NYCEDC Releases Inaugural Diversity Report to Celebrate One Year of Venture Access Alliance

The Report Analyzes Representation within NYC's Venture Capital and Startup Ecosystems and Highlights the Impact of the Venture Access Alliance (VAA) to Date

The Venture Access Alliance is Now a Coalition of Over 100 NYC Startup Investors Who Have Joined to Increase Diversity and Inclusion Within the Growing NYC Tech Industry

Additionally, The Report Highlights the Progress Accomplished to Date by the Alliance and Founder Fellowship Program

NEW YORK, NY-New York City Economic Development Corporation (NYCEDC) today announced the release of Venture Access NYC: Building an Inclusive Tech and Venture Ecosystem for New York City's Future, a comprehensive report introducing a new independent study of diversity among venture capital (VC) firms in the Venture Access Alliance (VAA), a coalition of startup investors who believe New York City's diversity is one of its greatest strengths and opportunities for growth. The report coincides with the commemoration of the one-year VAA anniversary at the first NYC SEEN Summit, organized by Tech:NYC and Visible Hands to highlight underrepresented voices and ideas in NYC's venture capital and tech ecosystem.

The inaugural Venture Access Alliance Portfolio Diversity Report provides an in-depth examination of investment practices and leadership diversity across VAA members firms with active investments in 2023 and was prepared independently by researchers at the UCLA Luskin School of Public Affairs and commissioned on behalf of NYCEDC by the Annenberg Foundation.

Additionally, the report highlights the progress and milestones accomplished to date by NYCEDC's Venture Access NYC, a suite of programs that aim to build a more inclusive tech and venture ecosystem. One year after launching, the VAA now boasts more than 100 members representing a range of small, medium, and established VC firms, which collectively oversee more than $23.5 billion in assets under management.

"Diversity is New York City's superpower, and through the Venture Access Alliance, EDC is using that superpower to supercharge our economy," said NYCEDC President & CEO Andrew Kimball. "In its first year of existence, the Venture Access Alliance has grown to over 100 firms who recognize that an investment strategy that prioritizes diverse entrepreneurs leads to strong financial returns and a strong city."

"Queens is on the verge of becoming the next great international technology and innovation hubs, thanks to our shared work to correct demographic inequities in the tech industry that has held our communities and our overall potential back for generations," said Queens Borough President Donovan Richards Jr. "The work being done through the Venture Access Alliance to uplift our city's diverse startups will pay dividends for generations. I look forward to working with this group and the NYC Economic Development Corporation to advance these goals and help our city create jobs, foster innovation and reach its potential."

"Funding should support founders who reflect the diversity of our city, so the tech sector can develop solutions that truly address New Yorkers' needs. The Venture Access Alliance's progress in driving diversity and inclusion - and this report shows progress, but highlights just how much work there still is to do to ensure equitable access to capital and leadership opportunities across our city if we are truly going to be an innovative tech hub," said New York City Councilmember Jennifer Gutiérrez.

"I congratulate the New York City Economic Development Corporation and the Venture Access Alliance on an impactful first year, with their inaugural diversity report showcasing New York City's venture capital industry as a national leader in diversity and inclusion," said Council Member Farah N. Louis, Chair of the Committee on Women and Gender Equity. "As our city continues to make progress in leveling the playing field for M/WBE start-ups, the report earnestly reports on the gender disparities in venture funding, with only 7 percent of total dollars invested by VAA firms going to women-led companies in 2023, and the need to elevate Black and Latinx founders in order to close gaps in our city's venture capital ecosystem and tech ecosystem. I applaud the VAA for its leadership in making progress on these trends and for charting a path toward a more equitable economy in New York City."

2024 Venture Access Alliance Portfolio Diversity Report

The 2024 Venture Access Alliance Portfolio Diversity Report provides an in-depth examination of investment practices and leadership diversity across the 72 VAA member firms with active investments as of 2023. Key findings include:

• 29 percent of VAA firms have diverse leadership, 32 percent have a diversity-focused investing thesis, and 44 percent have one or more women as general or managing partners.
• VAA firms outpace national averages when it comes to investing in women-led startups, which constitute nearly 24 percent of portfolio companies, and diverse-led startups, which constitute nearly 40 percent of portfolio companies.
• VAA firms demonstrate a strong commitment to investing in NYC-based companies, with over 60 percent of all investments made in companies across the five boroughs.
• VAA firms with diverse leadership or a diversity investing thesis are more likely to invest in diverse-led companies, which constitute 61 percent of their investments, compared to traditional VCs (40 percent).
• VAA firms with women leadership are more likely to invest in gender-diverse companies, which constitute 44 percent of their investments, compared to traditional VCs (27 percent).

While the report highlights key areas where New York City's venture capital industry stands as a national leader in diversity and inclusion, it also calls attention to areas for further improving access, including the underrepresentation of Black and Latinx founders among VAA portfolio companies when compared to the city's diverse population, and the notable gender disparities in total venture funding invested. Additional findings included:

• While 24 percent of VAA portfolio companies were women-led in 2023, only 7 percent of total dollars invested by VAA firms went to women-led companies.
• When considering deal stage, while early-stage investments are more accessible for women- and diverse-led companies, there is a notable decrease in later-stage investments going to these companies, highlighting a potential barrier to growth and scaling for underrepresented founders.
• Additionally, the report finds a disproportionate distribution of VC activity across the five boroughs, with 50 percent of VAA investments in NYC-based companies concentrated in Manhattan.

"New York City's diversity is what sets New York apart from other tech hubs, and the Venture Access Alliance helps us build on this strength by fostering a more equitable tech industry," said Julie Samuels, President and CEO of Tech:NYC. "As we celebrate the first year of the Venture Access Alliance and recognize some of New York's most promising underrepresented founders at the inaugural SEEN Summit this year, we know that much work remains to build a truly diverse and representative tech ecosystem here. We look forward to continuing the work alongside VAA to help connect underrepresented founders to the capital they need in order to grow their businesses."

"The Venture Access Alliance has been instrumental in elevating AlleyCorp initiatives to new heights, including our program and $1 million Peerless pitch program aimed at supporting founders of all backgrounds. The connections I've built through this group have been pivotal in scaling impactful programs designed to drive capital to diverse founders and create meaningful change," said AlleyCorp Operating Partner Desiree Almodovar.

"Gold House Ventures is thrilled to be partnering with the Venture Access Alliance to create unique programs and networks for entrepreneurs from diverse backgrounds. As an operator of NYC EDC's Founder Fellowship, our team is committed to growing NYC's vibrancy as an entrepreneurial hotbed, alongside VAA's invaluable work to promote access to opportunity and capital," said Megan Ruan & Oscar Wong, Gold House Ventures.

"New York City has long been an epicenter of innovation," said Gayle Jennings O'Byrne, CEO of Wocstar Capital. "With the support of the Venture Access Alliance, Wocstar Capital and our VC contemporaries are collaboratively driving the city's transformation into a hub of inclusive capital. I couldn't be prouder!"

The VAA was launched with Fred Wilson of Union Square Ventures and Jarrid Tingle of Harlem Capital as Co-Chairs, and with partnership and support from the Ford Foundation, Annenberg Foundation, and Tech:NYC. It is inspired by successful public-private initiatives including PledgeLA, launched in 2018 by the Annenberg Foundation and the City of Los Angeles. The VAA has hosted more than a dozen industry convenings throughout NYC, establishing important VC collaborations on programs like AlleyCorp's $1 million PEERLESS Competition for diverse founders, Primary Venture Partners' Factor Fellowship connecting top talent to startup careers, and Commonweal Ventures' VC Fellowship with CUNY's City College.

Additionally, the report highlighted key milestones reached in NYCEDC's Founder Fellowship, a program launched in 2022. Through accelerator cohorts operated by NYCEDC's tech and venture industry partners, each year the Founder Fellowship identifies and supports diverse NYC-based entrepreneurs in accessing the resources and networks needed to scale their startups. Some key milestones include:

• Graduated more than 250 founders across 168 tech startups since launching in 2022.
• To date, more than two-thirds of Fellow teams have included female founders, and nearly 80 percent have included Black, Latinx, and/or Asian founders.
• Fellow teams have collectively raised more than $22 million, hired over 100 employees, and increased their combined valuation by at least $161 million during their three-to-six-month Fellowship cohorts.

Applications for the 2025 Founder Fellowship launched in October 2024 and are currently open through December 6, 2024.

Expanding beyond its flagship programs, Venture Access NYC now includes the soon to launch Startup and VC Internship Programs, which will provide New York City students with on-ramps to meaningful exposure and paid work experiences at local tech startups and VC firms, additional support for Founder Fellow program alumni, and includes future plans to expand the impact of the Venture Access Alliance.

New York City is the world's second-largest tech and startup ecosystem, with more than 25,000 tech-enabled startups, over 360,000 jobs, a startup ecosystem valued at $694 billion, and more than 1,200 active venture capital and other investment firms. Given the rapid and continued growth across tech and venture businesses, employment, and wages, NYC's tech sector remains one of the best opportunities for New Yorkers seeking middle- and high-wage jobs.

About NYCEDC
New York City Economic Development Corporation is a mission-driven, nonprofit organization that works for a vibrant, inclusive, and globally competitive economy for all New Yorkers. We take a comprehensive approach, through four main strategies: strengthen confidence in NYC as a great place to do business; grow innovative sectors with a focus on equity; build neighborhoods as places to live, learn, work, and play; and deliver sustainable infrastructure for communities and the city's future economy. To learn more about what we do, visit us on Facebook, Twitter, LinkedIn, and Instagram.

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