PledgeLA to convene task force to address systemic pay inequities and raise non-equity funding for Black & Latinx entrepreneurs
LOS ANGELES – 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, today 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 in that 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, with participation from 174 organizations. 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% 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. ¹
- Women and People of Color Face Persistent Pay Gaps: While women in L.A. tech companies have greater representation from entry level to senior management positions than Silicon Valley², women earn significantly less than men (see graph). This gaps 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: While the majority of staff demographics remained unchanged between the 2020 and 2021 surveys, we did see a significant shift in the age of PledgeLA companies’ workforce. Just 22% of workers report belonging to Generation X or older this year, a decline from 37% last year. This means the vast majority of the L.A. tech workforce was born between 1980 and 1990, 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.
Despite the persistent challenges faced by the L.A. tech and VC sectors when it comes to increasing diversity, 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. In addition to no-strings funding to help grow their business, the Annenberg Foundation provides each with four months of technical assistance with Grid110, while PledgeLA’s network of leaders and businesses help grow participants networks and find other sources of capital. Following last year’s pilot, which 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, hired 29 employees, and 89% 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 be asked to gather and reflect on detailed internal data about pay equity and their compensation practices. While each participant’s data will be kept private, the group will identify challenges they all share, and 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, which 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 also has a Tech Mentorship Program, 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% of mentees were matched full or part-time opportunities 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.”
The complete aggregated results from the survey are available here.
¹ The aggregated data from surveys and the report were combined to create a “snapshot” of L.A.’s progress towards advancing equity in LA tech and access to capital. Combining self-reported data from leaders, staff-level surveys, and public data, this represents the most detailed, multi-year look at Los Angeles investment dollars ever prepared.
² Comparison of PledgeLA tech company demographics against the Center for Investigative Reporting’s 2016 analysis of 22 Silicon Valley companies’ EE0-1 reports: https://revealnews.org/article/hidden-figures-how-silicon-valley-keeps-diversity-data-secret/