Diversity, Equity & Inclusion (DE&I) Resources

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Diversity, Equity & Inclusion (DE&I) Resources

The MVCA is committed to integrating the promotion of diversity and inclusion in the investment and entrepreneurship ecosystem. As diversity is critical to the process of innovation, we have committed to providing resources designed to increase diversity and inclusion for Michigan investors and founders.

Historically, Venture Capital investing teams build portfolios that represent their own diversity, or lack thereof. We believe that a more diverse pool of investors will lead to a more diverse pool of funded founders. Increasing awareness of diversity and inclusion will have a deep impact on member organizations and the communities we are looking to support.

The following resources are provided to support MVCA members in adding DE&I elements throughout their investment processes.

Due Diligence
Many of our member organizations have developed comprehensive diligence processes, but have missed DE&I initiatives in the process. The following resources are provided to help member organizations add DE&I to their current diligence efforts.

Evaluating Diversity, Equity, & Inclusion in Due Diligence: Article from Alliance Global Advisors, a women owned advisory firm consulting the investing community. The article outlines questions general partners should consider when evaluating investments (and their own organizations).

VC- List’s Due Diligence Checklist: While the checklist from VC-list doesn’t explicitly call out DE&I, check out their requests for employee handbooks and HR policies to determine if DE&I is a focus for the company.

A New Mandate for M&A: Diversity, Equity, and Inclusion: This report from Deloitte outlines how DE&I has become a required diligence item for M&A transactions. Whether you take the report to encourage your later stage portfolio, or to update your own due diligence, the report provides thoughtful and tactical DE&I resources.

Make this Checklist your DE&I Launching point: This article from SHRM provides a great starting point for both current portfolio companies and for evaluating investment opportunities.

ESG Due Diligence Questionnaire: This report from Invest Europe focuses on the Private Equity industry in Europe, but provides helpful guidance across all three facets of ESG compliance.

Sample Questions for Pre-Investment Due Diligence
– Does your company have a Diversity, Equity, and Inclusion policy?
– Do you track metrics relating to race, gender, or other characteristics of underrepresented communities across your employee base?
– When sourcing candidates for open positions, does your company take measures to ensure a diverse applicant pool and/or work with recruiters and consultants to prioritize underrepresented communities?
– Does your executive leadership team have any variable or bonus compensation tied to DEI goals or objectives?

Term Sheet Conditions
As venture funds aim to codify their DE&I practices, term sheet conditions are increasing in prevalence. The following provides language for firms interested in establishing DE&I as a term sheet requisite.

“[Fund Name] seeks investment opportunities in companies that endeavor to create a diverse, equal, and inclusive work environment. Within 90 days of the closing, we require the Company to institute a Diversity, Equity & Inclusion (DEI) policy and utilize best efforts hiring a diverse team, providing equal and fair treatment for all team members, and ensuring a workplace environment where all team members feel valued and have the opportunity to fully participate in creating business success. This policy will be reviewed on an annual basis by the Board, with guidance and feedback provided to the executive management team.” – MVCA Member Fund

“In order to advance diversity efforts in the venture capital industry, the Company and the lead investor, [Fund Name], will make commercial best efforts to offer and make every attempt to include as a co-investor in the financing at least one Black [or other underrepresented group including, but not limited to LatinX, women, LGBTQ+] check writer (DCWs), and to allocate a minimum of [X]% or [X] $’s of the total round for such co-investor.”Cooley

“[Fund Name] strives to invest in companies that consciously work to create a diverse, equal and inclusive work environment. As a condition of the Closing, we require that you institute a Diversity, Equity & Inclusion (“DEI”) policy to encourage hiring of a diverse team, provide equal and fair treatment for all team members, and ensure a workplace environment where all team members feel valued and have the opportunity to fully participate in creating business success. This DEI policy shall (1) require that at least one woman and/or member of an ethnically underrepresented group within the Company be formally interviewed for any open position, (2) shall institute a policy of equal pay and benefits regardless of gender and ethnicity or other protected group, and (3) shall put in place an inclusivity plan to educate employees on unconscious bias and to promote an inclusive work environment.” – Non-MVCA Member Fund

VC Pledge
Interested in taking your DE&I commitment to the next level? Consider making a pledge, committing to actively increasing DE&I efforts and measuring outcomes within your fund, portfolio, and broader community. See below for resources to help you draft a pledge.

The Pledge LA: A pledge written by an alliance between LA’s venture capital community, Annenberg Foundation, and the Office of Mayor Eric Garcetti.
Base10’s Pledge: San Francisco based fund with $1.3B AUM.
University of Pennsylvania Research: The University of Pennsylvania law school conducted research on the impact of VC pledges and the importance of a holistic DE&I effort.


MVCA is always interested in seeking out additional resources that would benefit the ecosystem. If you have suggestions or additional resources that would be helpful for our DEI initiatives, please contact Ara Topouzian, Executive Director at [email protected]