Browse
Log in / Register
Share
A new initiative led by Redfin and several major venture capital firms aims to increase diversity on startup boards by encouraging companies to appoint an independent, diverse board member within two years of receiving institutional funding. This effort, dubbed #DiverseFromTheStart, addresses a critical lack of progress; while gender diversity among new venture capital partners has improved, startup board composition has seen "absolutely no change." The program's framework is based on the premise that a company's foundational culture is set by its first few dozen hires, making early board diversity a powerful lever for long-term, inclusive growth.
The core problem is structural: startup boards typically consist almost entirely of the investors funding the company. According to a cited Fortune report, 94% of decision-makers at U.S. venture capital firms are men. While comprehensive data on racial diversity is limited, anecdotal evidence suggests most are also white. This homogeneity is directly reflected in the boards of the companies they fund. Despite positive trends in other areas—like the ratio of new female VC partners rising from 0.31 in 2013 to 0.47 last year—the diversity of the boards governing early-stage companies has stagnated.
A company's culture is often solidified by its first 30 employees. Recruiting a diverse board at an early stage provides perspectives that are frequently absent when boards are composed solely of investors. These independent members act as a sounding board on customer needs and leadership development, helping to steer the company away from a narrow "Wild-West" culture that may not appeal to a broader talent pool. Based on Redfin's own experience, appointing diverse board members like Emily Melton, Selina Tobaccowala, and Julie Bornstein helped set the company on a more inclusive trajectory, making it competitive for talent over decades.
In partnership with firms like DFJ, Greylock Partners, and Madrona Venture Group, the initiative encourages startups receiving Series A or institutional funding to commit to three key actions:
Unlike investor board members, independent directors typically require compensation. The initiative suggests compensating these members with an equity grant similar to what an engineering director would receive, plus coverage for travel expenses. This equity cost is minimal if a startup fails and inconsequential if it succeeds, representing a low-risk investment in strategic governance.
The initiative acknowledges significant hurdles. For diverse candidates, joining an early-stage board is a major commitment with no guarantee of success. There can be a mutual desire for the other party to be the "big name," creating a standoff. Furthermore, changing the traditional model of board formation is slow. Projections indicate that without active intervention, a typical VC firm might not reach a quarter female partners until 2057. This underscores why a structured, proactive commitment is necessary to accelerate change.
Implementing a diverse board early is one of the most effective ways to shape an inclusive company culture. While the path has challenges, the #DiverseFromTheStart framework provides a clear, actionable plan for startups and venture firms committed to progress. The long-term payoff is a technology industry better equipped to innovate and lead by embracing a wider range of voices and experiences from its inception.
