Three weeks ago, Canvas, a Santa Monica, Calif.-based diversity recruitment platform, hit headlines for its $50 million series C round.
There’s just one thing: the diversity hiring platform was founded by two white men.
Canvas, previously JumpStart, was founded in 2017 by Ben Herman, who started his career as a director of quantitative trading at Westbourne Partners in London and later founded a recruiting firm, and Adam Gefkovicz, who, according to the Forbes article, interned in Silicon Valley and noticed everyone looked like him. With its most recent round, the company has raised a total of nearly $83 million, according to Crunchbase. Herman told Forbes the company wasn’t even actively raising capital, but couldn’t turn down working with Bay Area-based Owl Ventures.
New York City-based Jopwell, Porter Braswell and Ryan Williams’ successful hiring platform for Black, Latinx, and Native American people, has raised nearly $12 million, according to Crunchbase. San Francisco-based Blendoor, founded by Stephanie Lampkin, provides diversity ratings to companies. She’s raised about $165,000, according to Crunchbase.
Canvas’s funding round highlights old patterns in early stage venture and venture capital, which despite all the attention paid to diversity in 2020-21, show few signs of changing. There’s immediate outrage, followed by little sign of change. Meanwhile, women and people of color who have long been working in the space put their heads down and go back to work.
The immediate outrage was clear. “excuse me what the fuck, how many poc and woc specifically have been working on this problem out of deep personal understanding and motivation and this is how the funding goes??” wrote Tracy Chou, who co-founded Project Include, on Twitter.
Canvas did not return a request for comment and Owl Ventures could not be reached at the time of publication.
Jibril Sulaiman, who founded Incluzion in Atlanta, Georgia, in 2019, spoke out, but saw little result. “One week update since the Canvas diversity outrage. Not one investor (Black or otherwise) has reached out nor has a single warm intro has been made. It’s okay though,” he wrote on Sept. 23. He did get two requests following that tweet, but none that fit right.
Sulaiman has raised $76,000 through regulation crowdfunding, he said. He feels like he hit a “brick wall” while pitching his company and applying to accelerators in 2018 and 2019.
When he was raising, he found some investors said they weren’t interested because they had a recruitment-related company in their portfolio already– even if it was unrelated to Incluzion’s diversity and remote-work focus. He’s also noticed investors are more likely to fund white male-founded startups that are finding product-to-market fit, but for founders of color, investors want that product-to-market fit already intact.
“There are a number of DEI solutions out there that should be funded in the same way,” he said. … “That’s the least that I would like to see as a positive outcome of all of this. Because no matter what, you can’t take that money away from them (Canvas).”
Meanwhile, the decisions of some founders of color and women, who have long been working in the space, to grow their companies slowly and deliberately were thrown into sharp relief.
The Different Experience of White Women
Katharine Zaleski founded New York City-based PowertoFly with Milena Berry in 2014 and the two raised about $8 million in 2015. Since then, the women haven’t tried to raise more because they’d rather focus on building a highly scalable product and retaining customers and partners than rushing to build connections to reach the goals set for investors, Zaleski said.
When the two pivoted the platform to diversity recruitment from focusing on working mothers, Zaleski and Berry hired people with diverse experiences to fill the gaps they couldn’t.
“As a white woman, I really had to take a step back and hire people who had very different experiences than me and listen to them and learn from them in order to build a platform that really serves underrepresented groups and get the results that they need,” she said. They have a team of 30 people in the U.S.
Most established founders in the space are staying silent, at least publicly. One questioned the advantage to be had in speaking out in an emailed response to Times of E.
“As time and time again we’ve seen, the level of funding received by the all white-male team trumps that of founders of color — in this case at least 8x for the all-white male team,” Kimmy Paluch, the co-founder of Long Beach, Calif.-based BetaBoom, which funds mostly Black and other diverse founders, wrote in an email in response to Times of E’s query. “The most striking part is not just the funding level, but how easily the Canvas team says they received funding even when they weren’t looking for it — the team wasn’t even knocking on doors.
“I think this is the point that stung hardest for underrepresented founders where they feel this would never be the case,” she said.“It’s tough to know everything from the outside but it does echo in ways that we’ve seen too many times for us not to ask questions.”
Herman does represent diversity in a different sense, Paluch notes: he’s a high school dropout from the UK and has spoken about being previously incarcerated.
Zaleski is not worried the large funding round will automatically make Canvas impossible to compete with. The industry is one based on relationships and connections, she said, and PowertoFly, like many other platforms in the space, has strong ones.
“At the end of the day, funding doesn’t give clients underrepresented hires that they’re looking for, that’s built on relationships and a really solid product, and providing the right kind of content to the talent that you’re looking to recruit,” she said. “You can’t buy that.”
This story and others on New Builders Dispatch are made possible by a sponsorship from the Ewing Marion Kauffman Foundation. The Ewing Marion Kauffman Foundation is a private, nonpartisan foundation that provides access to opportunities that help people achieve financial stability, upward mobility, and economic prosperity – regardless of race, gender, or geography. The Kansas City, Mo.-based foundation uses its grantmaking, research, programs, and initiatives to support the start and growth of new businesses, a more prepared workforce, and stronger communities. For more information, visit www.kauffman.org and connect with www.twitter.com/kauffmanfdn and www.facebook.com/kauffmanfdn.