The chance that I am ever willing to commute on a regular basis again in the future is zero. It’s too inefficient. And while workers and employers are somewhat split on where they stand on the question of remote toil, the COVID-19 pandemic has permanently shaken up the working world; we’re not going back to the pre-COVID normal.

To support what could be droves of workers sticking to distance-labor instead of returning to offices, Firstbase is building a software-and-hardware solution to quickly get remote workers the tools and support they need. And today the company announced that it closed a $13 million Series A led by Andreessen Horowitz. B Capital Group and Alpaca VC also put capital into the round; TechCrunch first caught wind of Firstbase when it took part in an Acceleprise accelerator cohort in mid-2020.

Notably Firstbase didn’t start with its current product focus. As is common amongst startups, it was born as something else entirely. With an original fintech bent, the company went remote back in 2018. But the experience wasn’t stellar, Firstbase co-founder and CEO Chris Herd told TechCrunch. It was hard to get workers the technology they needed, and hard to get it back if they left the company, he explained.

Later, with the fintech effort low on capital and time, the company realized that some internal tech it had built to help support remote staff’s hardware and software needs might have broader application. Firstbase pivoted in late 2019, and by March of 2020 Herd told TechCrunch that his company had 600 companies on its waitlist. That number has since multiplied.

The company’s product is two-fold. It’s a software service that helps companies track and manage their hardware assets that remote workers use. And it’s a hardware service that can pre-install software on hardware and ship it to employees, and provide remote IT support. Notably customers can either use Firstbase’s software alone, which they pay for on a SaaS basis, or both its software and hardware offerings.

Firstbase has two sources of gross margin. Its software business will generate obvious software incomes, and the company can extract gross profit from its hardware business, Herd explained. The hardware part of the startup’s model appears more nascent than the software component. Firstbase only began onboarding customers last November, making it a yet-nascent startup that is allowed to still be figuring things out.

TechCrunch asked Herd what it costs to kit out a remote worker today. He said that it varied, but could land between $2,000 and $5,000, though he added that Firstbase will allow customers to pay those costs over time as a series of flat payments.

What’s ahead for the company? Per its CEO, the merely 10-person company, three of whom are part-time, would like to grow its staff by four or five-fold this year. And unsurprisingly, Firstbase intends to hew to its remote roots, meaning that it won’t be looking for workers in a single geographic region. Some of the staff it intends to hire will be in its sales org, a focus that Herd mentioned during our interview. The company will also build out more enterprise-friendly software features with its new capital, allowing it to target larger customers.

Let’s see how far Firstbase can scale with its Series A. And if it gets pre-empted before the year ends.

PreShow Interactive is giving gamers a new way to earn in-game currency in exchange for watching ads — a concept that’s become familiar in mobile games but hasn’t really made much headway on PCs or consoles.

The startup is led by MoviePass’ founding CEO Stacy Spikes. When I spoke to Spikes about PreShow two years ago, he was beta testing an app that provided users with free movie tickets in exchange for watching ads. But obviously, theatrical moviegoing has taken a big hit in the past year.

Spikes told me yesterday that he’d always hoped to bring the PreShow concept to four categories — theatrical movies, gaming, subscription streaming and video on demand — but the pandemic forced the startup to shift focus more quickly than expected and explore what a gaming experience might look like.

The current plan is to launch a new PreShow Interactive app this summer, where viewers can connect their in-game accounts and identify how much virtual currency they want to earn. Then they watch a package of ads and PreShow will automatically transfer the currency to their account — in other words, it’s buying the currency for them.

Users will have to download a separate app to watch the ads and get the benefits, but Spikes said this is actually better than trying to integrate advertising or branded content into the game itself, which can be a slow process for the developer and the advertiser, while also being distracting for the players. And this means PreShow Interactive should be able to support 20,000 games at launch, across PCs, consoles and virtual reality.

“We just didn’t see the purpose of spending the time on integrations when it’s not really necessary,” he added. “Our deal is only with the consumer for their time. We’re saying, ‘This is your time. It has value.’ ”

One of the key elements to Preshow’s approach is technology that can detect when the viewer is actually looking at their phone screen — the ads will stop playing if you turn away. This has been criticized as “creepy surveillance tech,” but Spikes claimed that early PreShow users have embraced it. He also argued that it’s more transparent than the data collection and targeting currently driving online advertising.

“We used to think data was the new oil, but now our feeling is that permission and engagement and attention is the new oil,” he said.

In addition to revealing its new strategy, PreShow is announcing that it has raised $3 million in seed funding led by Harlem Capital, with participation by Canaan Partners, Wavemaker Partners, Front Row Fund, ROC Fund, BK Fulton and Monroe Harris.

And to be clear, Spikes said PreShow isn’t abandoning theatrical movies. He said that the PreShow app will eventually offer both movie and gaming deals “under one roof,” but brands aren’t currently eager to advertise to moviegoers.

“We’re ready to go when the marketplace is ready to go,” he said.

 

Every developer relies on environments like testing, staging and production as they build software, but building them can be a time-consuming operation. ReleaseHub, an early-stage startup that was part of the Y Combinator Winter 2020 cohort, wants to change that by providing a service to make environments available on demand.

Today, the company announced a $2.7 million seed round, and also announced that service is generally available while they were at it. Sequoia led the round, with participation from Y Combinator, Rogue VC, Liquid Capital and unnamed angel investors.

Company co-founder and CEO Tommy McClung says that every developer in the world has to use environments in their development workflow, but it remains for the most part a manual process.

“All of those environments are incredibly difficult to build. So the problem we’re solving is the ability to create those on demand. Instead of having to have a DevOps team that is responsible for managing, creating and maintaining them, the software does that and you can instantaneously create them,” McClung told me.

The service is integrated into GitHub and BitBucket, so you can build the environments on the fly as you need them based on templates for the various types. “The real value that we’re bringing to the table here is that we’re bringing that together in an almost virtualized way so that you can reproduce these environments on demand,” he said.

McClung who has been working in technology for over 20 years, says this is a problem he’s seen over and over again at the various companies at which he’s worked. After running engineering at TrueCar, his most recent company, he decided to build a startup to solve the problem once and for all.

He notes that this is the second time he’s been a YC company and, while the size and scope of the operation has changed since he last participated in 2009, the process remains much the same. For starters, there were 20 companies involved back then, and more than 200 this time around, but he says by breaking it down into smaller groups, it helped create the same feel.

The company launched at the beginning of last year, and spent the year building the product and working with design partners and beta customers ahead of today’s release. The plan is to offer a subscription service where companies pay by the number of environments they create.

ReleaseHub currently has 10 employees, including the three founders, with plans to add more, especially engineers to help continue building out the solution and adding more layers of functionality. As he does this, McClung says bringing in a diverse group of employees is a priority for the founding team.

“I mean I’ve been building companies for a long time and it has to be embedded into the DNA of the company at the very earliest stages, so making sure that you have diverse talent [from the start],” he said.

He says the plan is to stay 100% remote even after offices open again. “We were forced into being remote and actually we made it work really well for us. You know in a lot of ways it’s advantageous for work-life balance,” he said.

Erase All Kittens (EAK) is an edtech startup that created a “Mario-style” web-based game designed for kids aged 8-12. However, the game has a twist: it places an emphasis on inspiring girls to code (since, let’s face it, most coding tools are created by men). After reaching 160,000 players in more than 100 countries, it’s now raised a $1 million seed funding led by Twinkl Educational Publishing, with participation from first investor Christian Reyntjens of the A Black Square family office, alongside angel investors, including one of the founders of Shazam.

While the existing EAK game is free, a new game launched in July will be paid for, further boosting the product’s business model.

EAK says its research shows that some 55% of its players are girls, and 95% want to learn more about coding after playing its game. EAK is currently being used in over 3,000 schools, mostly in the U.K. and U.S., and its traction increased by 500% during the lockdowns associated with the pandemic.

It’s Erase All Kittens’ contention that coding education tools for children have been largely built by men and so naturally appeal more to boys. With most teaching repetitive coding, in a very rigid, instructional way, it tends to appeal more to boys than girls, says EAK.

The female-founded team has a platform for changing the perception that kids, especially girls, have of coding. After R&D of two years, it came up with a game designed to teach kids and girls as young as eight skills such as HTML, CSS and JavaScript through highly gamified, story-driven gameplay. Kids get to chat with characters on their journey, for example, a serial entrepreneur unicorn mermaid called Tarquin Glitterquiff.

“Players edit the code that governs the game environment, building and fixing levels as they play in order to save kittens in a fantasy internet universe,” said Dee Saigal, co-founder, CEO and creative director. Saigal is joined by co-founder Leonie Van Der Linde; CTO Rex Van Der Spuy; Senior Games Developer Jeremy Keen; and 2D Games Artist Mikhail Malkin.

The existing game teaches HTML skills and how to create URLs, and the new game (released in July this year) will teach HTML, CSS and JavaScript skills — bridging the huge gap between kids learning the concepts and being able to create on the web like developers.

Said Saigal: “We’re designing a coding game that girls genuinely love — one that places a huge emphasis on creativity. Girls can see instant results as they code, there are different ways to progress through the game and learning is seamlessly blended with storytelling.”

Saigal said: “When I was younger I wanted to be a games designer. I loved coming up with ideas for games but coding had always seemed like an impossible task. We weren’t taught coding at school, and I couldn’t see anyone who looked like me making games, so I didn’t think it was something I could do.”

“Whilst researching our target audience, we found that one of the biggest obstacles for girls still begins with gender stereotypes from an early age. By the time girls reach school, this snowballs into a lack of confidence in STEM skills and lower expectations from teachers, which in turn can lead to lower performance — a gap that only widens as girls get older.”

EAK’s competitors include Code Kingdoms, Swift Playgrounds and CodeCombat. But Saigal says these games tend to appeal far more to boys than to girls.

The new game (see below) will be sold to schools and parents, globally. EAK will also be carrying out a one-for-one scheme, where for every school account purchased, one will be donated to underserved schools via partnerships with tech companies, educational organizations and NGOs.

Jonathan Seaton, co-founder and CEO at Twinkl and director of TwinklHive, said: “We’re really excited to partner with Erase All Kittens, as a digital company Twinkl recognizes the importance of preparing children to succeed in the digital age and we believe through this partnership we can really make a difference.”

“The team is particularly excited about helping further Erase All Kitten’s mission to empower girls and give them the same opportunities to learn to code and build their own digital creations. Ensuring that all children have equal access to opportunities to learn is at the heart of Twinkl’s vision and a key motivation in the development of this partnership for both organizations.”

Erase All Kittens says it is addressing the global skills gap, where the gender gap is increasingly widening. According to PWC, just 24% of the tech workforce is female and women make up just 12% of all engineers, while only 3% of female students in the UK list tech as their first career choice.

Research by Childwise found that 90% of girls give up on coding after first trying it, and if they lose interest in STEM subject by the age of 11, they never recover from that. This is a huge and growing problem for the tech industry and for investors.

Taking on Amazon S3 in the cloud storage game would seem to be a fool-hearty proposition, but Wasabi has found a way to build storage cheaply and pass the savings onto customers. Today the Boston-based startup announced a $112 million Series C investment on a $700 million valuation.

Fidelity Management & Research Company led the round with participation from previous investors. It reports that it has now raised $219 million in equity so far, along with additional debt financing, but it takes a lot of money to build a storage business.

CEO David Friend says that business is booming and he needed the money to keep it going. “The business has just been exploding. We achieved a roughly $700 million valuation on this round, so  you can imagine that business is doing well. We’ve tripled in each of the last three years and we’re ahead of plan for this year,” Friend told me.

He says that demand continues to grow and he’s been getting requests internationally. That was one of the primary reasons he went looking for more capital. What’s more, data sovereignty laws require that certain types of sensitive data like financial and healthcare be stored in-country, so the company needs to build more capacity where it’s needed.

He says they have nailed down the process of building storage, typically inside co-location facilities, and during the pandemic they actually became more efficient as they hired a firm to put together the hardware for them onsite. They also put channel partners like managed service providers (MSPs) and value added resellers (VARs) to work by incentivizing them to sell Wasabi to their customers.

Wasabi storage starts at $5.99 per terabyte per month. That’s a heck of a lot cheaper than Amazon S3, which starts at 0.23 per gigabyte for the first 50 terabytes or $23.00 a terabyte, considerably more than Wasabi’s offering.

But Friend admits that Wasabi still faces headwinds as a startup. No matter how cheap it is, companies want to be sure it’s going to be there for the long haul and a round this size from an investor with the pedigree of Fidelity will give the company more credibility with large enterprise buyers without the same demands of venture capital firms.

“Fidelity to me was the ideal investor. […] They don’t want a board seat. They don’t want to come in and tell us how to run the company. They are obviously looking toward an IPO or something like that, and they are just interested in being an investor in this business because cloud storage is a virtually unlimited market opportunity,” he said.

He sees his company as the typical kind of market irritant. He says that his company has run away from competitors in his part of the market and the hyperscalers are out there not paying attention because his business remains a fraction of theirs for the time being. While an IPO is far off, he took on an institutional investor this early because he believes it’s possible eventually.

“I think this is a big enough market we’re in, and we were lucky to get in at just the right time with the right kind of technology. There’s no doubt in my mind that Wasabi could grow to be a fairly substantial public company doing cloud infrastructure. I think we have a nice niche cut out for ourselves, and I don’t see any reason why we can’t continue to grow,” he said.

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Kenyan consumer experience platform for businesses in Africa, Ajua today announced that it has acquired WayaWaya, a Kenya-based AI and ML messaging and payments company.

WayaWaya’s customers and partners include the likes of I&M Bank, Interswitch and MTN. The company offers a range of services, from digital banking and payment services to financial services APIs and payment bots.

According to Ajua, the acquisition is primarily focused on WayaWaya’s payments bots system known as Janja. The platform, which has customers like Airtel, Ezee Money, Housing Finance Company of Kenya (HF Group), enables borderless banking and payments across apps and social media platforms. Teddy Ogallo, the entrepreneur who founded WayaWaya, joins Ajua as VP of Product APIs and Integrations.

Per Crunchbase, WayaWaya has just raised $75,000. Although the two companies did not disclose the financial details of the acquisition, Ajua is expected to have paid 10 times more than WayaWaya’s total raise.

Ajua, formerly mSurvey, was founded in 2012 by Kenfield Griffith. The company is solving a consumer data problem for African businesses to understand their business better and drive growth.

“There’s a lot of commerce happening on the continent and Ajua wants companies to move from transaction numbers to the customers behind such transaction,” Griffith told TechCrunch. “Imagine if we knew what drove consumer habits for businesses. I mean, that’s a huge exponential curve for African businesses.”

Nigeria’s SME market alone is valued at $220 billion annually. And while businesses, mostly big enterprises, can afford customer communication tools, a large segment of small businesses are being left out. Ajua’s play is to use data and analytics to connect companies with their customers in real time. “We’ve taken what makes enterprise customers successful, and we’re capturing it in a simple format so SMEs can have the same tools,” Griffith added. 

Since most consumer behavior for these SMEs happens offline, Ajua gives businesses unique USSD codes to receive payments, get feedback and offer discounts to their customers. It is one of the products Ajua has launched over the years for customer feedback at the point of service to businesses that cumulatively have over 45 million customers.

The company’s partners and clients also include Coca-Cola, FBNQuest, GoodLife Pharmacy, Java House, Safaricom, Standard Chartered and Total.

As an intelligent messaging bot, Janja is used by individuals and businesses across WhatsApp, Facebook Messenger and Telegram to automate customer support and make cross-border payments. So, Janja’s integration into Ajua’s product stack will close much of the acquirer’s customer experience loop by automating responses and giving customers what they want, when they want it.

This acquisition comes a month after Ajua announced that it partnered with telecom operator MTN Nigeria to launch a customer management product for Nigerian businesses. The product called MTN EnGauge carries the same features present in Ajua but, in this case, is tailored solely for businesses using the MTN network. The roll-out is expected to generate more data for Ajua’s thousands of users. It will also be upgraded to incorporate Janja and other services.

In hindsight, it appears Ajua could have created a product like Janja in-house due to its vast experience in the consumer experience space. However, the company chose an acquisition and Griffith gave two reasons why — building a similar product would have taken a long time and Ogallo seemed to know Janja’s business and operations so well, it just made sense to get him on board. 

“Teddy was going the same direction we’re going. We just thought to acquire WayaWaya instead and make a really good company out of both products attempting to solve the same problem. To me, it’s all about solving the problem together rather than going alone,” said the CEO. 

On why he accepted the acquisition, Ogallo, who now has a new role, noted that Ajua’s ability to scale customer service and experience and also help businesses was one reason and earned admiration from him. “Seeing how WayaWaya’s technology can complement Ajua’s innovative products and services, and help scale and monetize businesses, is an exciting opportunity for us, and we are happy that our teams will be collaborating to build something unique for the continent,” he added. 

This is a solid infrastructure play from Ajua coming from a founder who is a massive advocate of acquisition and consolidation. Griffith believes that the two are strategies for a speedier route to new markets and channels in Africa. 

“I think there are lots of ways we can build the ecosystem. There are lots of young talent building stuff, and they don’t have access to capital to get to the next stage. The question is if they want to race to the finish line or take off time and get acquired. I think there’s a huge opportunity in Africa if you want to solve complex problems by acquisition.”

There has been an uptick in local acquisitions in Africa from startups within a single country and between two countries in the past three years. For the former, Nigerian recruitment platform Jobberman’s acquisition of NGCareers last year comes to mind. And there are pan-African instances like Lagos-based hub CcHub’s acquisition of iHub, its Nairobi counterpart; Ethiopian software provider Apposit sell-off to Nigerian fintech Paga; and Johannesburg-based fintech MFS Africa acquiring Uganda’s Beyonic.

The common theme among the acquisitions (and most African acquisitions) is their undisclosed sums. For Ajua, Griffith cited regulatory issues as one reason why the company is keeping the figure under wraps.

Since launching nine years ago, Ajua has raised a total of $3.5 million, according to Crunchbase. Given the nature of this acquisition and partnership with MTN, the company might set sights on another fundraise to scale aggressively into Nigeria (a market it entered in 2019) and other African countries.

The COVID-19 pandemic threw remote work into the spotlight, but tech companies have hired in other locations for years to deal with talent shortages. Arc announced today it is opening its remote hiring platform to all software developers. Previously, Arc was open only to developers who passed its verification process. Developers can still get verified to stand out from other applicants, but Arc’s job database and search engine is now available to everyone.

Arc was launched two years ago by the team behind Codementor, an online education platform for software developers. Since then, Arc has been used by companies like Spotify, Hims, Hubspot and FiveStars for hiring. Its investors include Techstars, 500 Startups, WI Harper and Y Combinator.

“As proud as we are of impact we have made for developers, we really want to scale that impact, and that’s why we decided to create a much more open product experience,” founder and chief executive officer Weiting Liu told TechCrunch.

The new version of Arc centers around two features: its smart remote job search engine and developer community. Arc crawls job boards and other sites for its database and has so far aggregated 54,000 developer openings from 13,000 companies. Then its search engine removes some of the challenges associated with searching for remote work.

“For example, one common complaint is that a lot of jobs are remote, but U.S. only. Or it’s only remote until the end of the pandemic,” Liu said. “Our algorithm will do its best based on your circumstances. For example, if you are a developer based in Asia or in Eastern Europe, there are certain job opportunities that are unfortunately not applicable to you based on the time zones. So we filter all of those things, and also based on your experience and tech stacks, to recommend the most relevant jobs.”

Arc Community is a resource for software developers who are new to remote work or want to learn about work practices in other countries. For example, “they might have questions like, should my resume be in this format for a U.S.-based employer, or what are the types of tools used and cultural norms?” Liu said. “If someone is looking for a position with an American company, we will talk about common interview practices or even basic work practices like how many companies use Slack. That’s where the community comes in and we want to enable developers who have already been working remotely to share their experiences.”

Even though it is now optional, Arc still recommends its verification process. It typically takes about a week, and includes a coding challenge and behavioral and technical interviews with an Arc team member. Even if someone doesn’t pass, they get feedback about where they can improve and can reapply in six months. Verification and job searches are free, and Arc monetizes by charging employers for hires through its platform.

In addition to its community, Arc recently launched a program called Elevate. Inspired by Liu’s experiences in Y Combinator and Techstars, Elevate is meant to be a “short-term talent accelerator” for developers who want to transition into remote work. Its first program included 13 developers from Latin America and future cohorts will range in size from 10 to 20 people. The program includes career preparation workshops, interview practice and live mentorship sessions with developers who work at GitLab, Zapier and Dialpad.

Arc is currently running a crowdfunding campaign, started after the SEC implemented its new equity crowdfunding regulations, and has raised about $950,000 so far.

“This is aligned with our vision, which is about democratizing access, so if we can make Arc a partially community-owned remote job platform, it will be extremely interesting because we aspire to become the world’s largest remote job site and if we can turn our community members into investors-slash-owners of the platform, it can help us realize our mission faster,” said Liu.

Almost two centuries ago, gold prospectors in California set off one of the greatest rushes for wealth in history. Proponents of socially conscious investing claim fund managers will start a similar stampede when they discover that environmental, social and governance (ESG) insights can yield treasure in the form of alternative data that promise big payoffs — if only they knew how to mine it.

There may be some truth to that line of thinking if you take some of the rhetoric and advertising out of the equation.

First, let’s be clear: ESG is not on the fringe. The European Union has implemented new financial regulations via the Sustainable Finance Disclosure Regulation (SFDR). These improve ESG disclosures and considerations and help to direct capital toward products and companies that benefit people and the planet. As we write, the U.S. Securities and Exchange Commission is also considering drafting and implementation of ESG-related regulations.

Whether enacted or currently under consideration, these rules encourage fund managers to integrate sustainability risks into their business processes, report on them publicly, stamp out greenwashing, and promote transparency and knowledge among investors. Accordingly, it will become easier to compare firms’ sustainability efforts, too, allowing stakeholders from all corners to make more informed decisions.

Incorporating ESG factors into investment strategies is not new, of course. The world’s largest asset managers have been practicing it for years. According to the Governance & Accountability Institute, 90% of companies listed on the S&P 500 now produce sustainability reports, an increase of 70 percentage points from more than a decade ago.

Yet some are still groaning about adopting an ESG investing mindset; they see ESG as a nuisance that detracts from their mission of earning high returns. But could this mindset mean they are missing important opportunities?

Don’t wait

Waiting for new mandatory ESG reporting and compliance framework standards in the U.S. puts Americas-focused managers at a significant disadvantage. Fund managers can start gaining insights today from alternative data originating in ESG-related data stemming from climate change, natural disasters, harassment and discrimination lawsuits, and other events and information that can be mined.

Let’s be clear: The venture capital industry has lacked diversity. The good news is the industry is working to improve itself.

To begin with, as an industry, venture capital can only improve what we measure. In 2016, we set out to develop a rigorous methodology for tracking progress on diversity, equity and inclusion (DEI) in venture capital, and to measure and benchmark those data through our biennial VC Human Capital Survey.

The goals of the survey — powered by the National Venture Capital Association, Venture Forward and Deloitte — are to collect demographic data on the VC workforce across all firm types, sizes, stages, sectors and geographies, as well as trends on firm talent management and recruitment practices. We’ve learned that progress can be slow and seem discouraging, but we’ve also captured evidence that diversity (and firm practices to advance diversity) is increasing in some areas, even as other areas have unfortunately not seen the same pace of change.

We fielded the survey in 2016, 2018 and 2020, and released the outcomes of the third edition last month, featuring data (as of June 30, 2020) collected from 378 firms, a marked increase from 203 participating firms in 2018. Furthermore, more than 145 firms signed the #VCHumanCapital pledge to publicly commit to submitting their DEI data.

At a high level, the data showed that improvements in diversity among investment partners have largely been driven by the hiring and advancement of female investors, while there has been little progress in the equitable representation of Black or Hispanic investment partners.

However, the demographic composition of junior investment professionals reflects greater diversity and wider adoption of diversity-focused talent management and recruitment practices suggest some cause for optimism. The industry still has a long way to go, but here are some of the key insights and changes we identified from the latest survey.

Intentionality associated with improved diversity

More firms are explicitly assigning responsibility for promoting diversity and inclusion internally — 50% of firms have a staff person or team tasked with this responsibility (compared with 34% in 2018 and 16% in 2016). Simultaneously, diversity and inclusion strategies have become more widespread; 43% of firms have implemented a diversity strategy (against 32% in 2018 and 24% in 2016), while 41% have an inclusion strategy (versus 31% in 2018 and 17% in 2016).

This intentionality translates to improved diversity outcomes. Firms with dedicated DEI staff, strategies and programs achieve greater gender and racial diversity on investment teams and among investment partners. The increased emphasis on DEI is also a broader ecosystem trend. More firms report that limited partners and portfolio companies have requested their DEI details over the past 12 months.

Encouraging signs in talent recruitment and development

Venture firms are relatively small and turnover is generally low, but 21% of firms in 2020 reported their number of senior-level investment positions had increased, while 43% said their number of junior-level positions had expanded. Meanwhile, the demographic composition of junior investment professionals reflects higher gender and racial diversity, a positive leading indicator for the diversity of future investment partners.

As overall DEI strategies have become increasingly widespread, more firms have also developed DEI-focused recruitment and hiring programs — 33% of firms have formal programs, while 74% have informal programs, both reflecting steady increases from 2016. Firms were also more likely to report that they typically seek external candidates for open positions than they did in 2018.

However, firms continue to largely rely on internal networks for recruitment, which often encourages homogeneous hiring outcomes. Between the 2018 and 2020 surveys, there was little change shown in the use of narrow recruitment methods to find external candidates; notifying peers in the VC industry (78%) and notifying the firm internally (59%) were the strategies cited most often. The exception was posting on third-party websites like LinkedIn or in newsletters, a strategy reported by 54% of firms in 2020 (a substantial increase from 37% in 2018), which presents one avenue to reach a broader audience of candidates outside of existing networks.

Assessing inclusion remains a challenge

Once talent has come on board, inclusive culture and retention become key metrics of DEI progress. More firms are implementing programs dedicated to leadership development, mentorship and retention, with about two-thirds reporting informal versions of such programs (20 percentage points higher than in 2016) and 20% of firms reporting formal programs.

Assessing inclusion through the VC Human Capital Survey is challenging because we survey one representative per firm, and one person cannot speak to the degree of inclusion felt by others. However, we added a new question to the 2020 survey to gauge how firms themselves are assessing inclusion. While 41% of firms reported having an inclusion strategy, only 26% said they conduct surveys of their employees to assess inclusion.

Subjective factors remain a key consideration in promotions

Well-structured, consistently applied policies for career advancement are critical to ensuring that diverse talent reaches the most senior decision-making levels of the industry. About 20% of firms reported having formal DEI programs focused on promotion (up from 5% in 2016), while 65% of firms have informal programs (compared with 39% in 2016).

Although DEI programs focused on the promotion of employees are more widespread, subjective factors remain a key consideration for promotion decisions, which can lead to unequal and biased outcomes.

Almost all firms reported that “contributions to the performance of the fund” (90%) and “deal origination” (82%) were very important or important factors in considering promotions. However, the factor most often rated highly was “soft skills,” with 94% of firms saying it was very important or important. These types of subjective factors present significant opportunity for unconscious bias to creep in and can detract from the weight given to objective measures more demonstrably relevant to performance.

Maintaining momentum

The results of the third edition of our survey are timely, coming on the heels of a year in which social justice and racial equity have been the subjects of sharp national focus, policymakers have sought to increase access to capital for underserved communities, and the VC industry has shown a renewed focus on DEI. The survey shows where the VC industry’s efforts should be focused and also serves as an important reminder of the intersectional needs of DEI-focused initiatives.

The data show that progress within one demographic element can be more nuanced when considering people who represent multiple marginalized communities (e.g., the percentage of investment partners who are women has steadily increased, but the percentage of investment partners who are women of color has not).

The pace of DEI progress has been slow and uneven in some areas, but there are reasons for optimism. On April 6, NVCA, Venture Forward and Deloitte hosted a discussion with industry leaders to further examine the latest survey results and to address DEI challenges, opportunities and strategies for the industry. More firms are prioritizing these constructive conversations, both within their firms and publicly with industry peers. More firms are acting in a collaborative spirit, adopting thoughtful and concrete DEI strategies and acting with intentionality and urgency.

If the industry can continue to build upon this momentum and commitment around DEI efforts, we can reach a tipping point that will translate to meaningful progress reflected in future editions of the survey.

TechCrunch’s Early Stage 2021 is back for part two of our bootcamp-for-entrepreneurs event, with a focus on marketing and fundraising. Building on the first half of the event in April, this two-day virtual sprint will take place July 8 & 9, and we’re thrilled to welcome Rebecca Reeve Henderson as one of our all-star slate of experts. Rebecca will be joining us to share insight on how to build an effective earned media strategy for your startup, building on her deep expertise developing effective communications programs for some of the top business software companies in the world.

Earned media, aka the kind of exposure you get from a TechCrunch article, is a key element of any startup’s marketing strategy. It’s something that is best used as a complementary component to paid marketing and owned channel promotional efforts, but it’s also one of the trickiest things to get right, especially for first-time founders. Rebecca has worked with companies ranging from Slack, to Shopify, to Zapier, to Canva and many more, helping craft effective earned media strategies in one of the most difficult areas of all: B2B SaaS.

Rebecca is also a founder herself, having built her communications company Rsquared from the ground up into an international business spanning the U.S. and Canada. Rsquared’s clients included startups at all stages of growth, from their very beginnings through to successful exits, including public market debuts, so she’s run effective communications campaigns at every point on the growth spectrum. Then in 2019, Rsquared had its own exit, with an acquisition by global communications firm Archetype.

We’ll hear tips from Rebecca on how earned media contributes to an effective overall communications strategy, and how you go about earning that media — including how to pitch media, and how to build successful long-term relationships with key reporters and publications in your industry.

Tickets for TC Early Stage: Marketing & Fundraising are available until this Friday at the early bird rate which gives you an instant $100 savings! Secure your seat before this weekend!

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