Several big-named VC firms — including Sequoia, GGV Capital, and Sapphire Ventures — have joined a new program from All Raise to get more people from diverse backgrounds on the boards of fast-growing tech companies.
All Raise is the organization cofounded by famous investor Aileen Lee to help more female VCs, founders and diverse candidates get into tech deals. The new program is called Board Xcelerate.
The idea came from a dinner hosted by Lee at her house in the summer of 2019. Jeff Richards, managing partner at GGV Capital, and, All Raise CEO, were seated next to each other talking about the number of open board seats that go unfulfilled year after year. The two-hour conversation led to several brainstorming sessions about solving the board diversity problem.
In recent months, the issue of diverse boards has become even more critical.
"Competition for this talent is fierce thanks to lots of different initiatives that are going on from Nasdaq to the Goldman Sachs initiative to California's legal mandates. So there's a lot of momentum pushing people towards diversity," said All Raise CEO Pam Kostka.
Specifically, in September, California's Governor Gavin Newsom signed into law a bill that requires publicly held companies headquartered in the state to include board members from underrepresented communities. Goldman Sachs similarly announced that it would not offer its services to private companies looking to go public unless the company has at least one diverse member on its board. And in December, the Nasdaq proposed that companies on its exchange have at least one female board on their board, or risk being delisted.
Board Xcelerate charges fees starting at $55,000 for a three-month search, but the price could increase depending on the stage of the company and the type of executive needed for the job. For example, there's an option for a candidate with go-to-market expertise, and another for someone with an audit and finance background for startups that are preparing for an exit.
This is not the first and only such program: theBoardlist was founded by Silicon Valley tech investor Sukhinder Singh Cassidy in 2015 and has helped over 2,000 companies with their board searches for diverse candidates, particularly women, it recently told Insider. It just raised a $2 million seed fund, its first ever venture investment, to help it expand to ramped up demand. theBoardlist charges $10,000 to $20,000, depending on the size of the company doing the hiring.
While Xcelerate's fees may seem high in comparison, those fees are actually less than the cost of a traditional board search which can run $100,000 or more, according to All Raise.
"I will tell you that I have offered several times to cover the fee and every single time the entrepreneur has said, 'don't worry about it,' because they know it's important and should be part of the company's operation," said investor Richards.
"And frankly it's less expensive than what they're spending on their typical executive search," he added.
Through its initial pilot, Board Xcelerate has already placed five executives onto independent boards. One match was former Ancestry CEO Margo Georgiadis who recently joined the boards of both Handshake and WorkBoard through the program.
"I think we're going to be able to place, eventually, hundreds and hundreds of talented people onto these boards that would've probably never otherwise had those opportunities," said GGV's Richards.
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