Reach Capital: Addressing Bias in Venture Capital

By Maureen McNichols, Jaclyn Foroughi
2021 | Case No. SI152 | Length 7 pgs.

In May 2020, as the global pandemic intensified, school doors remained closed, and protests around the world ignited in response to the killing of George Floyd, the team at Reach Capital (“Reach”) found itself at a critical juncture. On the one hand, the five-year-old education technology venture firm marveled at the unprecedented acceleration in usage of education technology (“edtech”) products resulting from the shift to remote learning but lamented the exacerbation of socioeconomic divides resulting from uneven access to technology. The May 25 murder of George Floyd further highlighted stark racial divisions—not just in schools but across the country.

With a mission to increase access to opportunity through education, the link between racial equity and socioeconomic mobility was clear. Still, having one of the most authentically diverse investing teams in the industry, Reach’s mission was less of a statement and more of a shared experience. Its Black-, female-, and Latino-led team consisted largely of immigrants, children of immigrants, first-generation college degree holders, educators, and entrepreneurs—all of whom had witnessed first-hand the power of education as a lever for change.

To increase opportunities for diverse learners of all ages, however, the team acknowledged the need to invest in founders who most deeply understood the challenges learners faced, by having lived these challenges themselves. Embarking on a process to reexamine their investment process and criteria, the team sought to understand bias as a roadblock to increased funding for Black founders.

Learning Objective

This case is designed to help students learn concepts useful for understanding bias in venture capital and ways to increase funding for more diverse founders.
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