THE DIVERSITY RIDER
A Path Forward
The Diversity Term Sheet Rider for Representation at the Cap Table
The Diversity Rider is a call to action focused on increasing opportunities and access to wealth in venture capital and startups for underrepresented communities such as Black, LatinX, female, and LGBTQ+. Firms adopting the rider language pledge to bring folks from these communities into deals as co-investors, thereby instantly increasing diversity at the core of the deal-making process. The rider language is as follows:
In order to advance diversity efforts in the venture capital industry, the Company and the lead investor, [Fund Name], will make commercial best efforts to offer and make every attempt to include as a co-investor in the financing at least one Black [or other underrepresented group including, but not limited to LatinX, women, LGBTQ+] check writer (DCWs), and to allocate a minimum of [X]% or [X] $'s of the total round for such co-investor.
Launched in August 2020 and led by Alejandro Guerrero of Act One Ventures, we encourage all venture firms and diverse check writers to join the movement. By pledging your support, you are committing to using the rider language in every term sheet.
How to become involved
The Diversity Rider is open to anyone who invests or wants to invest in startups, whether that is through a venture fund or as an individual Diverse Check Writer.
What your pledge means and why it's important
If every firm commits to making this significant change in their deal-making process, the VC playing field will be more inclusive. This will also give diverse check writers (DCWs) exposure to networks they previously did not have access to, and it will benefit firms by bringing diverse thinking to the companies in which they are investing. Act One is holding itself accountable by including the Diversity Rider in every term sheet.
Venture firms using the Diversity Rider in deals
Fifth Wall, Plexo Capital, Precursor Ventures, Equal Ventures, Homebrew, Primary Venture Partners, Fika Ventures, Muse Capital, Worklife Ventures, igniteXL Ventures, The Venture Collective, Shrug Capital, Talis Capital, Uncork Capital, RP Labs, WestRiver Group, OpenView Partners, Manfold Holdings Group, Torch Capital, Fin VC, Bonfire, FAB Ventures, Vamos Ventures, Intel Capital, Product Trust Investments, ArcView, Black Capital, SVB Capital, 122 West Ventures, EisnerAmper, Bicycle Day Ventures, Hannah Grey, Health Gap Ventures, Willow Growth Partners, Revelry, Relevance Ventures, Vine Ventures, Supply Change Capital, Aux21 Capital, Kapor Capital, PowerUp Fund, VMware, First Founders Ventures, Coyote Ventures, Sound Ventures, Female Founders Fund, Hillfarrance, X-Factor Capital, 27V, Bucephalus, Versatile VC, Wildcat Venture Partners, Red Tail Venture Capital, Next Wave Impact, Wiase Capital, Salkantay Ventures, Springboard Growth Capital, TheVentureCity, Reinventure Capital, Good Growth Capital, L’ATTITUDE, Sutton Capital, Red Bike Capital, Techstars, Scribble Ventures, How Women Invest, Purple Sage Ventures, Beta Boom, Neythri Futures Fund, Passbook Ventures, Dipalo Ventures, Peachtree Minority Venture Fund, Virtue VC, US Capital Global, Flexible Capital Fund, For Good Ventures, Tvalley, Urban Us, and ...
Industry partners helping to amplify the Diversity Rider
Stradling, Gaingels, Aumni, Founders Network, and Crunchbase
*Cooley Go has included the rider in standard term sheet documents; such documents were used by investors 166,000 times over the past 5 years
Finix offers a playbook on how to diversify your cap table | Finix blog
DEI in a Box: The Diversity Rider and VC | PledgeLA
How and why the rider was created | Fortune
The importance of the rider | NPR Marketplace Tech
What the rider can do for the venture industry | Inside Venture Capital
Press release announcing the rider
Where we are today
Marketplace Tech host Molly Wood invites Alejandro Guerrero back on her NPR show to talk about all the latest developments with the Diversity Rider. Published May 25, 2021.
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