Athletes x Venture Capital
- UConn Financial Educators Council
- Mar 30, 2021
- 2 min read
By Alexander Candow
Silicon Valley is known as a global center for technological innovation. It is home to many of the companies that have revolutionized aspects of our lives. Think Uber and Zoom. While this place is known for many things, diversity is not one of them. Silicon Valley is facing insurmountable issues on the inclusion side. Google, for example, 2% of its employees are Black and 4% are Hispanic/Latino. For young students who want to enter the tech industry, it’s showing a lack of care for helping create diverse spaces for them. Studies have shown that teams who focus and highlight diversity have benefited due to different ideas and perspectives in heterogeneous settings. That isn’t the case in a white-male-dominated space where rarely ideas and perspectives are challenged. The need for diversity reaches beyond the operating teams of these companies. Those who invest in diverse founders and profit from the growth of those companies can immediately have an impact on those communities the founders stem from.
As a result of Silicon Valley’s legacy of innovation, it has become a major hub for venture capital in recent decades. Venture capital investors, or VCs, provide capital to companies exhibiting high growth potential in exchange for an equity stake. Typically, this group of investors does not represent more than one or two demographics. Over 97% of tech startup founders and their venture capital backers are White or Asian, according to Bloomberg.
As awareness around diversity grows, it has become common for prominent figures to use their influence and capital to create real change. A shift in the culture around venture capital investing appears to be underway as NBA players begin investing their own money into startups. Some of these investors include stars like Kevin Durant, Russel Westbrook, James Harden, and Steph Curry. These are only a few on the growing list of athlete tech investors.
Of course, NBA players already have full-time jobs as professional athletes. Though some players like Kevin Durant have taken it upon themselves to understand the venture capital industry and learn key investing strategies. Durant appears to be following the lead of athletes like Michael Jordan, Magic Johnson, Shaquille O’Neal, and LeBron James who have used their wealth to create both positive change and positive returns.
As non-traditional investors, especially those with influence, begin entering the space it will help pave the way for those who have been historically excluded from these investment opportunities. Kyle Lowry, a point guard for the Toronto Raptors, describes this brilliantly when he states, “There is a gap that was created; I think athletes are helping tighten the gap. We opened the door, but how to keep the door open for the broader culture.” Certainly, there is more work to be done but public figures like these are stepping up and making strides to bring more opportunities to underserved people. Sources: https://www.businessinsider.com/nba-players-tech-investing-kevin-durant-andre-iguodala-kyle-lowry-2021-3
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