent a decade as an aerospace engineer? Yeah. So rocket science. And Stephen DeBerry, an old friend is the founder of Bronze, a venture fund investing across social economic, moving from disparity to prosperity I think is the word. And probably you've seen Stephen's TED talk on Eastside. How many of you have seen that? It's well worth watching. It's got like what, 1.6 million views or some astronomical numbers. So congrats on that. Thank you. So let's see who you guys are. What role do you play in your or what role do you play sort of in the ecosystem? How many entrepreneurs here? How many like investors, you know, in firms? How many sort of other intermediaries and sort of call out what those intermediaries are? To say like what? Capacity builder. Capacity builder. Great. Others? Say again? DEI. DEI consulting. Perfect. More? Impact measurement. Somebody over here said something. Evaluation. Okay. Great. And how many LPs or asset allocators? Okay. There's a few here. More than a few. Great. So now here's the trick question. How many people think their own organization does a good job on DEI? All right. Keeps sort of count of how many hands. How many people think everybody else's organizations do a good job on DEI? Almost none, right? So okay. So you all can help teach them. All right. So the title of this is from what is the title? The title is DEI Done Well. But, you know, we're trying to figure out what that really meant. And I sort of put it in the brief the other day, an impact alpha from DEI to equitable wealth building to shared prosperity. So the promise is that, you know, it actually tracks to impact on the ground and in communities. The folks who organized the DEI track here at SoCAP promised kind of honest self-criticism, including among impact investors on all of this. And also actionable practices. So we want to give you, hopefully we'll have some takeaways that you can take to your own organizations that are already doing it well and also take to other organizations. And the context as probably known is that, you know, post George Floyd pledges have been, say, partially fulfilled. And at the same time DEI has kind of become a lightning rod for the backlash against ESG more generally and more broadly. And so there's kind of a moment here where there's kind of a reset or a rebirth maybe of what actually works. And I think it's become clear to us that impact alpha and probably to all of you as well that race kind of is implicated in all of ESG and beyond. And it can't really be extracted from that. So, you know, it's kind of important to get this right. So, Steven, let's start with you. Just kind of give us a little level set of where we're at and kind of why this sort of set of practices come to be called DEI are important. Yeah. First of all, thanks for having me. I'm really glad to be here. And I want to start by setting some context, which is that I'm here now after declining several offers to be part of this conversation specifically here at SoCAP. And that's because I have a very long arc with SoCAP. I was at the very first conference I've seen basically all the undulations over time. And there was a session not unlike this one about DEI. This is long, long, long before George Floyd moment. And I was as was often the case then like the person of color in the conversation. And of course they went to me and said, well, what are you going to do about this DEI situation? And that's when I just said, nothing. I'm not going to do a damn thing. The question is what are you going to do the rest of the audience? And so I've been a supportive observer since then. But I'm back now because I think at least in some way we've come full circle. And I do credit it partially with the George Floyd moment, but I also do credit it partially with the work of this community. And I think where we are collectively today is an emblem of the distance that we've traveled over time. So I just want to start out by setting that positive note. And so I think you look around like this is what our progress looks like. I think that's a good place to start. And it's why I'm here. The question though remains the same. Like why are we having this conversation? Why are we even talking about DEI? And I think there are at least a couple of reasons why. And lots of the experts and consultants and others in the audience on our panel could fill this out. But I would offer at least two. One is just the fairness, moral, other imperatives on that dimension where we have just, as David talked about in the intro, I'm very focused on moving structural disparity to prosperity. And we know there have just been structural disparities as it relates to the workforce, business, the economy, et cetera. And so those are things that must be addressed. And those structural disparities have been architected along the lines of race and gender and income, et cetera. And so those are mechanical things that we know that can and should be fixed. So that's part of the central reason to have this discussion. But the other is, you know, we live in a country where we rely on economic growth. This is the fuel for the goodness of our society, part of it. And we're leaving so much of that fuel unused by not employing all of us to do the work that needs to be done. Like it's just common sense at the end of the day. And so as we're on this journey together to become more conscious of where these disparities exist and how they are formed and maintained, it's really an opportunity to find more opportunities to harvest the goodness out of what's currently laying fallow. Terrific. So you all have funds, you all are investors, you all are working with portfolio companies. Can you take it down to like how DEI practices change? Like who, what, where gets funded? Norma, I know you were the co-founder of Latinx VC, thinking about this sort of more broadly. Like, why does it matter actually, like who the fund managers are? That's a good question. And I think, David, I'll take it back to the, I think it's important to share the pivot, my pivot from engineering to venture and where that came from. I did spend 12 years in the aerospace business and I graduated business school at a time when STEM, science, tech, engineering and math, was having a day. And I was working for a big company that looked at STEM and this idea of DEI as an opportunity to fill the pipeline and really think about entry level. So if we're doing K to 12 outreach, we're doing STEM and we're diversifying our pipeline. And there was not a lot of attention to the people who were already in the company. And so we kept saying, hey, we're already here, right? We don't need to be onboarded, we're already here. What are we doing to grow at the middle and executive levels? And so that was one of, you know, one of the, one of the, the inflection points for me to think about venture. And I think venture has had its own progression in much the same way over the last few years where we can look at data and say, yes, diversity yields better results. So let's hire an associate. Diversity yields better results. So let's hire an intern. Let's bring in an analyst to look at deals. And we glorify the pipeline, but we're not tracking how the pipeline leaks to who actually gets funded. And so what I saw happening in the corporate sector is very similar to what was happening in VC, which moved me to then say, I care about ownership, right? I care about who's owning these companies and who has the authority and the power to make the decisions. I don't want to hire diverse teams. I want to hire, you know, diverse cap tables. And those are the folks I want to fund. And so Latinx VC, David, to your point, is an organization that is really thinking about the ecosystem of Latino funders and founders and, and, and growing it. So growing founders who get funded, growing GPs who build out their own firms and then certainly growing out the ecosystem beyond that. And that's, that's my, that's my view on DEI and why I think the, the ownership piece is key and important. When I got into venture in 2015, I could count the number of Latina partners on two hands. Now we could probably count them on all our hands, right? So it's been eight years and there's been a lot of growth, but it's not, it's not exponential growth. It hasn't been, we've yet to reach the big J-curve. I'll be good. In our prep call, you talked about in the sort of education and ed tech world that it matters to students whether they're kind of reflected back in the, in the tools and the teachers and whatnot. Just, how do you think about that in sort of managing a portfolio? Yeah, happy to jump in. So just as context, Alventures is the largest ed tech focused VC fund globally. So we invest only in ed tech companies across K-12, post-secondary and workforce, but on a global context. And I think what he said is a hundred percent why we focus on DEI in two different buckets, right? So one, we think about students at the end of the day and the, and there's tons of research on this. Students need to see themselves reflected in the educators that are teaching them. And by extension, the folks that are building products for these students need to also come from diverse backgrounds, diverse mindsets. Otherwise the diversity is just not going to get reflected in the ed tech that we're putting out into the world. And so for us, when we think about DEI, we think about it in two buckets and we publish a report every year. The new one's going to come out next week. So you're welcome to go see it. But one is that the founders at the company level. So at the company level, we look at founder data, board member data, as well as C-suite leadership data. And that's much to your point about who's owning and making these decisions. So we don't really track staff member data as much at our portfolio companies just because we know we're probably going to have lesser impact on some of those hiring decisions compared to the next C-suite member that's going to come in or the next board member that's going to get appointed. And we have initiatives which I'm happy to talk about separately. But then we also track DEI data in terms of what audience our portfolio companies is serving, not just in terms of scale, but also title one students, ELL students, free and reduced lunch populations, students of color, learners of color, gender, all these different metrics, wherever possible. Because while in the U.S. context, race is certainly front and center. When you take the same conversation to Asia or to Latin, or any other parts, gender becomes front and center, or religion becomes front and center, the different metrics that matter. And so we extrapolate what DEI looks like in different contexts and then track qualitative and quantitative metrics across the spectrum. Sure, go ahead. I really want to point to something that Malika is talking about, because I'm not sure that it translates for everyone, but it's really important. And that is the way that diversity of teams, and particularly product teams, flows through to product experience and the impact that it has on folks. I just want to share an example that has nothing to do with impact, but it just illustrates the product point. So I have this really cool watch here. It is a Garmin watch. It has all sorts of fancy, like, you know, smarts in it. It is pretty cool. Yeah, like, it has all this data and everything, really cool. It's a dive watch. And so one of the things, it can do two things that are really cool. One is, I'm a diver. When I dive, it'll tell me how much air is left in my tank. It also... So you want it to be accurate. You want it to be accurate, right? It also measures O2Sat, oxygen saturation. So during the pandemic, a watch like this was very useful in signaling if someone had COVID, because when you have COVID, your oxygen saturation goes down. Now, the thing is, this watch is inaccurate for me because I have brown skin. So my O2Sat readings aren't like everyone else's. I was okay when I was on land. I was able to go get the little finger O2Sat and work around it. But to your point, David, I was just diving the other day with this watch and thinking, like, wait a minute. I am, you know, however many feet under the water, under pressure, I don't have the option to just go straight up. I got to be down here and I was getting low on my air. And I was looking at my watch. And I realized that I can't rely on this thing to save my life. And to lift Malika's point, that's an example of the kind of problem that goes unaddressed when you don't have diverse teams. And I'm pointing to this because, you know, for me in that instance, in that instant, I really was relying on that data and the feedback loop was nearly immediate. But for something like an education investment, the feedback loops are so long, that it's really easy not to observe when we have these kinds of product or design misses. And that's what's insidious about the lack of diversity, when we have teams of all kinds in all spaces, putting products into the market that are woefully ill designed for their applications. Well, let's let's stay on that. Norma, supply change works on food systems. How does this play out in the same ed tech sense or product development sense? How does that play out in that term? Yeah, I mean, we think about the thesis for supply change capital, which is an early stage venture capital firm, is that culture and climate are the two biggest forces impacting many industries, but food in particular. And so as we think about culture, which is where DI comes in pretty heavily, we're thinking about the multiculturalism of the US. We're thinking about demographic shifts. We're thinking about wealth building. We're thinking about cap table ownership and community supply chains. But really, as you think about foods and flavors, right, it's been women and people of color who have contributed greatly in terms of ingredient variety and flavors. And yet those are the communities that are not receiving venture capital funding to advance the future of the food system. And so that's where that's where this comes in. We're thinking about what what are the new to the US ingredients that have been around for a long time, that that could be of heavy use and impact that can be consumed sustainably, that can build healthier communities. And so those are those are some of the examples that we think about in food in terms of consumer food. We also invest in food and ag technology. We're thinking about the future of commodities and how we can decouple agriculture from our need to feed 10 billion people in 2050. So we're thinking about the power of fungi and fermentation and how we can scale those technologies to deliver alternative colorants and alternative, you know, beanless coffee and flower from from macellium, for example. There's a lot of talk at Socap about like the business case. And and and we've we've had impact alpha, you know, talked about, you know, inclusion alpha, gender alpha. But there's also a little bit of pushback that said you don't always have to make the business case. Sometimes there's like a justice case. I don't know whether that's that's too, too broad. But do you have any thoughts on like, you know, there's clearly a you said earlier, have all the talent put against the biggest problems, you know, there's always there obviously is a business case. But how do you think about sort of weighing the the business case and the sort of equity case? I mean, I'll give an example from our portfolio. So we have an investment in a company called Virta, which is in the business of reversing type two diabetes. And the way they do it is through a digitally managed clinical program based on nutrition management, particularly a ketogenic diet. So that business, that that category diabetes, when you look at the epidemiology of the disease, who has it? It's basically black, brown and poor folks of all kinds. And so from a math perspective, solely looking at the business, it is impossible to build a business at the potential scale that the market shows without serving those communities. So that is a direct example of how the business case is baked in. But I think, from more practical standpoint, what this particular business needs to do is to change people's diet. It's counterintuitively this is a very high fat diet and low on carbs. But I had a conversation that was pretty interesting with the management team there, because the business had grown, you know, from an idea to, you know, a couple billion dollar company that's starting to really expand now. And they were just starting to go into Latino community in Texas. And this was a Medicaid community. And I got a look at some of their marketing material. And I immediately got on the phone with the CEO. And I was like, brah, you can't market to these folks with Swiss cheese and blueberries. Because what you're unintentionally telling people is I don't know you. And you know, any Latino folks in your circle, they're either Swiss cheese or blueberry for the first time after college. So you're telling folks, you're telling folks, I don't know who you are. And therefore, you cannot trust me to love you into health. And so, you know, the way I frame the conversation is less about justice, which I think is definitely important. But the conversation I'm having is about love. You know, can you can you love these people? And the conversation that I had with the company was, look, you have to earn the right to love the people so that they will then trust you and and do what you're asking them to do on this health journey. If they don't think that you know them, you cannot love them. And so they're probably not gonna love you back. It's when we shifted the conversation to one that was about love. A miraculous thing happened. Number one, the blueberries and the Swiss cheese came off the marketing materials. And soon thereafter, the conversions of folks opting into the business went up. And the company continues to grow. But the point is, you know, I think that we have, in some ways, in this DEI conversation, this kind of legislative tone about the whole conversation, that we're gonna make you do the just and right thing. And I think really maybe the more important or more effective mechanism is love. Because that's more joyful. You know, when you can connect with people over the food that they're eating, and you actually feel seen, you feel understood, you feel part of that feels good for everybody. And it's actually a creative. It's the thing that drives growth. So that was sort of a setup for a question about sort of, I want to move into kind of practical steps. So one of the things that's happened, obviously, in various in recent years is emerging manager programs. So allocators deciding that they're going to try to rectify some of the previous imbalances by, you know, creating special programs. I don't know. This is sort of a blonde question. I don't know whether any of you have been in any of those programs. But what do you make of the efficacy of that effort? Hi, go ahead. I've been through we've been through a few on the order of four or five, probably almost all of them. They can be very effective. I'd say the biggest takeaway has been GP communities, when you can really come together and share share the wins, commiserate the losses, share resources, benchmarks. So I think that GP community building, which is happening outside of the emerging manager programs is key. Discounts on service provider platforms is key. And then I think that the what really blows the emerging manager programs out of the water is when you can provide grant capital. And one good example of that is the recast accelerate program, which is providing 100 K grants to female GPs. And they've just announced the first 32 we were we were one of those. That is operating capital that can really bridge the gap during what ends up being a very long fundraising period, right? The the usual 18 month fundraising period goes to 24 months or even 36 months if you're a woman or a woman of color. In I mean, for my lived experience, it took us, I think it was 25 months from first close to final close. And so that operating capital gap, particularly if you have children, if you're a breadwinner, makes a really big difference. So for any allocators in the room interested in creating an emerging manager program, discounts on service provider services, and grant capital, the GP community, those are the the best takeaways. Steven, you want to weigh in? Yeah, I mean, just just an observation. We talked about earlier, which is that we use the term emerging manager, but I feel like that is a term that's complicated in the in a similar way is the term impact. You all know what I mean, like you say impact, and there are 20 different interpretations of what that means. And so we have a nomenclature problem there, and with the term emerging manager, because for some in the capital market, emerging manager means something like you're less than half a billion dollars and less and younger than three years old as a firm. And, you know, my bet is if you use the term emerging manager when you walk out of this hall, and that folks would, you know, assume that you mean something having to do with this conversation and creating more diversity. And those two get conflated practically in the marketplace. And so there's a lot of, you know, what you want is an efficient capital market where folks who are trying to build find the resources that they need to build in an efficient way. And so you know who to talk to, when, under what terms, etc. And right now we have a lot of, you know, market actors bumping into each other, and not intersecting and not being able to transact because there's a lot of wasted time and energy on misaligned conversations, misaligned expectations. So that's one of the, you know, practical challenges that we have with this emerging manager category. Right, right. I think some of you, again, this was not planned, but have our have illumined capital as your as an LP in your in your funds. And and they have a program that they help managers run through to bring up raise up their their practices. Or is one as well. Is that an effective, you know, LP sort of involvement? Is that an effective tool? Yeah. Yeah, I think so. I think it was definitely been one of the the things that was more, has been one of our LP's that's more on the forefront of this conversation when it comes to sort of DEI and taking away racial bias from conversations when it comes to deploying capital. I think what it does is, and I believe this across all different aspects, is it gives you the language to name what the problem is one. And I think that is really, really important. You need, you can be sitting in a room, I mean, when, and just as an example, when I came to the US 12 years ago now, I never called myself, I called myself an Indian, and I call myself a woman, I never call myself a person of color. So I didn't even think that problems that were related to people of color applied to me in the US context, because I was like, that's a different group. That's not me. Because I was not the person of color where I came from. I was just the majority, right? And I think when you have these conversations in large groups as a team of what it means to be a person of color, what it means to have bias, how does bias even show up in these different contexts and conversations in your workplace or with founders and CEOs, you suddenly start seeing a lot more of what your hidden biases are and how do you start tackling them and can start naming them for other people on your team and start finding solutions. And so without that common language, and I think Illumine has been a great partner for us and a lot of this stuff is how do we start vetting our pipeline? How do we start vetting our internal practices when we are doing interviews for folks? And I think one of the more concrete things that we've been able to do is add a DEI language, even in all our term sheets for our founders and CEOs. One is sort of a mandate on data reporting. But two is also like when they are interviewing for senior roles, that's VP and above, their final interview pool, not their overall interview pool needs to have at least two women candidates and or people of color. And in some ways you can say that feels like weird, but in many ways, I think what it does is it diversifies the original pool and it takes away the excuse of people saying, oh, yeah, but I spoke to like four women upfront and they weren't great candidates, right? Like it takes away that excuse from that conversation. And I'm not saying a hundred percent of our portfolio companies are there today, but it's steps towards that norm and us then making the commitment that we will help you find the right candidates for your independent board members, for your C-suite leaders, for the VP level to get there. And then it becomes a accountability question across the room and not something that's sitting with one HR manager. And I think that sort of, I said a lot of things, but I think Illumin has been a good thought partner to a lot of these pieces for us for sure. But broadly, it's been a good conversation to have with portfolio companies and internally for us. I like these kind of specific, very specific actions. Are there others that are that are working? There's a question here actually, what are some of the best organizational practices and protocols that you've seen across the fields to promote and support DEI? So you can take it broader than Illumin, but what are the nuts and bolts? Maybe one Illumin example and then one example from our own fund. And for me, I think at the base level Illumin brings credibility to us because they're a pre-2020 diversity lens investor, right? They've been doing this work for a long time. They've admired their work for a long time. And so this is the kind of buy and for the community effort that is, that we respect and we certainly want to be part of. I think we're new to the Illumin portfolio, so there will be a lot to gain when it comes to bias training and some DEI reporting and we look forward to that. So I think that will be valued to gain in our own firm, one of the ways in which we standardize impact and we measure impact is with a pre-investment questionnaire. And David, back to your earlier question, we are a returns first fund that can't help but think about impact in the food system. And so every investment is evaluated on its financial return merit but also must pass our impact lens and we think about impact in terms of the environment, health and diversity. And so we have a screener that is a yes or no yes or no answer questionnaire when we go through it. We say is this, you know, is this team, is the co-founding team BIPOC, is the, we think about the cap table, we think about the board, we think about the supplier, so do they have a, you know, a written sourcing plan that says they're going to source a certain way? What about the customers and the health of the community they're impacting? We think about greenhouse gas emissions, we think about water, we think about waste. And so we'll go through the questionnaire. At the end there's a, there's a pass fail. If it passes it continues through diligence. If it doesn't, you know, it may be a great investment but not one for us. So that is, it's a tool that we found really helpful as we on board MBA fellows who've worked with us. We've now had 24 of them over the course of the last two and a half years. So it's been, it's been a helpful guardrail for everyone on the team to continuously think about not only financial returns but also at the core, is this an investment we're going to be proud to talk about and, and proud to, to fund and promote. Right, right. There's, there's kind of, you know, the diligence stage. There's also like reporting stage. There's, there's your portfolio reporting. There's your own reporting. What are the, how do you make this additive and, and sort of a management tool as opposed to overhead cost? Well before, I just wanted to make a couple comments on the prior question. Sure. I think Aluma is the most thoughtful investor from a DEI perspective that, that I'm aware of. One of the things that they have done and continue to do is really great rigorous research. If you all haven't seen it as an example, Derin Dodson who founded Alumin did a study with Dr. Jennifer Everhart at Stanford looking at some perverse outcome that turns out the better managers of color, particularly black men, perform the harder it is for them to raise money. You would expect exactly the opposite but there's like really beautifully documented, you know, from a methodological perspective research starting to bring light to some of these counterintuitive forces that are happening in the marketplace. Just a note on that research because, you know, a lot of folks have immediately discounted it that I've spoken to like that. Well that just can't be. And so then the follow-on discussion, which this hasn't been published, but I'm just sharing some of the zeitgeist, some of the conversation, like well why would that possibly be the case? And the leading hypothesis that I've encountered is that for an individual asset allocator to see, you know, a new cadre of investment managers coming into the market is potentially a threat. Because if that community continues to grow, that looks like more competition for the job of the allocator. And so in a particular instance, a single investment decision, it might actually be rational for that person to forfeit a little bit of financial performance at a single manager level in order to preserve the structure that keeps that person in place. So that's, you know, that's the kind of important thinking that Ellumin is driving with their research. So I really value that. There's also, I think, some of the findings in that study were like about the implicit bias that, and it goes back to the emerging manager program too, that you can make an initial allocation, that's fine as a sort of performative gesture, but then when you get to a bigger allocation going forward, it becomes a reverse and sort of pattern matching. Yeah. That's right, and the knock-on effect of that is it sends a negative signal. So for managers that are going to raise fund two, three, four, what have you, if the earlier investors don't continue to support, then those investors that weren't participating are scratching their heads and saying like what do they know that I don't know? Why are they not investing? And so it creates this downward spiral that makes it even harder than it already was for those managers to persist with fundraising. Well, so just take it forward. So in terms of that known now implicit or explicit bias, what are the tools that can cut against that? Look, this water is very shallow. I mean, we don't have a lot of tools. Managers are struggling to raise, and when we talk about Normie talked about how long it has taken her to raise money, there's no good reason for that. When you look at the time to raise by demographic, it's crystal clear that it's just it's irrational. She's a good manager. It should not take as long as it has taken. It took me a long time, you know, to raise money, even though my numbers were, you know, well into the top quartile. Like the system is just broken and you are the vanguard here. Most people are not thinking about this. They're not talking about it. They're definitely not reading Stanford psychology reports about what's broken in the system. So we need, you know, I started out with the good news of how far we've come, but we have a whole lot further to go together. So we need folks in this community to, yes, to read those reports, spread the gospel, tell all these stories, and help us craft a better answer to David's question about what are the tools that we can employ to address these issues. Hey, there's some great questions coming up here. If you want to shout out, put your name on them. Let me just sort through these. Actually, the one I wanted to move to, and there's a couple that are in the same bucket here, is the push back that we mentioned at the top. And DEI is, you know, squarely in the sights of a, you know, pretty well orchestrated legal strategy, probably all of, you know, I've seen the affirmative action dispute in the, or sorry, decision in the Supreme Court. There's obviously the lawsuit against the Fearless Fund in Atlanta for race-specific grant program for Black women entrepreneurs. That's just sort of the point of the spear of a much broader legal strategy taking on DEI in general. It falls into a lot of these state-level pushbacks against CSG policies and whatnot. So in the face of that, you know, how do you, what's the way forward through that morass? Or what's the sort of way that you kind of keep yourself centered? I think for us it's, I think it's often conflated that you can either have impact or you can have business returns. And I think for us the two are the same. And so which is why some of this work around equity access, thinking about learner scale and outcomes, thinking about DEI metrics is so ingrained into the core of what we do. Because I think it is built into, like at the end of the day, if our portfolio companies are not serving the free-to-release lunch population Title I students, the ELL students, they're not building for America. They're building for a very niche audience that can already pay, will pay out of pocket. And it's a very small dam. Like if you just want to talk numbers, that's what it looks like. And so when the two are interrelated in a way that your business metrics have to align to the equity metrics that you're tracking. And unless you're tracking them, you don't know where you're going as a firm or as a company. I think that case is really simple. I think what it gets strictly to your point is when you start doing some of these more initiatives or efforts that are optic driven. And I think the fear around the optics-based DEI efforts is real. I mean, I ask my question that all the time when I'm on a panel or when I'm like nominated to be on something is that am I a DEI token in this conversation or is this really going to move the needle in terms of what we're trying to do as a collective group? And I think oftentimes the answer is that it is a DEI token. You're not really actually changing the conversation in any way forward. And I think individually, the more all of us collectively can step out of those rooms, step out of those folks, and other allies can jump in and say, hey, this is like an all male panel. This is an all ex panel and we need to get more people in the room. This is a completely white board of men which is very true in a lot of our portfolio companies and somebody else can stand up and say, and I think it goes back to what you're saying. We all need to be allies in the work. I think that's the only way to stay grounded and move forward and know when to say yes, but also know when to say no and take a step back because the more we show up in rooms where there's no value, I think we're just perpetuating a cycle of performative DEI which is not going to move the needle for anybody across all spaces. For me, I think it goes back to blueberries and Swiss cheese. I'm on the investment committee of the Acumen America Fund which invests also with the lens for impact. And I remember reviewing a company not too long ago that was seeking to increase the population of people receiving Medicaid and the founders realized that if they hit the ground at laundromats, they could capture the population they were seeking. And so it was just so cool to hear that pitch and to think through how important it is that you have the level of authenticity and the experience to know where to go and how to reach certain folks. So for us as supply change capital, we, my business partner, Shayna and I, we each have 20 years of experience working in these communities. Not only did I co-found LatinXVC but also Latinas and STEM where I was doing a lot of work bringing more women of color into STEM. She co-founded Chicago Fair Trade and has worked in the nonprofit sector, the corporate sector, venture backed company. And so we've been in these communities. We didn't set a mandate within our firm that we would invest a certain amount of capital with any single population but because the ground work has been set and we're authentically operating within it that yields that diverse deal flow. Three quarters of the deals we've seen since we started the firm in late 2020 have come from women and people of color and that has not changed throughout the pipeline. Those are the same people we're investing in at the end of the process. And so for me, this pushback is really, it really goes down to who you are, your own values and the work that you've ceded and not, and staying true to that because founders are attracted to that just like we're attracted to allocators like Illumin, like Impact Seat, who I see in the audience who have been doing the work for a long time. Founders are just as attracted to investors who they know have done the work. I just want to make a comment about you mentioned Fearless Fund and everything that's gone around that. So for those who don't know, this is related to the lawsuit against Fearless Fund and the rash of lawsuits that relate to the recent affirmative action, decision that came down and that whole space. And I think all of that legal activity has to some extent achieved its purpose, which is to create a chilling effect. And there is a broad misperception that I want to address here, which is that it is not against the law to make investment decisions based on DEI considerations. And I see some people taking copious notes. I won't go way into the weeds, but I want to just put three bookmarks out there. We could talk about offline if you want to follow up. But the legal rationale around this conversation is centered on three categories. One is Title VI. This is the part of the Civil Rights Act of 1964. And that's related to federal dollars flowing. So unless you are making decisions for a federal entity, that entire conversation is not relevant to what you're doing. So I think that's almost everyone in here. So you're free to continue on with your DEI activities. Groom about the cabin, please. Can the allocators raise their hands again? Right. The second is Title VII, which has to do with employment decision making. And last is Section 1981, which has to do with roles around discrimination and contracting. This is the one that does relate to both public and private decision making. But the key takeaway from this is that for there to be constraint around your decision making, race or gender or protected category has to be the only factor. So if you are making an investment decision, there are several factors. What's team? What's market size? Where the number of things that you may consider to make that decision, race can be one of those, for sure. The legal test there is the but for test. If, you know, but for this protected category, you certainly would have made a different decision. That could be an issue. But again, if you're considering a range of issues, you are free to do your business as you have been doing. So again, please spread the gospel that we are free to make our investment decisions. We are free to consider DEI considerations because there is a mass misunderstanding in the wake of these recent lawsuits. Good. Thank you for that. So these are questions from the audience and this is risks a little bit conflating a few things. So apologize for that. But in the kind of broader inclusion bucket, there's a question about disability, the world's largest minority, the world's most diverse minority, and the only minority group anyone can join at any moment in their lives. As impact investors, what can we do to better make sure disability community is no longer an afterthought of DEI and then what are practical examples that can raise visibility and reduce the inequality in indigenous communities? How do we increase the 2% of funding? How do we increase the 2% of funding that goes to indigenous communities and businesses? And kind of in the same vein, is there an over reliance on having diverse teams be the answer to solve DEI programs? Individuals may not have DEI values quote unquote themselves. And there are also structures that are not built to allow teams to embed the values. So I guess it's a broad inclusion question and how do people, actual individuals, kind of show up and be part of the solution? There's a lot there. There's a lot there. I want to split it up or there's a lot. You can take it, you don't have to take all of it. You know, have we thought about disability enough? I know there's some panels, other panels in the track and announcements. Yesterday we actually had an announcement of an investment in a fund called Enable Ventures in the brief this morning. Amazing. I mean, you know, the disability community is one of those protected classes that I was just talking about. So absolutely, it's in some ways already embedded in. But I think to the point of the question, it's maybe less part of the public consciousness. But I think the exact same thinking applies that we talked about earlier in the product context. You're just missing out if you're not factoring these folks in. We have a person with disability on our team at Bronx, for example, and learn a lot and get perspectives that we otherwise wouldn't. So yeah, definitely should be top of mind. And, you know, massive market opportunity there as well. Other thoughts? I mean, there is a broader question about, is, I guess it cuts both ways. An individual comes in, okay, that ticks some diversity box, perhaps that person then is somehow maybe supposed to represent DEI value. I don't know quite who wrote that, but there is a point there. Are they supposed to be the champion of something? And can they, you know, or is that a burden on them as well? I mean, that's something that probably comes up. I can start, if that's helpful. I mean, I'll speak to this in the context of the work that we do with our portfolio companies on some of this stuff. And so one of the groups that we convene is HR leaders and chief people officers across our portfolio companies. That's 80 plus portfolio companies globally. And they kind of connect once every two months or three months just to discuss broader issues. But DEI obviously has come up a lot. And DEI efforts within the firm has come up a lot. And I think one of the things that is a recurring theme, which is probably not a surprise to anybody in this room, is that yes, you can hire your chief diversity officer. You can hire your chief people officer. But if the CEO of the firm or the co-founders of the firm don't share the same values as this person that you've brought in, the work is not going to happen. And so every time we've had conversations, and I've had conversations with our portfolio companies when it comes to should we start a mentorship program? Should we start a sponsorship program for our people of color within the context of our organization? Should we start doing ERG group? Should we start celebrating some of these different cultural events that are happening or giving them as days of whatever the policies changes that they're considering? I think the first question around the room is do you have the support of your leadership? And is the CEO in the room, is the co-founder in the room going to make the same choices that you're going to promote? Because if your role is in isolation, none of this is going to work. And so oftentimes the work that we end up doing is leadership readiness with that team, of having them sit down and articulate their values, making sure that there is one of the C-suite leaders. And that's how we're structured internally too, when at all we take on any DEI efforts, each of the MDs is required to be part of those working groups. Because again, if they're not in the room and if they don't think it's important enough to move forward, it's never going to be the firm priority. And I think that's sort of one of the ways that I have seen conversations play out around whose role is this, where does this work sit? And of course, needless to say, the work should never fall on the group that needs to support the most. And that is often a lot of the educating that needs to happen in these conversations as well, where folks will come and say, hey, we have 15 Asian people in the firm of Latinx people and we've created a Latinx group for them to go support themselves. And you're like, great, but what are you doing about this? Like, how are you changing this conversation? And we'll get silence and you're like, okay, then we're not ready for this conversation. We need to take five steps back and figure out what else needs to change before you create this group. So I think that's some of the work and conversations that we're having without portfolio companies at least. Couple of notes for me. So on the disability side, I have not thought about it enough, but I'm happy to learn. So that's one takeaway for me. What can people do? I'll share two things that we've done within our own firm. One, we didn't necessarily have the Friends and Family Network to get us to a first close. So when we started raising capital and socializing the thesis, we said we want to get to a community close. And so this is all the folks who believe in the thesis resonate with what we're building. And it took 19 people to raise $2.1 million. And so we took some small checks. We ended up with 71 LPs for a $40 million fund. It might sound horrifying. It can be when all the data requests start coming in. But it does mean that we've provided access to folks who wouldn't normally have access to a venture capital fund and to start that on-ramp journey. We did that individually as LPs. And then as we started learning more, we actually created an SPV that provided access to three different firms. And so individuals invested through that SPV. So that's one way where I think their manager is rethinking access across the venture stack. And then in terms of whose responsibility, we see ourselves in a data gathering mode. So we're not dictating what our portfolio companies should do or who they should hire. We're providing resources, certainly, around diversity pools. We've teamed with an executive coaching firm and co-created a post-investment support program that tackles helping them think through what kind of culture do you want to build? What kind of policies does that entail? How do you then attract and retain talent based on that identity you've created? So we're doing that work. But in terms of who they hire, we're really in data gather mode. So we'll ping for the data. We'll see what it looks like and then evaluate whether there's anything we can do or any role we can play beyond that. Great, great. In the spirit of practical takeaways, if you have specific tools, practices, approaches that have worked, write them down and, again, put your name on it and you'll get a shout-out. So let me group these two questions together. One is, how do we ensure there are no negative outcomes of investments on BIPOC communities? So not just investing in the positive but also ensuring that there's no negative outcomes and another in sort of the unintended consequences or possibly intended consequences. We know that AI is full of racial gender and other biases that we find across society. How can we ensure that when you do use AI it's not perpetuating disparities that we see today? So sort of broad negative outcomes and a sort of specific question about AI. My short two-word answer is more investment in R and D and more rapid cycle evaluation to test. I think part of the challenge is that we test on certain demographics that are easily accessible and around us as well. Like so when we're doing product feasibility, usability testing, and it goes back, I think, to the product teams that you are and then who your network is, that's all you're testing for. And so you're not thinking about some of the other communities as much. But I think if we made, and I can speak to this all day long for anybody that wants to do it, but if we spent more time and more dollars on R and D and more time thinking about R and D in universal communities, so not just the one that's closest to you but all communities that would potentially use your product, I think that'll solve for some of this because you learn fast and fail fast. I think it's going to happen that there will be some negative learnings in the beginning, but you can rectify from that before you kind of release a product out at scale and then realize when it's being deployed in to 500,000 students or 2 million students, that suddenly there are some negative consequences that are happening. So how... Is there any examples? I mean, I think EdTech would be a good example because it does reach a lot of kids and at a vulnerable age as well. In terms of negative consequences... Yeah, you don't have to name the company, but sort of the general... I think we're seeing more of that on the AI side right now, for sure. I think in the AI side, I mean, the power of AI is clear. I think everybody sort of agrees that AI is here to stay and I will not be lying when I say that we get pitched close to 100 companies a week that sort of sit at the intersection of AI and EdTech. So it's not even AI plus healthcare, AI plus other tech, AI and EdTech. And a lot of these companies are just beautifully packaged cheating companies or like efficiency companies and they're marketed as like, we're going to teach our kids how to learn faster, where they're going to learn how to write better, but all it's doing is actually writing for the kids. And in the absence of thinking of that from a learning perspective or an outcomes perspective, a lot of these companies are getting funded, they might wind down maybe two or three years down the line, but they are going to get deployed in schools because they have the capital to get deployed in schools. And I think that's one space where this example resonates the most right now for us, is we only have invested in maybe ten-ish companies total in this space that has sort of AI plus EdTech, a cross pre-K12 post-secondary and workforce, just because I think we're at this wave where it's a really noisy market and a lot of testing needs to happen, a lot of learning needs to happen, a lot of experimentation needs to happen before we know which of these actually will drive learning outcomes and not just be quick hack solutions or one feature out here and there. So I think it's more true in the AI context than that I can think of negative consequences than maybe specific communities. Yeah, yeah, negative consequences. I think the failure question is like eldest immigrant daughter pressure. We don't do anything for regular venture capital, so I don't know that there's anything to do here for failure prevention. I think we fund, we let people work, and then we measure the data. I heard that question a little bit differently. I think it was asking how to make sure that the efforts towards DEI don't create negative consequences. So I'm talking to the organizers of this discussion. They were like, let's have the real conversation. So I'm going to gently try to do that. And I want to point to something that you said earlier, which is Malika, you're, and I am not throwing stones here just to be clear, but I do want to illustrate one of the potential negative impacts that is actually happening. And that is that the DEI consultants, the folks making decisions as all of these waters swirl are doing so with at least a couple of different perspectives. One is checking the box. Like we've got to get the numbers. You've got to show that you're doing something. And the check the box approach to this work I think does create negative impacts. So I'll come to you in a second, Malika. But as an example, in that room that I mentioned at the opening of this conversation at an earlier SOCAP, I remember one of the big investment consultants putting up a slide and they were showing you know the slide it's high into the right and it's growing and it was a slide about the number of meetings that they had with investors of color. And I will tell you that I flew from here San Francisco to New York to go meet with that investor and they came outside their very tall building in New York and met with me on the sidewalk for maybe 10 minutes and went back inside their building. So that is a waste of my time. It is spouting greenhouse gases for no good reason. You know, like there's all sorts of perverse behavior which is a form of sort of the negativity and the waste in the system. So that's no good. In order to create a data point for their chart. Yeah, because they want to go back to tell their LPs that hey, we're really taking action here. We're meeting with all these folks. We're seeing the market. They're not seeing the market. They're checking boxes, right? So that's a thing that's happening and that is a negative consequence of this. There's a lot of wasted time, energy and money and talent. The other is more nuanced and I'm going to name it and I'm going to do so gently and with apologies but I'm pointing to what you're saying, Malika, which is you do have a layer of folks who have access to these spaces and they are folks who don't have a primary identification with the experience but may have an identification with the category. So again, I'm pointing to this gently and it's not about throwing stones but you know, when you were saying earlier, I don't identify as a person of color. I didn't and fortunately, you're a cool person. I talk to you and you're growing and you've been on your aluminum journey and all that and I think that's good and at the same time, the real talk is there are legions of folks who don't get into the room. That's the point of the conversation, y'all. Like at the end of the day, that's what we're trying to work on here. This ain't the check boxing thing. The purpose of this has been and always should be to address the structural disparities that got us here in the first place and so the point that I'm trying to gently make while being inclusive and embracing everyone that's doing the work because that's good and everyone should be doing that work and this is part of the tough stuff that we got to figure out together is that we've got to continue to center the soul of what this is supposed to be about in the first place and so we have this balance of on one hand we do need to hold ourselves in each other accountable and we do need data and metrics but that can easily tilt too far toward box checking and in the interest of box checking we overlook the folks who really should be at the center of the conversation. So I hope that point gets across. I'm trying to lay it out as gently and welcomingly and lovingly as possible but that's what it's about. Indeed and there was a promise of some honest self-criticism in the impact world specifically and you sort of teed that up well. You know capitals like water it flows to you know the path it's easiest and so the challenging news about the work with native communities is it is not the easiest but it is why our first principle at Bronze is we think love is a competitive advantage. I love you I'll do the extra work and we can put those points up together and carve a path so that then you know those dollars continue to flow when it's clear that it's safer that there's a way to do it. You know it's going to take some folks on the vanguard continue to cut that trail but we have been doing it I'm ready to continue to do it and I hope we'll talk after the panel. I wasn't going to do this but now that you have I will too. We did a call one of our agents at impact called a couple months back on catalyzing capital in indigenous communities and had a number of folks. Kate Finn had put a report out called I think something like that Catalyzing Capital and Navajo Power and others and we're trying at impact output to surface this as best we can and we welcome helping that as well. So that tees up the final question. As I said I don't have my glasses on. What does this sign say? One minute okay. With so many different incentives and with so much noise in the financial sector how do you continue to show up with love for your community? So take that as a sort of final statement as well. I mean I love that idea that it is because I care deeply or love this work that we are willing to do the extra work and it rings true for me resonates with with our values that supply change. I think for us or me personally I think education's been the only driver of change in my life throughout it's the only thing I've fought for it's the only thing I've stood up for and so I think it's it's something I inherently understand and I understand what it's like to not have good quality education I understand what it's like to be an immigrant in a country I understand what it's like to be in a group that could both be the majority in one context and minority in another context and so I think that drives some of this work to make sure that everybody just has a seat at the table and can show up whether that's our portfolio companies whether that's in the context of schooling whether that's in the context of parenting different communities but yeah I think that's sort of what drives it and that's what forced me to show up. Steven? I mean I said I think you know bronze we built it into the culture of our firm and our our central belief is that love is a competitive advantage so we build it into the culture and our operating practices so that won't go away