Diversity as a source of alpha



Talent is equally distributed, opportunity is not. For the impact investor, that’s an “alpha” opportunity.

“Ability and intelligence cut across race, sex and gender orientation, but opportunity (and you can fill in access to capital) does not,” writes Big Path Capital’s Michael Whelchel in American Banker. “This is an arbitrage play for those who identify talent that the majority of the VC community has discounted and overlooked.”

Opportunity №1: Only 2% of $60 billion in venture capital investments last year went to women-run companies. “But studies show female chief executives in the Fortune 1000 drive three times the returns as S&P 500 enterprises run predominantly by men,” says Whelchel.

Opportunity №2: Just 0.2% of venture deals between 2012 and 2014 went to black female founders, the fastest-growing group of entrepreneurs in the country today, says Whelchel. Black women started more than 1.5 million businesses, generating more than $44 billion a year in revenue, he says.

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