Pam Kostka is the CEO of All Raise, an organization that seeks to “accelerate the success of female founders and funders in tech.” Pam spoke with Erika Brodnock and Johanness Lenhard, the authors of Better Venture, a first-of-its-kind guide to diversity and inclusion in venture capital and startups—who funds, who gets funded, why that needs to change, and how to make it happen. With data, history, and plenty of interviews with investors and founders, this book will demonstrate the needs—both moral and monetary—for a more diverse and equitable funding system. To support the creation of this book and be the first to know about new interviews and special offers, sign up for the waitlist or pre-order the book today.
Erika Brodnock (EB): Tell us a little bit about the history of All Raise. And when did it start and why? What are the goals for the organization?
Pam Kostka (PK): All Raise started as a grassroots effort. The #MeToo movement in Silicon Valley served as an external impetus. Susan Fowler’s blog post about her experiences at Uber was followed by Justin Caldbeck in the headlines and it just struck a nerve. It was the right time, the right place, and every woman in tech resoundingly said, “Yes, that! I’ve been there, experienced that.” What was impressive is that Aileen Lee went on to become an organizing force. She sent out an email to the community. 36 or so women responded immediately to say, “Yes, this is a time, this is a moment when we can do something.”
I think it’s emblematic of a couple of things. One, the need for it in the industry: Things had been bubbling up in the community and the ecosystem, not just for years, but for hundreds of years! It was incredibly important that these were women of power and influence who came together and said, “We have a platform, we have power and influence, and we can share that to actually drive change.” Thus, All Raise was born, first as an all-volunteer effort, then we actually incorporated ourselves. We set ourselves up as a 501(c)(3). We started that process in 2018 and finalized it in 2019. We then brought in myself and some other staff to really professionalize the organization and make it operational so that we could expand.
EB: Can you clarify what a 501(c) is? Is it a B Corp?
PK: It’s nonprofit status in the United States. We call ourselves a startup nonprofit, because we take the ethos of how to build and scale a startup, how to be a disruptor in the industry, and apply it to our mission. We just happen to do that via a nonprofit structure. It’s interesting that in our financing structure, part of the uniqueness of who we are is the magnitude of power and influence in the community that we’ve brought to the table. It’s traditional philanthropic organizations, and corporations that support the tech ecosystem here in the United States, such as Silicon Valley Bank, JP Morgan, UBS, Bank of America, EY. In our recent fundraising initiative, the venture capital firms and high net worth individuals in tech themselves are coming together to fuel our mission. We see that as an interesting investment model, where we have this large investment base coming to us and funding the disruption of the industry. That aligns with our mission, which is to accelerate the success of female founders and funders for a more prosperous and equitable future.
That mission drives everything that we do and now we’re getting the power and influence curve to say, this is something that matters to us and to women throughout the industry. Moreover, everybody who contributes philanthropically to the organization is also put to work in our community in service of the mission. We have a bias toward action, so it’s not enough to just write a check and let us do the work, our donors also need to be part of the change that we want to see. So every conversation we have with Reid Hoffman, with Sequoia Capital, with the long list of individuals who support us, is really centered around engaging them to join in and be an advocate—not just a voice, but an advocate for change.
Johannes Lenhard (JL): What are your high-level goals? And how have you been working towards these over the years?
PK: As I mentioned earlier, our mission is to accelerate the success of female founders and funders to build a more prosperous and equitable future. We fundamentally know that diversity generates better results. It’s not just about the redistribution of power and influence in the industry, but the wealth creation that is generated when you do that. Morgan Stanley estimates that we have the opportunity for net new wealth creation of up to $4.4 trillion. In the industry, that’s huge! Investing in Diversity, Equity and Inclusion (DEI) is a massive opportunity on par with the moonshot investments that the venture community likes to invest in. At All Raise, we call this the guaranteed moonshot: If you invest in this, benefit will come from all avenues. If you’re an investor, it’s to your portfolio. If you’re a founder, it’s to the effectiveness of your company. There is a wealth of power and momentum at stake. We hold ourselves and the industry accountable to two North Star goals. One is to move the needle on the number of women, including women of color, who are check writers at partner level within a venture firm. It was 9%, when we started. By 2028, we’re looking to move that number to 18%. We’re still doing the crunching for what happened in 2020, but as of 2019, we know that number was at 12%. That’s great progress, yet 68% of venture firms still don’t have a single female partner. And the numbers for women of color in the industry are abysmally worse—in the low single (like 1%) digit range. We recognize that we have a lot more work to do there as we continue to move the needle.
Our second goal is to accelerate the percentage of funding going to female founders, and we’ve changed this goal since we started. Originally, we were looking holistically at the system, then we began to use data to make ourselves smarter. In that process we learned that, when a woman raises her Series C she has an equal likelihood of raising as her male counterpart. I’m not saying it’s easy for her as she still faces obstacles and hurdles, but the raise is equally likely.
So we shifted our focus to really hone in on Seed, Series A, and Series B, because that’s where women are at a significant disadvantage—by as much as a 35% disadvantage, relative to the male cohort at a similar stage. Our 2030 goal is to move from 11% last year to 23% of funding going to female founders in 10 years. We also look at top-of-funnel, early-stage rounds to make sure that we’re empowering a lot more women and women of color to get funding and drive that change through the ecosystem, so that in 10 years we can see women we supported in the early stages becoming unicorns. Our vision for how we get there is twofold. From a top-down approach, we aim to reshape culture to move beyond DEI being a checkbox activity, towards making it synonymous with success. We call that moving from FOMO to DOMO, we’re moving from the Fear Of Missing Out to the Danger Of Missing Out. If you are not diverse and inclusive, your business will not be succeeding. That may mean, as a venture capitalist, you’re not attracting the best talent. As a founder, you’re also not attracting the best talent, you’re not building the best products and therefore you’re missing out on the economic opportunity available to whichever side of the equation you’re on. A lot of that for us rhymes with creating a megaphone: DEI is this unstoppable force that is coming in the industry, for women, for underrepresented individuals. It’s like a freight train coming down the tracks.
We do this by leveraging our 20,000-strong community and thousands of the most powerful male and female venture capitalists we have attracted to our table. We’re working with around 1500 of the most iconic founders, funders, and unicorns. People who have succeeded, as well as those who are up and coming, to understand how we can leverage their voices to enact the change we want to see. Our ethos of enabling important people with power and influence to take ownership, to make the change, and to be the drivers of the change is again clear to see. An example of reshaping culture is the All Raise Visionary Voices speakers bureau. Women’s voices, especially underrepresented women’s voices, are not widely recognized in the tech ecosystem in conferences, panels, and media coverage. We really wanted to address the red herring issue of “I couldn’t find anybody.” This is not a pipeline problem. This is an access problem. To that end, we’ve made 1,000 women available through Visionary Voices, a database of vetted speakers who have great talent. Their expertise, area of knowledge is made clear and anyone can tap into it. The list is growing every quarter and we have worked with prominent media and conferences to make sure that they are being diverse in their panelists and in their coverage. Of course, we also use the list ourselves when sourcing speakers!
After the top-down reshaping of culture, we look at what we can do from a bottom-up perspective to achieve those two North Star measures. We focus on rewiring the industry from the inside. The flywheel we have today is a continuous cycle in which white men fund white men, they become very wealthy founders, they exit, and they make investments in people that they know within their network. This is not necessarily intentional, it’s about networks. Who do they know? Therefore, who do they invest in again? This results in a very powerful flywheel that has been perpetuated and strengthened over time. When we look at the statistics, 68% of firms don’t have a single female partner and amidst COVID-19, the amount of funding to women is actually falling this year. That is statistically improbable, therefore there has to be some kind of an intentionality behind the decision not to fund women this year.
EB: Data shows the raw amounts being invested are going up, while the numbers invested in women are going down. As you said, this is statistically improbable, therefore, it appears there is intentionality behind underinvesting in women. There’s a couple of things here, because one, how has research shaped your approach? And two, now that we have data like this, what do we need to do to change this?
PK: We’re big believers in data, because what doesn’t get measured doesn’t get fixed. That’s true in life in general: If you want to run a marathon, you’ve got to put yourself on a schedule and know what your mileage is in order to know you can finish the race. Every day, you’ve got to measure yourself. If you do the work, you will complete your marathon, if you don’t do the work, you’re not going to complete the marathon. Simple. At All Raise, we believe data is core to our understanding. We are constantly reporting on our two North Star objectives, as well as on the obstacles that are behind the numbers. Based on our research, our theory of change is access, guidance, and support. Access is really crystallizing the point that this isn’t about capability, this is about networks. If you don’t know a woman entrepreneur, or you don’t know a Black or Latinx entrepreneur, then it is much more difficult for you to connect, and for them to break into, for example, the circle in venture. We really want to make sure that from an access perspective, we’re blowing that up and creating intersecting networks and creating moments when connection can happen. We are facilitating access to opportunity, mentors, money, talent, people, and experts. If entrepreneurs have a question about doing something, they usually have to Google it and try to figure it out, or they tap a network that can help.
Access guides a lot of our programming. For example, When Founder Met Funder is a very dedicated program that recognizes the unique lived experience of a Black woman and we’re going to be extending it to Latinx women next year. We’ve run this program for two years and the purpose is to give some guidance, but also to bring venture capitalists and these amazing Black entrepreneurs together so that they meet each other and can develop a relationship before there is the need for a transaction or ask for money. Bringing those networks together is really important because it invariably leads to the scientific phenomenon in nature called the edge effect, which is when two different ecosystems brush up against each other. An example of this is where savanna meets the desert. The most biodiversity is found right in where they connect together. As we bring these two communities together, we create those edge effects where we can see the amplification of money and power between them. We have been privileged to see creation and the creativity blossom in that area. The benefits of this are extended to both the entrepreneurs and the venture capitalists who get together and meet one another.
Guidance is the second pillar in our theory of change. There is a language of venture, the venture backed ecosystem and venture scale companies, and while we’re not trying to teach women to become men, we are trying to teach them the rules of this particular game. What is the language? What are the expectations? Making sure women are getting that inside knowledge so that as we rewire the industry and seed that new flywheel, it is successful. We really want to pass on insider information, the things that people aren’t going to tell you, that you can’t Google. An interpretation and explanation of when they say “x,” it really means this. Many of our bootcamps and digital programs do that for women. Our VC summit is one of our biggest programs of the year, taking place every fall. We regularly convene over 800 women in venture. It is the largest convening of anybody in venture and brings women together for a day of inspiration, but also guidance, across areas including career, negotiation, how to be a good board member, how to improve your investment thesis in a particular area, and more.
Finally, the last pillar is support. All Raise offers support through cohorts. Being an investor or founder in tech is a lonely journey for women. We use a cohort-based model both on the venture side and on the founder side to make sure that women get the support they need. 10 to 12 entrepreneurs develop deep relationships with people whom they can ask the awkward questions they can’t ask in their own companies. Real business gets done. It’s not just an emotional support it is also deep, impactful business. In the venture circles, we see deals being shared and won competitively against incumbents in the industry. In the founder realm, we see people being able to materially accelerate their business forward through connections, introductions, knowledge-sharing and access to something they need.
EB: I love the fact that you’ve given us tangible examples detailing how All Raise could be recreated by others in their local tech ecosystems. A cookie cutter approach that could be adopted seems to be emerging, which is fantastic.
PK: We have a bias towards action and hope we are creating a platform that other businesses can replicate and leverage.
JL: Looking at this from a systemic perspective, who do you think are the key players that really have to move now? What do you think about the role of LPs? Do they form part of the structures you are addressing? And if so, how?
PK: The first part of your question was, who needs to be engaged in this movement, right? And the answer is everyone needs to be engaged in the movement. But there are two levels. One, people with power and influence absolutely need to be willing to accept the responsibility of sharing their power and influence. We believe that the way to get somebody to do that is not just to appeal to the moral rightness of this movement. Because we are a venture capital backed ecosystem, we look at capital gains and benefits as the main driver. Increased DEI yields better results. People at the power and influence curve in the venture industry are always looking ahead at who’s seeing around the corner and what the next trend is… The next trend is DEI. Two key events have occurred. The first back in 2017 which sparked All Raise, then in 2020 George Floyd and Breonna Taylor were murdered and that opened up another aperture around social justice. These are moments in history that we’re not going to move back from. There is a change afoot. The tech and venture industry can either acknowledge and embrace that and be drivers of that change or be left behind. That serves as one of the key motivators for the industry. The way All Raise started with 36 amazingly powerful women who had succeeded, and recognized they had a chance to accelerate the pace at which change could happen and engage their male peers in that conversation too.
We see examples everywhere of those with power and influence taking responsibility to be the change. David Swensen, the head of the Yale endowment, which is one of the largest endowments in the United States, has come forth from the LP perspective to say, “We invest in you, so you can invest our money. If you do not diversify, I’m going to pull our money from you.” That is a powerful move from somebody who has their hands on the reins of substantial amounts of money saying, make changes or face the consequence of losing money. He’s doing that because it is both the right thing to do and it is the economically prudent thing to do. This serves as a clear economic incentive to venture firms to make change. It’s a great example. Goldman Sachs coming out and saying, “We won’t take somebody public unless you have one diverse board member by the end of 2021. And two by the end of 2022.” NASDAQ, coming out and saying, “We’ll delist you if you are not diverse.” These are powerful motivators for people that it is time to move. As I mentioned earlier, what gets measured, gets done! We’re all good at setting OKRs for key results and measuring ourselves on them. It is hard work, but if we measure, put incentives in place, and those incentives are appropriate, we will see change. It is about power and influence, and the truth is everybody has power and influence. As part of our community culture, everyone who has been to a program at All Raise has a responsibility to pay it forward. All Raise participants get access, guidance, and support, thus, is more empowered on the flip side than when they started. So, when the next woman, Black person, or Latinx person reaches out, it’s an obligation to share what has been learned to create an opportunity for that individual. It’s not just the top of the pyramid. It’s everybody in the ecosystem, driving macro and micro changes.
EB: Excellent! What are the biggest success stories that you think All Raise has contributed to or indeed, instigated and written?
PK: We have a couple of success stories. One is at a campaign level. Founders for Change was really the recognition that there was an increasing generation of founders who care deeply about diversity, equity, and inclusion in their teams, on their boards, and, when possible, in their choice of investors. We rally these founders together, not only to give them a support framework of others who share this ethos, but also as a communication to, for example, the venture community, that we are your lifeblood. If I walk into your organization, or go to your web page, and see that you’re all white men, I could make the choice not to work with you because I don’t think I’m going to get the benefit from working with a monoculture and I want something that’s more diverse. Founders for Change was very much a social campaign, we continue to work with it. It served as a wake-up call and that is where we started to see a change from that 9% moving to 12%.
I would say every woman that we engage has such a powerful, amazing story. There are many throughout the ecosystem, but Tiffany Dufu stands out. We connected at a party for the Alpha Girls book, a book about the four female pioneers in venture, on whose shoulders we stand today. When I met Tiffany, she said, “I’m really looking for funding and somebody said that I should talk with you.” We started to network, and I plugged her into the All Raise network. We always call ourselves the rocket fuel accelerating powerful women founders. Tiffany is amazingly charismatic. She has a business called The Cru and she is one of the few Black female entrepreneurs who’s recently raised over a million dollars. She’s amazing. I never want to take credit for her success. She did that. Yet, we had an influence there. Tiffany went through some of our boot camps and we were able to plug her in and make introductions. Even though she has now raised, Tiffany has joined our next boot camp. We want to continually support a woman entrepreneur throughout her journey. She’s a great success story.
On the venture side, a woman called Meera Clark with Obvious Ventures comes to mind. She’s a senior associate and said she would never have found her job opportunity if she hadn’t read about it in our VC careers newsletter, which shares job openings in venture. Another time, I met a woman at a dinner and she was looking for underrepresented board members as her investors were all men. Her name’s Amira Yahyaoui. She is an impressive woman, now revolutionizing access to financial support for people who want to attend college. She was funded by Sequoia Capital in her most recent round. I introduced her into the All Raise investor circle and as a result she had multiple competing offers. Finally, Nicole Quinn at Lightspeed Venture Partners invested in The Nudge. Nicole Quinn is part of our venture community, and The Nudge attended an All Raise boot camp. The good news is there are synergistic moments that lead to traction and momentum in the industry.
We can see this new flywheel turning now. Is it turning as quickly as the established, white male flywheel? No, but we’re beginning to slow that one down as we’re ramping up this new flywheel with funders, founders, and operators so that women and underrepresented individuals can participate in the funding, founding, and scaling of companies.
JL: We’re actually going to interview two of the Alpha Girls, Sonja and Theresia, for the history section.
PK: Sonja is amazing, as is Theresia. They’re both part of the All Raise network. The work that we do is cumulative. We’re standing on their shoulders. The generations that will come that will stand on our shoulders. And that’s the whole point.
JL: Do you think quotas are going to play a role in changing the ecosystem? If so, for whom? On what level? Or is there something else that you think we really need to bring onto the agenda?
PK: I don’t think quotas are inherently good or bad. They’re neutral. We talked about the importance of measurement, right? Quotas, in some ways, are just measurement tools. What gets measured gets fixed. Quotas can have a negative side, of course, if people are using them for checkbox reasons. Where I see quotas being effective, and quotas mean something different to everybody, is when you’re tying the quota to an economic imperative. It is NASDAQ saying, “I’m not going to tell you how many people per se you need to diversify your board, and here’s the de minimis that you need to do. If you don’t, you can be delisted.” Is that a quota? Yes. Is it a quota tied to a really relevant economic incentive for the organization? Absolutely.
Conversely, “You just need to hire two people” doesn’t work so well. The problem with some quotas is, you don’t get inclusivity. You can end up seeing a revolving door where individuals are brought in, but then there’s no inclusivity, they don’t feel welcome, they don’t feel effective and they leave the organization as quickly as they came.
What I think is really interesting about board level initiatives is that now you have board members who are helping to drive diversity, equity, and inclusion down through the entire organization. One of the things we focus on a lot is how to encourage boards to focus on all facets of DEI, including, what are the numbers of people, but also on questions such as: Who is leaving the company? Why are they leaving the company? What is being done to create inclusivity? And to look at that, not just in your employee base, but in your product operations and your supply chain. Measuring and treating DEI as a core strategic value for the organization and as important a board topic as the sales pipeline.
I think many industries are getting more sophisticated in the way we think about and measure quotas, not just at a moment in time, but for long-term success. Tying a metric to an economic outcome and measuring impact is an important trend of the future and will lead to a tipping point. The beginnings of which we are seeing now. I think one of the reasons we’re seeing this in the boardroom is board members can impact what the company does and hold the company accountable.
EB: Finally, do you think that tech has a role to play in terms of real-time measurement? It’s almost as though diversity, equity, and inclusion tend to be surveyed once a year, and not focused on much for the rest of the year. I think there should be an All Raise in every single country where there is venture and tech. This is where we should be headed. But actually, there isn’t. So, how do we keep this current at the front of mind, all the time, rather than just some of the time.
PK: I think tech absolutely has a role to play in how we approach diversity, equity, and inclusion going forward. And where we focus, I think there’s been a lot of focus on the “D” in DEI. And that’s measuring the inflows, but not a lot of measurement on the equity and inclusion piece. Tech runs on data, we have a lot of data, but we still need to add data! So we’re talking to, for example, Crunchbase, and PitchBook about how they, as trackers who have data on the industry, add data on race and gender. And do that in the right way for self-identification. They do a good job of producing quarterly reports, but how can they start to report on a regular basis and allow people to make informed choices, while making the state of the industry transparent? I don’t think you can measure this in days. This is not real-time trends. But when we look at moving the numbers and measuring the industry, we look on a quarterly basis, like what is the quarter, and by doing that, then you avoid that end-of-year shocks. DEI needs to be woven into the fabric of organizations. It’s also why we say at the board level it’s a strategic imperative to measure. The board’s going to meet at least quarterly and if your obligation is to report to the board and have a strategic conversation about DEI—where you’re succeeding, where there’s room for improvement—and you’re measuring, again, what’s happening on the back end, who’s leaving the company and who’s not, as well as issues like pay equity.
I’m excited to see what this next generation of companies will do, when they’re looking at whatever space they’re looking at and incorporating more real-time information around whether it’s how they build their product and who they target. There are so many products, and thus companies, that could be so much bigger if they were thinking more broadly about who their customer base is and really infusing DEI throughout every element of the company. It’s not just an HR problem. It’s not just a team-building problem. There’s a lot of things that companies can and should be doing, and tech is going to play a role in that.