In the second half of 2022, fears of a looming economic recession have affected businesses across the country. The U.S. is currently in a “bear market,” which occurs when stock market prices drop by 20% or more for a prolonged period of time. There are many factors that can cause a bear market to occur, including bursting market bubbles, high inflation and even war or political conflict.
In October 2022, Vista Equity Partners Founder, Chairman and CEO Robert F. Smith discussed the importance of investing in diversity, equity and inclusion during a bear market at CNBC’s Disruptor 50 Summit. In his remarks, Smith highlighted how the recent drop in venture capital funding has disproportionately hit Black and Latinx small business owners. “They didn’t get their fair share of opportunity in gaining access to capital during the massive bull market expansion, and now they’re going through a bit of a bear market contraction,” said Smith at the summit. “… And I think that is a mistake on behalf of a lot of the [venture capital] community.”
The venture capital industry is “among the least diverse in finance.” According to a VC Human Capital Survey conducted by Deloitte, nearly 8 out of 10 venture capital investment partners in 2020 were white. After the Black Lives Matter protests that took place in the same year, Black- and minority-owned businesses saw an increase in venture capital and private equity funding. However, Smith noted at the summit that this funding “needs to be more sustainable, and to increase even further from some of those modest increases.”
Robert F. Smith’s Efforts to Champion Diversity, Equity and Inclusion
As an advocate for social and economic equity, Smith is committed to fostering a culture of inclusivity at Vista Equity Partners and helping support and scale up minority-owned businesses.
As a leading global investment firm, Vista was one of the first private equity companies to join the Modern Leadership Initiative, an effort by Diligent that works to reserve five board roles per company exclusively for minority candidates. As part of this commitment, Vista expanded its independent board program in 2021 to help source qualified board candidates, namely women and people of color. Additionally, Smith and Vista are members of the Thirty Percent Coalition, a group of corporations, investors and advocacy groups working “to increase gender diversity in the corporate boardroom and in senior leadership.”
Vista is also a supporter of the Southern Communities Initiative , a broader plan that works to accelerate racial equity funding, programming and outcomes for disinvested communities across the Southern U.S. Launched in 2021, Southern Communities Initiative focuses on four racial equity priorities to drive impact that involve supporting Black-owned businesses and reducing student debt among others. To date, Southern Communities Initiative has supported over 9,000 Black-owned businesses and minority business enterprises.
Learn more about Smith’s philanthropic efforts to champion diversity, equity and inclusion.
