PledgeLA, a coalition of hundreds of venture capital (VC) and tech leaders in Los Angeles working to increase equity, community engagement and accountability around corporate diversity efforts, recently released the results of its expanded, third-annual diversity, equity and inclusion survey.
Launched in October 2018, PledgeLA is a partnership between the Annenberg Foundation, the Office of Los Angeles Mayor Eric Garcetti and 219 L.A. venture capital firms and tech companies. PledgeLA is unique among VC and tech DEI efforts. It annually measures its members’ progress and provides support to help member companies achieve improved DEI goals and outcomes. No other region in the nation collects self-reported data on diversity, equity and inclusion (DEI).
This year’s PledgeLA diversity survey is the largest ever conducted for Los Angeles VC and tech companies. 174 organizations participated. Key findings of this year’s survey include:
Investments from PledgeLA VCs for Black, Latinx, and women founders outpace the national average
The investments made by PledgeLA VCs in Black founders increased by 71 percent. since last year (see graph here). Far more gains are needed, however, when it comes to funding for women and Latinx-owned business. Given that one out of every 10 VC dollars flows through Los Angeles – a 39 percent increase from 2019 – these trends have national implications.
Women and people of color face persistent pay gaps
Women in L.A. tech companies have greater representation from entry level to senior management positions than Silicon Valley. However, women earn significantly less than men (see graph). This gap is larger than the national average. Additionally, Black and Latinx employees earn far less than their peers (see graph).
Number of Gen X tech employees in the workforce saw significant decrease in 2021
The majority of staff demographics remained unchanged between the 2020 and 2021 surveys. However, we did see a significant shift in the age of PledgeLA companies’ workforce. Just 22 percent of workers report belonging to Generation X or older this year. This is a decline from 37 percent last year. This means the vast majority of the L.A. tech workforce was born between 1980 and 1990. This signals a spike in the number of Millennials, and a decline in opportunities for older adults. This raises important questions about potential ageism and the representation of diverse age groups in the tech workforce.
The L.A. tech and VC sectors face persistent challenges when it comes to increasing diversity. However, PledgeLA has seen encouraging signs that its efforts are bearing results. With a multi-year focus on increasing access to jobs in tech, venture capital and funding for women and POC-led startups, the initiative is focused to ensuring that measurable growth and progress continue. Over the coming year, PledgeLA and AnnenbergTech have committed to:
Raise another $1 million over two years for “The PledgeLA Founders Fund”
This is an annual pool of non-dilutive funding that provides $25,000 grants to 20 early-stage Black and Latinx-led companies. The Annenberg Foundation offers no-strings funding to help grow these business. They also provide each with four months of technical assistance with Grid110. Meanwhile, PledgeLA’s network of leaders and businesses help grow participants networks and find other sources of capital. Last year’s pilot focused on entrepreneurs in the South L.A. community. The effort has already helped founders of color make measurable gains. In a little more than six months, the pilot group raised more than $2.55 million in follow-on capital. The group hired 29 employees and 89 percent of businesses increased recurring revenue.
In 2021, the program will expand to serve early-stage Black and Latinx founders across all of Los Angeles County, buoyed by support from new partners Earvin “Magic” and Cookie Johnson and the Anthony and Jeanne Pritzker Family Foundation. Both have pledged multi-year funding and outreach support for the effort for the next two years.
“Backing visionary entrepreneurs of color is a clear path to building economic opportunity and generational wealth for our communities,” said Earvin “Magic” Johnson, Chairman and CEO of Magic Johnson Enterprises. “We’re excited to back the PledgeLA Founders Fund because it highlights the tremendous untapped potential for businesses led by people of color that might otherwise be overlooked. When investors broaden their lens, we all win.”
Convene a task force to address ongoing regional concerns around racial and gender pay equity.
Working with advisors from PledgeLA’s leadership team, approximately 20 participating businesses will gather and reflect on detailed internal data about pay equity and their compensation practices. While each participant’s data is private, the group will identify common challenges. Then they will be tasked with making recommendations for the broader ecosystem about ways to ensure fairer pay. Additionally, this group will partner with experts from the new Wallis Annenberg GenSpace to examine the images of ageism and generational differences in representation.
Expand its core programs that seek to increase access to jobs for women, people of color and under-represented groups.
PledgeLA’s core programs include its Summer VC Internship Program, a collaboration with HBCUvc. This program provides interns with 10 weeks of experiential learning, including full-time work at a VC firm. Of this year’s final cohort, 100 percent identify as a woman or a person of color. Alumni of the program have gone on to investment roles at the Dorm Room Fund, PayPal Ventures, Upfront Ventures and Vamos Ventures.
PledgeLA’s Tech Mentorship Program
PledgeLA also has a Tech Mentorship Program. It is hosted in partnership with the Riordan College to Career Program at UCLA Anderson School of Management. This program matches 50 L.A. tech leaders as mentors to 50 first-generation college students and recent grads. Meeting monthly for a full year, PledgeLA mentors work with PledgeLA to place students in either tech internships or a full-time role by June 2022. Last year, just over 80 percent of mentees matched with full or part-time opportunities. These opportunities were at companies including Accenture, Amazon, Crexi, Google, Oracle, PwC, J.P. Morgan, McKinsey, and U.S. Bank.
“The Annenberg Foundation and our Chairman Wallis Annenberg created PledgeLA to ensure that all Angelenos benefit from the growth of our Los Angeles tech and innovation sector,” said Cinny Kennard, Executive Director, Annenberg Foundation. “Despite the persistent challenges we face, the impact made over the last three years shows our collective’s tremendous potential. In that time, PledgeLA has matched nearly 150 underrepresented Angelenos with paid opportunities in tech and VC, provided $500k in grants to founders of color, and fostered a regional spirit of accountability and action.”
“Los Angeles has one of the most diverse economies in the country because we know our businesses are stronger when they represent the people they serve,” said Los Angeles Mayor Eric Garcetti. “PledgeLA’s work to provide critical data and blueprints for action will help us continue to break down barriers to opportunity for underserved and underrepresented Angelenos in the workforce.”
About PledgeLA’s survey methodology & regional/national comparisons
In a context where a lack of data around diversity and representation is the norm, PledgeLA’s efforts represent a bold step towards authentic local accountability. No other region collects self-reported data on diversity, equity and inclusion. Most reports traditionally rely on secondary data-sources, such as government records that only focus on race and gender and have no public reporting requirements. Additionally, unlike PledgeLA’s annual survey, which captures both company location and employees’ hometowns, other regional surveys lack specificity when it comes to geography.
To gather this type of data from companies of all stages, PledgeLA partnered with Pluto, a diversity & inclusion platform, powered by survey and communication features that are specifically designed to help advance [DEI] efforts. Pluto offers comprehensive DEI metrics, advanced intersectional analytics within and across companies, and proprietary privacy measures that protect respondent identities regardless of company size. For the comparisons to Silicon Valley, the PledgeLA team used the Center of Investigative Reportings 2018 survey of diversity in Silicon Valley as a point of comparison for race and gender data. To benchmark our venture capital portfolio data, we indexed our findings against the 2020 RateMyInvestor Diversity in US Startups report, which analyzed the investments of 100 non-overlapping firms.
PledgeLA is a collective of L.A.-based tech companies and venture capital firms. This collective is working to create measurable change in the areas of community engagement, diversity, equity and inclusion. Created in partnership with Mayor Eric Garcetti, the Annenberg Foundation, and over 215 Los Angeles venture capital (VCs) and tech companies, PledgeLA’s members make a commitment to track their community engagement and diversity data each year and make that data publicly available. They also work to expand their engagement with local nonprofits that support diverse talent and reflect the civic spirit of Los Angeles. Additional support for PledgeLA has been provided by the Acevedo Foundation, the Weingart Foundation, and the Conrad N. Hilton Foundation.
About the Annenberg Foundation
The Annenberg Foundation is a family foundation that provides funding and support to nonprofit organizations in the United States and globally. The Foundation and its Board of Directors stay involved in the community through innovative projects that advance public well-being, spark new ideas and spread knowledge. The Foundation is committed to core values of responsiveness, accessibility, fairness, and involvement. To learn more about the Annenberg Foundation and their various initiatives, click here.