Tech Bro refers to men working in tech who lack social skills and are sometimes focused on their careers to the exclusion of their female counterparts.
A lack of diversity in financial technology could hurt the bottom line of many companies, according to some U.S. lawmakers on the House Financial Services Committee.
U.S. lawmakers and witnesses discussed the underrepresentation of women and people of color in leadership positions in the fintech industry, including crypto currency companies, during a virtual hearing on Thursday on “fighting Tech Bro culture.” Data cited by Massachusetts Representative Stephen Lynch shows that only 2% of venture capital funding goes to companies with female founders, while only 1% goes to black founders and 1.8% goes to Latinos.
According to Lynch and some members of the committee, the trend points to an “old boys’ club” culture among companies, including those involved in cryptocurrencies, where many of those in leadership positions are white. They claim that many companies that don’t seem worthy of funding are able to raise capital more easily, in part because of leadership relationships.
“While a lack of diversity is a trend in nearly every industry venture capitalists invest in, it’s especially troubling in fintech,” Lynch said. “The largest fintech companies, including digital banks, payment processors and cryptocurrency providers, actually market their products to women and people of color. Yet when we look at founders and leadership teams, they clearly don’t reflect that The communities they claim to serve.”
Rep. Stephen Lynch addresses the House Financial Services Committee
Multiple studies have found that companies with different levels of leadership, especially those with more than one gender and/or one race, are ethically representative, more innovative and make more money,” the California representative Maxine Waters said. I think VCs are heavily profit driven, but it seems like they’re ignoring clear data on how to improve those profits.
Lynch cites the recent crisis surrounding crypto lending platform Celsius as an example of how VC money doesn’t necessarily go where it’s best spent. Celsius’ leadership team is largely made up of men.
“VCs continue to bet on bad investments, such as cryptocurrency companies like Celsius, which recently froze all client deposits, while women and founders of color with thoughtful, substantial business plans, on the other hand, remain in the waiting room.”