Venture capital remains dominated by white men

Shall we all pretend to be shocked by a new study that shows that the venture-capital industry is overwhelmingly — no, disgustingly white and male? A National Venture Capital Association survey found that 88 percent of general partners — the people who can actually greenlight an investment at a firm — are white, and 86 percent are male. On the VC blog Private Equity Hub, Alex Haislip takes hope, noting that the junior ranks of VC firms are more diverse — and that some less lily-white firms have delivered good returns lately. Greed and the relentless herd-following instinct should take care of the industry's inequities, he seems to argue. Good luck with that!

The NVCA survey reveals why the problem will not self-correct over time. Most VCs are hired from outside the industry, rather than rising up through the ranks. Underlings, by and large, remain underlings, while VCs hire their buddies out of tech startups. A good example: The all-male, all-white team of Benchmark Capital, which recently added white male Facebook executive Matt Cohler as a general partner. That's not to say that Cohler's hire was undeserved — but it is utterly typical.

Cronyism is alive and well in the venture-capital industry, accounting for the active discrimination evidenced in its demographics. There's no doubt that women and minorities could make venture capitalists. The question is whether the dominant firms of Sand Hill Road will afford them the chance to prove themselves, by taking a shot on hiring someone who doesn't look like the rest of the team — or if those excluded from the industry will have to make the point the hard way, by making more money than the old guard. The latter would be very satisfying to watch happen.