Meritocracy
It’s a process, and it’s entering its next phase
Disclaimer: Unless otherwise stated - ‘alleged’, ‘rumoured’, ‘well known’, ‘common knowledge’, etc - all statements are fully defensible with hard evidence, i.e. private emails, Superhuman Opens, DocSend views, Notion analytics, public information, and more. I have no contractual relationship (past or present) with any company mentioned here unless explicitly mentioned.
Thank you to all soundboards and sources for this piece - you’ve dealt with pages of text from me over the past few months. For those who are interested, over 80% of them are women, and half of the total group (by gender and race) are intersectional women :)
Summary
In short:
Venture capital used to be a meritocratic endeavour but now it is broken and misused - a core group of demographic essentialists actively suppress anyone who challenges their ‘solutions’
It is perfectly possible to fix infrastructural problems without demographic essentialism - and it always has been
I have developed a few of these solutions myself: the pre-track fund seeder Simplify, and the tax concepts of the Full-Stack State Pension and Asset-Derived Tax
I have been directly affected by at least two of these demographic essentialists who actively suppress high-performing members of the European tech and venture ecosystem, especially the women and minorities they claim to support:
The Skype-backed European venture fund Atomico does so in three ways:
Angel Programme: by implementing demonstrably fallible diversity targets and quotas
Insights Team: by repeatedly not reasonably reporting on the ‘State of Europe’ in its ‘State of European Tech’ report
Communications Team: by coercing a media outlet to remove criticism about the firm - when evidence of the issue criticised was published by the same outlet before the criticism
The Financial Times (FT)-backed media outlet Sifted has done so in several ways:
It has actively sandbagged a fact-checked and approved opinion series I wrote for them by severely curtailing its distribution and by only publishing half of the series (here’s the initial pitch and full submission) without asking for my consent beforehand, mirroring TED’s suppression of Coleman Hughes’ talk earlier this year
It has been alleged that Sifted went as far as actively driving racialised and engendered factionalism by pre-briefing ‘diversity, equity/equality, and inclusion’ (DEI) funds and initiatives around the world without providing context on me and my infrastructural solutions
I aim to provide the correct, clear, and transparent diagnosis of our core problems in venture, and society more broadly. I do so by asking three foundational questions:
“If nihilism and metamodernism are the new norms,
our institutions will reengineer themselves around this new reality.”
- Harry McLaverty
Opening Thoughts
Ten years ago, I, then a nervous sweaty teenager, sat in an office reception on Pall Mall, London. I was about to start my first day’s internship at Doughty Hanson, a European private equity (PE) fund, in their venture capital team. The opportunity was remarkable, but this was lost on me - the nerves took care of that. It was also a great distraction from upcoming A-Level results. Back then, ideas were what mattered, and the firm needed someone who knew maths, understood business and had good ideas.
I was incredibly fortunate to kick off my career in the industry straight out of secondary/high school, and I delivered. I presented a research report on social media strategy to one of their portfolio company’s boards, Secret Sales (a flash sales e-tailer), which raised a follow-on round and was acquired. Plus, I prepared a brief for another of their portfolio companies, the music streaming service SoundCloud, which continues to thrive today. My age was questioned, and I overcame those concerns with results. The system was broadly meritocratic.
The same cannot be said of an 18-year-old black teen today, privately educated or otherwise, based in the UK, US, or elsewhere. We’ve had a fair few ‘young vcs’ enter the fold now: I followed Laura Deming, and Harry Stebbings followed me. Age is out. Race, and demographics more broadly, are in. Today, you will succeed in part because of your race (or gender), not regardless of it.
A large swathe of the global venture capital space is now no longer meritocratic. This is most acute in European venture where state aid and DEI money are the main sources of capital. Most General Partners (GPs - who run venture funds and invest in startups) on the continent have never been through a meritocratic raise and have not been exposed to the fire of global competition. The same goes for fund-of-funds and other Limited Partners (LPs - investors in venture funds), many of whom themselves are seeded by the same state aid sources, and who have to directly compete with the same governments that are supposed to be enabling them. This is all activated by a media ecosystem most of which is fundamentally incentivised not to hold power to account. This blend is uniquely toxic in Europe, but every part of the global venture market suffers from at least one of these problems.
I sympathise with those who implemented affirmative action and similar reforms. Society was structurally racist and sexist and we wanted to be rid of those issues as soon as we could. The problems were intersectional with wealth, health, and climate outcomes, and still are to this day. However, we were more concerned with feeling like we were making progress rather than delivering true progress by addressing the infrastructural flaws in society (as opposed to the systemic ones).
The result: processes that now cause more issues than they solve. Systems that can’t decide who is black and who is not. Who is a woman and who is not. Systems that refuse to delineate between a poor black teen and a privileged one like I was. Systems that can’t even consistently define their success criteria. Wealth inequality and demographic percentages especially. These issues have been well-understood for a long time. These issues are often privately acknowledged and publicly ignored by the loudest activists and advocacy groups. “We can’t go back in time and change things, so we’ve got to stick to this.”
The thing is, we don’t have to stick to this - we’ve been able to replace affirmative action (and systems like it) with better solutions for quite some time. I don’t think we ever actually had to implement affirmative action - there were better mechanisms under discussion at the time. Seeing how fragile it is as a system, I think we would have been forced to move beyond the surface level, but I digress. However, the people who profited from the old way maintained the status quo, minimising new solutions with black squares and #BlackOutTuesday. I say, no more.
Any solution to diversity ‘problems’ must do three things: 1) eliminate unnecessary financial barriers to entry, 2) constantly reduce bias in assessment, and 3) allow for congregation (but not segregation) of marginalised groups. The solution must use generalised policies with targeted apologies. Three years ago, I put forward a solution called Wealth-Derived Tax (WDT - now called Asset-Derived Tax, or ADT) which proposes that we rebase our tax model on a wealth tax and a universal basic income. It’s much less scary than it sounds, I promise. It’s been reviewed by world-class academics and I’ve presented it at several academic conferences, but I’m betting you hadn’t heard of the research until now.
This post-affirmative action sentiment will proliferate into other parts of life, corporate diversity is next. In venture, I’ve proposed a new solution to that called Simplify, as part of a wide set of new investment mechanisms. Diversity in venture capital is now a fully diagnosed problem, and the solutions are fully executable. Instead of plastering the internet with evocations of “racism”, I simply ask that you think critically about the problems you protest against, consider all the ideas proposed in solving them (not just the ones that fit nicely on placards), and hold me and all other minorities (and women) to the same standards as everyone else. After all, that’s all we want. Systems that are both as fair as possible and as open as possible. In other words, a meritocracy.
“I have a dream that one day on the red hills of Georgia, the sons of former slaves and the sons of former slave owners will be able to sit down together at the table of brotherhood.
I have a dream that one day even the state of Mississippi, a state sweltering with the heat of injustice, sweltering with the heat of oppression will be transformed into an oasis of freedom and justice.
I have a dream that my four little children will one day live in a nation where they will not be judged by the colour of their skin but by the content of their character. I have a dream today.”
- Martin Luther King Jr.
What’s wrong with venture?
Any healthy society functions on the basis that one’s voice on a given issue is only as loud as one’s understanding of that issue. No more, no less. In venture, many voices are significantly louder than their understanding of the space. Especially at the intersection between venture, economics, and demography. The vast majority of venture investors (and people more broadly) do not have the requisite knowledge and insight to solve these problems. They also tend to have woefully inadequate workflows, drowning in notifications and a total inability to prioritise speculative calls. I say this as someone renowned for taking very few calls and meetings, and only checking email and socials once each working day. Specifically, I also categorically don’t use social media feeds.
As a result, most communication is reactionary. When you post, most of the reactionary pseudoscience that’ll be fed back to you comes in within the first 24 hours. When your post circles WhatsApp and Telegram groups, where people who have known you for years and are very familiar with your full suite of work seem to magically forget all of that, it comes in within the first 6 hours. This is not conducive to well-structured thought. This is what I’m talking about when I say ‘people don’t think’. If you don’t think, you can’t conduct due diligence. If you can’t conduct due diligence, you can’t make sensible investments. This, I believe, is at the crux of broken venture today.
Note: this list is non-exhaustive, there are hundreds of organisations both in and out of venture who do these same things. I’ve just mentioned the core ones I’ve worked with directly here.
State Aid
“American VCs can come in and win because the market has traditionally been poorly served by local venture firms which are largely dependent on state aid.” - Chris Stokel-Walker for The Information, June 30th 2023
Veteran investor (and very helpful soundboard to me personally!) Jerry Neumann recently explained the difference between a firm’s ‘outside rate’ and a firm’s ‘inside rate’. In simple terms, if one’s investors seek returns of x%, your returns need to meet, if not exceed, that percentage in net terms. That x value is important. Bad LPs invest in bad venture funds, bad venture funds invest in bad startups, and bad startups take time, capital, and attention away from the good ones. This holds the whole ecosystem back.
The vast majority of Europe’s LP capital comes from state aid. State aid doesn’t primarily seek returns, it seeks to ‘bolster its economy’, which in a tech context means ‘to build suitable capability to defend against the US and China.’ What’s more, some state aid LPs like the British Business Bank (BBB) offer private investors free leverage in the funds they co-invest in. This means that some of the bank’s profits are siphoned off to the private investors. Meaning, that if a private investor is investing in a venture fund backed by the BBB, the GP doesn’t have to return 3x. As a result, state aid funds drive down that x value, and the European ecosystem is filled with bad funds and startups that can’t compete with anyone. This is one of the reasons why such bad ideas proliferate the space endemically.
Recommendations:
Scrap the ‘free leverage’
Transition into sovereign wealth funds that aim to maximise returns for its citizens
Either force your existing portfolio funds to improve returns, or don’t commit to them
Atomico
I was a member of Atomico’s Angel Programme - Cohort 2, 2020. I continue to uphold all fiduciary responsibilities I have with the firm. They have been fully aware of everything I’m breaking down here for several years and have provided no sensible rebuttal. I actively encouraged them to include information about the emerging fund seeder category and later, challenged faced by emerging managers (e.g. AngelList pulling out of Europe) for the their annual State of European Tech reports in 2019, 2020, and 2021. By the 2022 report, I had lost all hope.
For context, I pitched Atomico on Simplify in March 2019 - they were one of three funds I could have reasonably raised capital from for this strategy at the time. I also pitched them on bringing me in as an Entrepreneur-in-Residence (EIR) during the raising process, a programme, alongside their Expert-in-Residence (XIR) programme, that I was informed they were winding down due to incompatibility with their core team. It has long been rumoured that one of the EIRs performed badly during the programme and this contributed to the firm’s decision to wind the programme down.
After several meetings, they brought me into their angel programme in December 2019 so that I could start testing the Simplify model straight away, rather than waiting for a first and then final close of the fund. It should be noted that Cohort 2 was forced to participate in the Sifted press release before signing contracts. Atomico was demonstrably more interested in self-affirming press attention than positively affirming its angels. Before this, I had flagged issues with scout, angel, and fund programmes and this was a good opportunity to experience them first-hand. As a side note, it is well known that they ripped their angel programme from another fund that was in the process of pitching them for investment.
Fortunately, I ‘seeded’ WarwickTECH during this programme, meaning that I knew all but one of the founders I backed long before the programme began (typically 6 years or more), and could demonstrate that I got into the startups I backed based on my merit, and not for relying on Atomico’s brand. This is also why I didn’t advertise my participation in the programme, and why participants in others (for example, Sequoia’s) don’t either. The firm looked at this negatively.
About halfway through the programme, in July 2020, I flagged specific issues about the Atomico programme, including most if not all of the issues I had already flagged before the programme started. They announced their diversity target in early 2021. This was a massive change because it meant that Atomico was no longer a meritocratic firm, and no one they backed could prove that they were top-tier. I flagged this in person in May 2021 and the response was, amongst other things, “This is only a very small part of our portfolio”. By this time, they had already committed to invest in Simplify.
Atomico is a Series A fund, meaning that it invests in companies several years after its angels do. Hence, from that cohort, we’re beginning to see whether or not Atomico can get into the startups that its angels backed three years prior. What has become obvious is that some of the angels have demonstrably better judgement and access than the entire firm combined and the firm now cannot get into the deals that the angels back. I can’t speak for everyone, but I can certainly speak for myself here. For reasons that will become obvious in 2024, the likelihood that Atomico didn’t want to get into these deals is incredibly small. With this in mind, the ‘mentorship’ model they employ doesn’t make much sense.
The firm does not take its ‘ancillary’ practices seriously. Their response times are notoriously slow. They only respond to you when they need something from you, not when you need something from them. With all of this, I ended up denying them the opportunity to invest in Simplify in January 2023. Side note: AngelList pulled out of Europe between their initial commitment and this time, which caused issues for many fundraises across the region. From experience, if you deny them of something (which I’m told many other funds have), then they will second your private phone number and call and text it endlessly. Not to mention that they will block book your Calendly link. As a result of all this, I declined calls with any of their lieutenants and went straight to the head of the firm, whom I’d met several times and personally signed off on my approval into the angel programme, and investment into Simplify. They also meet regularly with ‘DEI leaders’ who offer provably pseudoscientific advice. This request was read and not replied to. I followed up to confirm, and again, it was read and not replied to.
To sum up, the fund is demonstrably discriminatory and does not invest in the best deals, as a direct result of its model and funding. They could have brought me on as an Investor-in-Residence (or similar) and avoided all of these issues. Instead, they eviscerate high-performing operators and investors across Europe for their race and gender, and will very likely rip Simplify’s model and replicate it internally. Anyone who goes through their programme will not be able to prove that they are good at what they do and deserve the capital allocation.
To put this all into perspective, here’s a redacted version of a deck review I completed for one of Atomico’s portfolio funds that went through the angel programme before their first close. I sent the email on April 5th 2023:
Atomico Programme
Deal Attribution: One of the three stated benefits of the angel programme (by angels) is that having the Atomico brand helped angels get into deals - how can you categorically prove that you got into the deals of your own accord?
Diversity Quota: Atomico introduced a diversity quota for 2021 and beyond - how can you categorically prove that you participated in the programme based solely on the strength of your investment capability? [GP is a member of a minoritised group]
Ticket Size: It’s substantially easier to get into deals with [small] tickets than [larger] tickets - how can you categorically prove that you could have got into those same deals with larger tickets?
Track Record:
Out of the investments you’ve made, which did you lead?
Out of those, which investments were you first ticket in?
Out of those, which ones did you personally bring tier 1 follow-on investors into? Who were those investors?
Counterexample: Your investment into [startup] doesn’t count because [top tier fund] had already invested
Similar Funds
[Defunct US Emerging Fund]: My understanding is that the [edge] aspect of this fund came from [now defunct US emerging fund] - which collapsed before [they] could raise? Is this a good example of a fund you want to be associated with?
[US Established Fund]: This fund is a core proponent of the toxic practice of venture enmeshment - isn’t this diametrically opposed to your mantra of ‘[edge] done right’? (side note: [VC LP in the fund pitching me] is in a very similar bucket - [the GP of that fund] [themself] told me this was an issue)
Other
Research: None of your info about emerging managers and ‘golden periods’ appears causal - I’d focus on the fact that you personally are great and can outperform in any given market
Fund Size: Why so small? Will you be full time? If not, I’d recommend Spearheard.co (you have the clout to swing it as a non-US resident) and bring your friends into the fund
LPs: not sure who you’ve raised from beyond those you’ve mentioned - but general rule of thumb is don’t take government money (unless it’s a democratic country’s sovereign wealth fund and you’re comfortable with the terms), and don’t take money from other direct investors (unless they’ve already followed on into a sizeable number of your portcos independently - you want to solve an admin problem without driving enmeshment)
Recommendations:
Scrap the State of European Tech (SOET) Report - it’s a sales tool, not research
Unwind all Angel Programme holdings - Atomico has caused irreversible reputation damage to all angel programme participants, therefore they must change the angel:atomico:pool carry ratio from 25:70:5 to 95:0:5
Ada
I was the first venture partner at Ada Ventures, in February and March of 2020. They run a rolling programme. I have brought the firm into deals, counting them as a follow-on investor with WarwickTECH, and continue to have a healthy relationship with them. They were made aware of the following breakdown a few weeks before release. Their partners made several useful clarifications to claims made by sources. The partnership also referred me to their Head of Equity three times. This person refused to take a call or to answer any questions via email.
We can define meritocracy as ‘the process of maximising fairness and maximising openness’. Ada’s scout and angel programmes, in effect, do this, but there is a slight discrepancy:
Ada Scouts (Maximising Openness): There is, in theory, no demographisation of the scouts. However, the program stipulates that entrants must be leaders of ‘minoritised’ groups, who will, clearly, usually be minorities themselves (healthy exception: Alma Angels)
Ada Angels (Maximising Fairness): The angel programme stipulates that 5 spots must be reserved for Ada Scouts. This is, in all but name, a diversity quota. This means that it is not maximising fairness (and hence, meritocracy), and is where claims that it is a ‘two-tier review process’ come from
One of the defined perks of the firm’s scout programme is ‘the opportunity to participate in the angel programme’. The angel programme is defined as ‘open’. However, if you are not a minority then you will almost certainly have access to fewer spots, simply because you are not a minority. This means that the programme is not open, and their quota is essentially a minimum ‘diversity floor’.
Mechanically, the scout programme pools from a smaller set of people than the angel programme. Hence, the expected returns of the highest returning scouts (and underlying deals) are lower. These scouts are then artificially included in the angel pool. As a result, the firm artificially reduces the returns in the angel programme. As such, if scouts can’t compete on application to the angel programme without a quota, then they shouldn’t be scouts. This seems to be more about placating the radical left with optics that openness immediately yields representation, more than anything else. This notion is provably false.
It is also important to highlight the firm’s recent ‘Women in VC’ Report, and similar material released prior. Transparency is critical, and I’m glad that the firm and its partners deliver it. However, there is a fair amount of obscurity through transparency and otherwise neglected information which skews it.
To start, the report references the ‘gender gap’ extensively, but doesn’t demonstrate why that gap exists at a fundamental level. This is a multivariate problem, not a univariate one. Harvard economist Claudia Goldin recently won a Nobel Prize for her years-long work breaking the existing falsehood. Further, the report does not appear to control for fund size and stage (e.g. early, A, growth) at any point. While they do refer to platform roles in the piece, they could have done more to control for investment vs non-investing roles in my view. Further still, given that socioeconomics and class are provably dominating factors, and that forced diversity provably doesn’t work, they do not justify demographic-based investing. As is the case for race, firms still can’t objectively decide who is a woman and who is not. They most likely test for ‘femininity’ rather than chromosomes, gonads, testosterone, or gametes.
Now, they do recommend that we remove the ‘GP commit’ requirement (the amount each fund manager needs to contribute toward their fund) for ‘diverse GPs’, but 1) doesn’t objectively define who this includes, and 2) doesn’t justify why they don’t recommend we do this for everyone. The report also seems to assume that venture must run on an apprenticeship model when it demonstrably doesn’t have to. They can look to the very same independent education programmes that they employ, like the Newton Venture Fellowship. This will very likely form part of a broader transition from venture’s apprenticeship model to a new self-directed learning model. A corollary of this will be that people will move straight from zero to partner and many of the low salaries they refer to (for junior employees) will cease to exist. This further reinforces the fact that venture is much more of a philosopher’s role than a finance job and that many funds will transition to become partner-only over time, following in the footsteps of Benchmark Capital, Connect Ventures, and many others.
With all this considered, this report must be classed as mid-information. It presents the surface level without the underlying drivers, and the writers have collected endorsements for it from people who are provably damaging the space through forced diversity, for women and for everyone. For this reason, I am fundamentally opposed to venture activism - it is simply not grounded in a full set of facts.
Recommendations:
Scrap the quota
Reengineer your approach around infrastructural drivers
The Movements: DEI, ESG, Tech for Good, Impact
I was a member of Google Campus’ #poctech team between October 2016 and October 2017. There, we focused on non-exclusionary congregation. We did not draw racialised lines in the sand.
At present, global venture serves the broken movements of DEI, ESG (Environmental, Social, and Governance), Tech for Good, and Impact - rather than the startups themselves. These movements broadly make an ‘equity before equality’ argument. This doesn’t make sense, because the gaps are indicators of infrastructural problems. To erase the gaps is to erase the indicators - which then means that the problems never get solved. It is straightforward to demonstrate that it is implausible to prove what the demographic percentages would be for a given fund.
Say we have a nursing unit with a 4:1 woman:man ratio in a two tier hierarchy - leaders and followers. Say also that gender pay averaged amongst everyone 50:50. In this case, the men are paid drastically more than the women because they take up the vast majority of the leadership positions. This suggests that there is a bias in the promotion process. A problem that the surface-level analysis would not pick up. For the mathematically inclined, taking such gender ratios in aggregate, we’d expect to see a leptokurtic normal distribution.
Contrary to what they may tell you, we’ve had infrastructural solutions ready to go for several years now. On the release of my Sifted piece, I had a bizarre situation where Diversity VC’s CEO claimed that we didn’t yet have infrastructural solutions when the firm itself promoted my infrastructural solutions three years prior. As detailed, quite a lot of people have known about at least one of them since 2018 and chose to obfuscate them in favour of their programmes that they're using for woke-washing.
Diversity initiatives should be jumping for joy at solutions like Simplify, because while corporate diversity programmes will rightly be killed off (because they provably deliver zero value on average), the rest of us have always been true to the mission, and will continue to be. What I sense is really going on here is that these groups are lashing out because they will not be the ones to continue the mission, and weren’t contributing all that much by way of the mission to begin with. We’ve now reached a point where these programmes are actively denying the existence of these solutions and are spreading mid-information and reactionary pseudoscience to justify their existence.
Recommendations
Deliver true transparency using a full suite of facts
Enable non-exclusionary congregation
Sifted
Most of this information has been public since September 18th 2023. The Opinion Editor, Deputy Opinion Editor, Editor, CEO, Executive Chair, and Editorial Director are all fully aware of these discrepancies and elected to ignore them when repeatedly flagged.
Commission
Earlier this year, the FT-backed European tech news outlet Sifted commissioned me for a two-part opinion series titled “Europe: you’re drunk on state aid and high on DEI”. Part 1 was to focus on DEI, and Part 2 was to focus on State Aid (which, as discussed, is where most venture funding comes from in Europe). The two parts are directly connected and I pitched them as “two parts of the same coin”. While modular, in theory, they could have been published in any order, one is not complete without the other. Hence the series format. At this point, allow me to note that given that this was an opinion piece, I wasn't allowed to go into detail on Simplify itself. But as stated, the core point is that eliminating the personal cost of setting up a fund plus gaining access to SFOs is the core problem - which Simplify solves. The magic is how.
I chose Sifted because 1) they have a very strong reach across Europe, and 2) the series challenges much of their existing content, so I’d have to sharpen my arguments the most with them to be published. The process from initial pitch to publication of the first piece was 8 weeks, including 5 weeks of review. For them, it’s usually one or two emails. During this time I broke down the four types of racism, the history of the invention of racism, the weaponisation of unnecessary racialisation, and, amongst other things, developed a repeatable experiment to demonstrate that we should expect company gender ratios to follow a leptokurtic normal distribution rather than them all being 50:50.
In the end, the claim ‘the venture DEI machine works’ is falsifiable and I proved it wrong. They challenged the proof and couldn’t find a flaw in it, so they published it. Even though they may not have liked the result personally. This was, I thought, simply good journalism. Sadly, it was not. As will now be apparent, they published a single piece titled “Europe’s venture diversity machine is out of control” without the context above. Essentially, they only published half of my argument.
Sifted’s opinion process is peculiar, especially compared to similar outlets like The Information, or its backer the Financial Times. With these outlets, you pitch, you have a call with an editor, and you sign a contract. I pitched them on Wednesday, June 28th 2023, and to date have not had a call with them. I was not offered a contract to sign. I strongly suspect that if they followed a standard and opinion process the following discrepancies would not have occurred. At other outlets, they simply would not be allowed to occur.
I flagged issues throughout the full process of production, distribution, and exhibition. They did not address any of these issues. As it turns out, I was ‘sandbagged’, as TED did to Coleman Hughes.
Process & Structure Issues
There are three issues with Sifted’s opinion outlet: Action, minimisation, and coercion.
Action: During the process, I was informed that each part would be edited in separate phases, which implied that they would be published with a gap longer than the outlet’s standard 24 hours, but this does not mean that they would strip the ‘series’ element completely. The final document that they signed off on Friday, August 18th was titled ‘Series: Europe: You’re drunk on state aid and high on DEI, Part 1: Europe’s venture diversity machine is out of control’. Publication was on Monday, August 21st. The title of the piece was “Europe’s venture diversity machine is out of control”, and it was not until Thursday, August 24th that the team informed me that they would not be editing and distributing Part 2. They must have known this before the publication of Part 1 - otherwise, the piece would have retained its original series title. To be clear, I did not know of any of this until after ‘Part 1’ was published.
Minimisation: Sifted claims to follow an unbiased process, but they did not treat this piece the same as their other opinion pieces. Their standard practice is for the journalists who edit a piece to ‘PR their own story’, i.e. to share it on their personal LinkedIn accounts - which they did not do in this case. They have also only distributed the piece via the Sifted LinkedIn page, and did not share it on X, even though they were still actively using the platform for their other initiatives at the time - and do today. Further still, on their bio describing me - they flag that I’m building WarwickTECH and Simplify and that I was on the Atomico Angel Programme in 2020. They entirely neglect that I started in venture at age 18 at Doughty Hanson and worked for or with a series of other venture funds (outside of my vehicles) since then. They are employing the same revisionist historical practices that the opinion piece criticises. Further, it has been alleged that Sifted pre-briefed a range of DEI funds globally without providing the full context on me and my work. If you filter out the reactionary comments made on the piece, the feedback was overwhelmingly positive.
Coercion: Sifted is a small outlet which means that they are limited in how much they can publish and in how much depth they can go into each piece. This also makes them highly susceptible to coercion. The DEI part of the series rightly addresses that I participated in Atomico’s Angel Programme in 2020, but following a conversation between Sifted and the Atomico team, this section of the article was changed drastically. The editor of the piece is ex-Atomico and they gave the media briefing for the 2020 Angel Programme that I was a part of. The editor could have recused themselves due to the conflict of interest and had someone else run the piece, but elected not to. Further, the piece directly critiques the use of demographic ‘lines in the sand’, yet I was not allowed to critique Atomico’s use of lines in the sand in the article. Here’s how the editor changed the Atomico critique:
Submission: “Now I should say one thing unequivocally. I was on Atomico’s angel programme in 2020 (Cohort 2) - this particular cohort was not racialised. They brought in their diversity quota [correction: it was a ‘target’] for Cohort 3 and beyond. If I knew they were going to do this - I would not have joined their programme.”
Publication: “After participating in the Atomico angel programme — which has always put an emphasis on selecting diverse angels — I definitely felt when I was raising for my own VC fund that LPs and other investors were scrutinising my past deals. Did I get into them because of my Atomico association or my skill alone?”
As an aside, this follows them nixing equal reference to ‘line by ancestry’ discrimination, which we’ve long had a word for:
Line by Colour: This is a form of discrimination known as colourism which still permeates our society today. There is no reason to reinforce it. Sifted’s promotional material mainly focused on this.
Line by Ancestry: This is a form of discrimination known as mongrelism which we abandoned last century - again, there is no reason to bring it back. This term was in the copy that I approved, but Sifted nixed it at the last minute.
Recommendations
Scrap the opinion team - it is fundamentally compromised, does not hold power to account, and serves as a propaganda machine for Atomico
Sell to the FT - the FT must acquire Sifted back in a stock deal, and rein it in
“It takes considerable knowledge just to realise the extent of your own ignorance.”
- Thomas Sowell
What are the root causes?
The Philosophy
There are several philosophical fallacies and inconsistencies which pervade society today, which I don’t think did during the Civil Rights Movement to the same extent.
Falsifiability asks “Can x be proved or disproved?”, disprovability asks “Has x been proved or disproved”?. The notion that ‘we must fight racist discrimination with anti-racist discrimination’ is falsifiable, and has been disproved by circularity. This notion is why a certain group of people can’t wrap their heads around a “black investor” advocating for meritocracy and a lifetime pension model.
Then there is reality vs existence. Just because something isn’t real, that is not to say that it doesn’t exist. Take things like gender, money, unicorns, race, morals, and ethics. People claim that these things are ‘real’ because they mean a lot to them. They are prioritising the ‘emotional truth’ over the facts. This leads to a society where there is a January 6th level event about everything, everywhere, all the time. This was true for Twitter and is true for X. This lack of delineation is demonstrably unhealthy.
Then there is science vs pseudoscience. Scientists constantly address their own internal biases, operate openly and transparently, and seek consistency. This is healthy. On the other hand, many people seem to think that if they don’t like a fact, they are allowed an ‘alternative fact’. They may even say that their trauma entitles them to their own facts. With this, society breaks. Hard. The healthiest people are constantly open to being disproved. They get frustrated when they aren’t because then they aren’t learning. This is exactly what happened with my Sifted piece. After all the nonsense, no one proved it wrong.
Then there are several inconsistencies:
Racism & The Role of DEI: The role of DEI leads and groups is to be ‘therapists for companies’ and to make the infrastructural changes smooth; in this case, to bring to light a much more concrete definition of racism - ‘any unnecessary form of racialisation’
Anecdotes: There are many ‘hindsightedly humorous’ stories we hear about in tech and venture which highlight the multiplicativity fallacy in DEI initiatives:
1) a female founder rejected for funding from a fund that invests in women only because she has male co-founders
2) a Peruvian person of colour living in Sweden who finds themselves ineligible for any diversity programmes in Europe
3) a survivor of the Bosnian War with her opportunities limited because she’s not as dark-skinned as an upper-middle-class public school Londoner
Opportunity vs Outcome: The terms ‘equality of opportunity’ (‘equality’) and ‘equality of outcome’ (‘equity’) are both flawed; however, the former is the better option because it forces us to understand the underlying infrastructural drivers that result in certain outcomes - like taxes in wealth building
In short, the most unifying solutions don’t draw lines in the sand. There is demonstrably no need to draw any demographic lines in the sand for the requisite improvements in the venture model. We need to stop trying to solve infrastructural problems with surface-level interventions. A lot of the problems with venture stem from how the education system does not enable autodidacts to reach their full potential. We need to address our past failures, implement the new infrastructure, and move forward. Generalised policy. Targeted apology. Infrastructural solutions. Legitimacy over wealth.
The Implosion of the Social Justice Warrior
“The only remedy to racist discrimination is antiracist discrimination. The only remedy to past discrimination is present discrimination. The only remedy to present discrimination is future discrimination. As President Lyndon B. Johnson said in 1965, “You do not take a person who, for years, has been hobbled by chains and liberate him, bring him up to the starting line of a race and then say, ‘You are free to compete with all the others,’ and still justly believe that you have been completely fair.” As U.S. Supreme Court Justice Harry Blackmun wrote in 1978, “In order to get beyond racism, we must first take account of race. There is no other way. And in order to treat some persons equally, we must treat them differently.” - Ibram X. Kendi, How to Be an Antiracist
This didn’t go so well. Taking an equal and opposite force to ‘racist discrimination’ to the extreme, you don’t get the end of racism. You get Ye’s ‘Black Skinhead’, and its cousin Darth Skinhead. This is the mother of all ironies. If you take me to the extreme, you get a system that is as healthy as humanly possible. People are well and truly on this path, not just in art, but in real life - which scares me. They are simply trying to replace ‘classical racism’ with a triumvirate of ‘modern racism’, colourism, and mongrelism. Their justification? “The ends justify the means.”
Taking a necessary detour, let’s think about immigration. The only consistent definition of ‘immigrant’ is the first-generation immigrant. This is not to say that second and third-generation ‘immigrants’ don’t face unique challenges, but their nationalities represent them better than their ethnicities. We can prove this by contradiction.
Imagine we have two babies born at the same time: Alice, born to Guatemalan parents, and Bob, born to Japanese parents, adopted by Alice’s Guatemalan parents alongside her. Alice and Bob are raised by exactly the same parents, at exactly the same time, in exactly the same way. Bob is just as ‘Guatemalan’ as Alice. Either they’re both Guatemalan, or neither of them are. Why? Because there is no objective line you can draw in the sand to say ‘after what generation are you no longer Guatemalan’. Assuming that Alice and Bob are both born in the US, they are both Americans, with Guatemalan ethnicity. Bob also has Japanese ethnicity while Alice does not. But overall, it is their objective Americanness that defines them.
As such, there is a stark difference between the experience of African-Americans (1st generation immigrants to the US from the African Continent), and Afro-Americans (descendants of African immigrants). This furthers the point that there is more diversity within racial groups than between them. When so-called ‘African-Americans’ travel to Africa - it is their Americanness that the Africans find so striking, not their ‘Africanness’. With all of this, plus the fact that we already have successful ‘shared sovereignty’ mechanisms (the US, the EU, France), this further begs the question: why is racialisation necessary? Don’t we want to be a pathway toward healthy individualism instead?
Martin Luther King Jr.’s advocacy for policies agnostic to demography, and the elimination of financial barriers was the central tenet of the civil rights movement. Coincidentally, the success of these policies is driven by the power law. I personally contribute to this in two ways:
Simplify: Enabling the best people to activate the best startups
Upgrading Global Tax: Enabling people to achieve their full potential
The ‘social justice’ movement betrays Martin Luther King Jr. (MLK)’s ideals. Indefensibly so. They have created an demographised regime where minorities are forced to draw from the weakest sources of capital. They focus on ‘outcomes’, necessitating that their ends justify their means - which they provably don’t.
Forced diversity is abhorrent and provably makes things worse. It invites a new counterfactual about whether existing minorities in say venture deserve their place in it: “Did they get backing because they’re exceptional, or because they’re a minority?” This permanently damages the person’s reputation. They now have to go their whole lives proving their value. In the context of a fund, this also damages the fund’s reputation. As demonstrated, they can’t prove that they’re backing the best opportunities. Often, they’re not. You can never walk back demographic lines in the sand. Do not start.
Myself and others operated on merit perfectly fine before and have been performing well for decades. DEI is a fundamental disservice to all of us minorities who performed well under a then maximally meritocratic system. This includes minorities within the US, and all black people outside the US: the Caribbean, Botswana, Kenya, Tanzania, Nigeria etc. The entire DEI argument is built on race essentialism and American exceptionalism, the latter since exported elsewhere including the UK. Both are completely unhealthy and unnecessary. I’ll speak on my own behalf - I did not ask for this.
DEI leads claim that they ‘have’ to force diversity so that we can “see the future we want today”. This is false for two reasons: non-fungibility, and event response.
DEI leads address demographic percentages in aggregate, but not the individuals. It is very unlikely that the people running DEI funds would become investors under a meritocratic system. This is demonstrable by their weak investment performance, and the fact that they broadly can’t follow the same logic that I’m presenting to you here. The very notion of forced diversity treats all black people as the same. All women as the same. And so on. This is the definition of prejudice. In sum, we are non-fungible. We are individuals.
Contrary to the DEI community’s claims, there is essentially no gap between the infrastructural ideas being conceptualised, and the surface-level interventions being broadcast. Brexit and the election of Donald J. Trump took place in 2016. DiversityVC was founded in 2017, and Simplify has been developing since 2016 (2014 if you include WarwickTECH) and formalised in 2018. The Covid-19 pandemic, and the tragic murder of George Floyd, took place in 2020. 10x10 Fund was conceptualised in 2020, and the Full-Stack State Pension and Asset-Derived Tax (fka ‘Wealth-Derived Tax’) were conceptualised in 2020.
Two distribution failures are taking place within media, most notably the ones that fail to adapt to modern times. (Side note: Bloomberg is a major exception to this general trend.) This is mostly to cling to whatever remaining power and influence they might have. One, they are boosting these ‘initiatives’ which sucks attention and capital away from the people building the true infrastructural solutions. Two, they are now actively suppressing the distribution of these solutions, especially those developed by minorities, yet claim to be acting in our best interests. Three, they are now allegedly actively driving racialised and engendered factionalism to obfuscate the truth and the solutions. This regresses the same DEI progress that they claim to want to see. This is morally reprehensible.
The reprehension goes further because the venture funds who uphold these regimes often know about the infrastructural solutions too, and directly influence the media to do so. This is all about to break in a big way. We are now arriving at a point where minorities are breaking out of this two-tier ‘solution’. We are outperforming the firms that allocated us capital to begin with, before then demographising the allocations. We ourselves are developing more intelligent ‘DEI solutions’ than the DEI practices themselves.
This holds out of venture as well. I see no reason why we couldn’t have introduced a Guaranteed Income (funded by sovereign debt) throughout the West back in the 1960s instead of affirmative action. In the UK, this would have meant that there would be no need to have introduced the Future Fund and the furlough scheme. The zombie companies would have fallen and a new (much more ‘diverse and representative’) group of companies would have emerged - without drawing any demographic lines in the sand. Today, we’d be discussing how to transition the funding of the guaranteed income from debt to assets, and how to globalise the model through the full-stack state pension mechanism. It would seem that a large number of people would rather make noise than channel their energy into identifying and solving real infrastructural problems.
Bringing this back to my personal experience, I’m more than willing to suffer failure: the timing, the market, the lack of product-market fit etc. But I’m not willing to fail for the fact that I don’t fit someone else’s stereotype of what a ‘black investor’ should be.
As discussed, the problem today is that, while people are being helped through the door, DEI leads are obsessing over the doorframes (the demographic percentages), meanwhile the rest of us have meticulously and surgically built a bullet train shifting the masses forward both frictionlessly and at ultra-high speed. No one can define what the demographic percentages in tech and venture ‘should’ be, yet DEI leads continue to obsess over them. What we can do is to highlight the structural solutions to the structural problems in the space, and actively advocate for them. If the DEI space (both the advocacy groups and the funds) continues to ignore those of us building and operating the bullet train, then we cannot place any faith in their desire to deliver the change they claim they want to see in the space. They are actively drawing attention away from those of us who are doing the hard work to change the space for the better, for now and for always.
There’s another transportation analogy we can use. Ford’s ‘If I had asked people what they wanted, they would have said faster horses.’ There’s another way to frame this: ‘The problem looks nothing like the solution because the solution is misdiagnosed.’ In times past, people used horses because they wanted autonomy and privacy, not because they liked the horse and carriage per se. Cars extended that autonomy and privacy and cut the horse manure.
Similarly, meritocracy is not a case of forcing demographic outcomes (which a loud minority of ‘customers’ think it wants) but is a continuous process of maximising fairness and openness. We can extend that fairness and openness by eliminating financial barriers to entry, increasing access to private capital, and increasing fund ‘money on invested capital’ (MOIC - how many dollars come out of an investment, excluding fees and fund profits, for every dollar that directly goes into an investment) threshold. This will disproportionately improve outcomes for the ‘underestimated’.
To be clear, once you move off the path of meritocracy, there is no way back on it. The reason is that to do so, you have to centralise power and then promise you’ll give it up (returning to a meritocratic system) when you deem the system to be working. What gives you the right to make that decision? Why should we believe that you’ll give that power back?
Freedom of speech only matters when people you don’t like say things that you don’t like. Centralisation of power only matters when people you don’t like have power centralised toward them. These DEI leads and SJWs would never cede power to Trump and his ilk. Hence, they do not believe in the centralisation of power, even though they claim to. They only believe in the centralisation of power to them.
Further still, they still can’t define what it is to be ‘representative’. Representative of what? What population precisely? There is no way to objectively define this by percentage. The most ‘representative’ set of people is everyone in the world, there is no way to fully represent that group of people with a subset. What we can say is that we can expect every element of the powerset of the world’s population to emerge. Hence, what matters is ensuring that the given element in the given context emerged organically, fairly, and openly as possible. Quotas and targets are the literal antithesis of ‘representation’.
To conclude, you either maximise meritocracy, individualism, and democracy or destroy it. You either increase fairness and freeness over time, or you curtail it. I side with the former.
“When you want to help people, you tell them the truth.
When you want to help yourself, you tell them what they want to hear.”
- Thomas Sowell
How do we fix them and what’s the result?
Fixing It
Venture is a very old industry, take it from New Enterprise Associates (NEA) co-founder Chuck Newall:
“Well, everybody thinks that venture capital started with Arthur Rock in 1970, and the California explosion of partnerships that occurred around that time, that really isn’t true. Venture capital is a very old business. You can go back to Phoenician trading companies in 2000 BC, that had at 20 deals with the crew that ran the ships that went from the Mediterranean to England, and they had a carried interest to you can go through all the great exploration like Marco Polo was really adventure deal, and Christopher Columbus, and then you really get into more recent history.”
It is based on the power law, a natural phenomenon that is neither inherently good nor bad. As such, venture is neither inherently good nor bad. It is used in both healthy ways and unhealthy ways. The tax system venture operates in is toxic. This is an economic problem to fix - not a venture problem in and of itself. The emergence of the seed space in and of itself drove diversity in the industry. This is provable by exclusion. If money continued to pour into venture and there were no seed market, then Series A round sizes would have increased, the demand for them from startups would have increased, and startups’ access to them would have decreased. Venture is inappropriate for the vast majority of companies - most don’t need jet fuel.
Downturns necessitate improvements in the venture model. We innovated through the global financial crisis by eliminating the personal cost of founding a company. Specifically, we made vast improvements in cloud compute and storage, essentially eliminating a core investment cost for startups - server costs. Also, AngelList eliminated administration costs for funds, reducing the minimum viable fund size from $30M to $1M. These types of innovations are what allowed the seed space to thrive. Think Y Combinator, Seedcamp, and Entrepreneur First. This drove a large increase in startup and fund quality, and DEI.
Of course, there are no solutions, only tradeoffs. This innovation led to a plethora of scout and angel programs which drive enmeshment, brand dilution, and questionable metrics. Venture funds regularly invest in their competitors. Scouts use the funds’ brand to get into top deals for short term wins, destroying their investment track records as they’re building them up. When I said “I don’t care if you got into a deal in a round after Index invested, I care whether you were a first ticket into a company, then brought Index in to follow on.”, I meant it.
While your name appears on the startup cap table, your vehicle does not - unless the scout programme you’re on is built on Bunch’s Scout Fund vehicle. As such, the angels do not have a direct de jure relationship with the founders they back. Very much an Amazon vs Shopify dynamic. This, and the fact that the ticket sizes are usually so much smaller than that of a fund, makes it impossible for them to raise from institutional LPs further down the line. Meanwhile, the funds gain deal-flow as they claim to drive ‘ecosystem health’, while knowingly destroying it.
The polycrisis represents a new opportunity to drive innovation in the venture model. This time, we’re innovating through by eliminating the personal cost of founding a fund. No-code and Generative AI remove another investment cost to get startups off the ground - the technical costs. Meanwhile, Bunch Capital has reduced the minimum viable fund-of-fund size from $150M to $5M by eliminating admin costs, allowing the fund seeder space to thrive. That means Simplify. This in turn will drive a large increase in startup quality, fund quality, fund-of-fund quality, and DEI.
None of this happens in a panacea, it takes a three-pronged approach. Each group needs to solve their prong, and highlight the others:
Removing unnecessary financial barriers to entry (e.g. Simplify)
Removing all bias from process (e.g. Applied)
Enabling non-exclusionary cultural congregation (e.g. the 2hearts Community)
From a GP perspective, breaking the "we back first-time managers but not first-time investors" mantra is the key to removing unnecessary financial barriers to entry. So far as I'm aware, I'm the only person in the world doing this exclusively and via an independent vehicle. If you eliminate the personal cost of setting up a fund, then you allow people to raise a fund based on their legitimacy, rather than their wealth. In venture fund terms, that means based on the quality of your judgement and access to opportunities, rather than if you can raise $5M from family and friends.
From an LP perspective, think of Simplify as the most cost-efficient and time-efficient way of gaining access to world-class emerging pre-track funds and their underlying startups. As VC funding shrinks, LPs double down into some of their core funds, withdraw from others, and place a small ticket in Simplify because they know that they still have to have coverage over these pre-tracks. Because they can drive 250x Net Distributions-to-Paid-In (DPI). If you invest $1 into one of these funds, you can get $250 back.
From a DEI perspective, a direct consequence of eliminating the personal cost of setting up a venture fund is that the pool of people you draw from is larger and more inclusive - without being a diversity fund(-of-funds). As such, venture becomes both as fair and as open as possible. Demand increases on a fixed supply of LP capital, meaning that the quality threshold that GPs need to meet increases, and so the fund quality threshold increases, as do returns.
Minorities tend to skew toward the ‘emerging’ pool due to lack of venture exposure, tendency not to be able to afford GP commit, and more. Hence, implementing a fund seeder drives an outsized improvement for those managers. The process naturally increases the diversity of the overall set, while still only focusing on investing in the highest performing funds. The newer high-performance emerging managers get pulled up faster, and the older lower-performance established managers lose their LP capital faster. As such, if Simplify had been fully up and running in or before 2020, the DEI stats might have increased by now.
This leads us to another area, the ‘relationship model’. Del Johnson has proposed a ‘market model’ to venture. Essentially, he claims that under the current venture model, trust is prioritised over metrics, while we need to flip it the other way around. The problem with this is the ambiguity around ‘relationships’. To claim that the relationship model kills VC is not to claim that VC must kill relationships. Further, to be relationship-based is not the same as to be relationship-first. In theory, if you aren’t delivering on the metrics, you don’t get funded - regardless of the GP/LP personal relationship. What Simplify has done is to present a suitable mechanism for LPs to increase their allocation toward the highest returning fund managers at the appropriate risk/reward level and fee structure. In other words, Simplify has invented a way to achieve a maximally fair and open venture ecosystem that is entirely agnostic to ‘relationships’. As such, we don’t need to ban warm intros and we don’t need to discuss relationships in this way at all.
I should address why I’m putting such emphasis on ending essentialism when we know that fundraising is multivariate. Fundraising has a difficulty scale. I have tremendous respect for founders who go through the fundraising journey. It’s incredibly hard. However, what’s also true is that fundraising for an emerging fund is harder. There are far fewer genuine sources for the capital, and far fewer slots available. This ratchets up to another level when raising for a fund of funds.
And if you’re raising for a new type of fund like a fund seeder, and within that a pre-track fund seeder, it ratchets up even more. In this case, we’re talking about a new venture asset sub-class that no investor has an existing allocation to. Hence, you’re ineligible for any institutional funding. It’s not just about raising the capital, you have to change their investment allocation strategy first. That is hard. As you move up the scale, the pool of potential LPs becomes much smaller. Hence, out of the LPs eligible to invest at the fund seeder level, a single race essentialist harms your ability to raise two or three orders of magnitude larger than that of if you’re raising a standard venture fund, and three or four orders of magnitude than if you’re raising for a startup. This is the outsized effect of the emotional truth at play.
The last question is, “Is Lowercase I (250x Net DPI) a repeatable outcome?”. The answer is yes. Venture’s power law distribution has a theoretically infinite mean (alpha = 1.95). In other words, there is no upper bound on MOIC in venture. This means that it’s perfectly possible to outperform Lowercase I. The question we’re left with is: “Why is Simplify the fund seeder to do it?” This piece in of itself is that justification. To bring it home - I solved the economic block. This allows fund seeding to work at scale and without taking GP stakes. This in turn fixes the whole system.
The Result
Venture funds can’t solve all problems. Defining what the ‘right’ outcomes in demographic percentages should be. Transitioning state aid funds into sovereign wealth funds. Mobilising private capital into venture funds. Society’s excessive financialisation. The fact that it is easier to build wealth through inheritance and marriage than through hard work and ingenuity. Funds need to stop pretending that they can solve these problems with their vehicles, and leave it to those who can. Otherwise, they further fuel their own performative justice, which we’ve already unmasked.
We’ve already separated VC DEI into three categories: Maximally Meritocratic Venture (10%), Enabling Self-Directed Learning (30%), and Upgrading Global Tax (60%). We can expand this framework beyond DEI to the other movements; ESG, Tech for Good, and Impact:
Emerging Venture Models (10%) - enabled by Simplify
Maximally Meritocratic ‘Purist’ Venture - instead of DEI
Web 3 Native
$50B+ exits, 50%+ IRR funds
Climate Infrastructure Funds - instead of ESG
PE-Style
$1B+, ~20% IRR funds
Venture for the Tech-Enabled - instead of Tech for Good
Venture-Style (up to Series B)
<$50B exits
Health & Wealth & Values - instead of Impact
IP Commercialisation, Large Initial Investments
$50B+ exits, 50%+ IRR funds
Enabling Self-Directed Learning (30%) - enabled by Transcendence
Upgrading Global Tax (60%) - enabled by Transcendence
This replaces our subjective definition of ‘positive investment’ as a ‘direct, intrinsic motivation to do good’, with a much more objective framework. We don’t need to draw any lines in the sand when it comes to deciding what is impactful and what is not. We just need to set investment allocation to a given venture asset sub-class proportional to the directness of the solution to eliminating the ultimate financial barrier, poverty.
The real point is that venture is inappropriate for most companies. Most don’t need jet fuel. Several emerging venture models serve these companies much better. Conveniently, they solve the same problems that the ‘movements’ I was complaining about claim to solve. I see no reason why the money these movements control can’t flow straight into these new funds. As I say, it’s not about power, it’s about solving the problems.
Speaking of power, let’s think about how we move forward. The stereotype of a person with power is a white male Old Etonian who attended Oxford. I am a black male Old Waynflete (meaning: went to secondary school at Magdalen College School, Oxford) who attended Warwick, a Russell Group university. While my race is different, my sex and gender are the same. Magdalen’s school motto is ‘Sicut Lilium’, Latin for ‘Like the Lily’, the lily being Eton. I once took a 23andMe test, which put my country of strongest affinity as Cabo Verde, first inhabited in the 15th century. By comparison, Magdalen was founded in 1480. As a result, my genes don’t give me a huge amount of ancestral context to go on. So, I’ve had to reconcile that with individualism earlier than many other black people, most of whom do, contrary to popular belief, know where their ancestors are from. Much better than I do anyway.
The radical left wants to maintain that race is the killer difference here, but they actually say that I’m privileged and ‘not like them’. I refer to the previous verbatim quote: “It’s okay that you’re doubly discriminated against because you can take it.” This means that they are saying that socioeconomics is more important than race, and so contradict themselves. Others see me as an ‘infiltrator’ who can break into the elite and steal their secrets. But that’s not true either because the elites are the ones investing in my funds, and I’m driving returns for them. To my credit, my economics research is the counterbalance.
What I’m actually doing is defragmenting and re-engineering the venture market, and society more broadly, around healthy outcomes. Then they’ll say “ok fine you’ve had great privilege, but you’re not paying it forward”. “You’re pulling the ladder up from underneath you.” “Do you hold the door open for the elderly, parents with strollers, or the disabled? Or do you believe that since you had to struggle with doors, others should too? And perhaps you argue that instead of helping, we should be discussing door reform.” But then this doesn’t make a shred of sense either, because I’m replacing ladders with rockets - or the aforementioned bullet trains at least.
I should note that a non-London upbringing makes it a lot easier to delineate between demographics and socioeconomics. Half of black people in the UK were born or otherwise raised outside of London. There, they often find themselves to be the only minority, or one of a small handful of minorities, in a given group (school, university, or work for example). Black Londoners tend not to have had this, certainly not to the same extent. I suspect this is why they emphasise any disparity between them and any other group as caused by race.
With all that, let’s understand my setup a little better:
WarwickTECH: a venture fund backing founder CEOs from Warwick University
Simplify: an institutional fund-of-funds seeding pre-track venture funds globally
Meritocratic Venture is a core tenet of Simplify
We broke the 'we back first-time managers but not first-time investors' mantra
Transcendence: an investment manager enabling research-driven strategic expansions
Upgrading Global Tax is a core tenet of Transcendence
We are close to breaking the ‘UBI is unaffordable’ mantra
Inversion: a single-family office making life as rich and as awe-inspiring as possible
We live in strange times. Meritocracy and utopia were both construed as parodies, but now we’re putting them into practice. On meritocracy, I was one of the youngest venture investors in the world (age 18) and had my first exit at age 21 - while I was still studying at university. Then, I invented the economic model to eliminate the need for personal capital and an SFO network to launch a fund. Now, we’re going to see the greatest upswing in diversity numbers in the fund space ever - and they’re going to stick.
Utopia was coined by fellow Old Waynflete Sir Thomas Moore, known better as Saint Thomas. Now, I have presented a pathway directly toward this vision with my research on upgrading global tax. I presented this at the Annual FRIBIS Conference 2022 and it hasn’t been disproved.
Note: The content has met the academic threshold for peer review, as verified by the conference’s journal. However, the UK does not collect data on wealth by individual, meaning that it is not yet possible to run a microsimulation of the model. I am circumventing this issue with closed-end forms of Lorenz curves. I will submit for full, formal peer review once I’ve completed this analysis.
That being said, the economist who referred me to that conference said my model was better than Thomas Piketty’s. Which either means a lot to you, or very little. I have since presented an updated version of this at BIEN Congress 2023, the world’s oldest and largest UBI conference.
“To believe in personal responsibility would be to destroy
the whole special role of the anointed, whose vision casts them in the role of rescuers
of people treated unfairly by ‘society’.” - Thomas Sowell
Closing Thoughts
Meritocracy and democracy are two sides of the same coin. Much like democracy, meritocracy is the process of making a system as fair as possible and as open as possible. You don’t get to opt in and out of democracy as and when it suits you. In the same way, you don’t get to opt in and out of meritocracy as and when it suits you.
To riff off Dave Chappelle, if meritocracy is dead, the radical left, and those unwilling to stand up to it, killed it. European venture is fundamentally not a meritocracy. Most of the market, flooded by state aid and now DEI money, fundamentally doesn’t seek to be meritocratic. To be clear, there has always been a section of the market that is meritocratic, but it is now not but the tiniest slither. I started my career in the meritocracy, but the rest of it kept trying to pull me in. So I said fine, I’ll jump in and beat it from the inside. Now, I believe have done so.
I found that what’s holding us back is the prevalence of the so-called emotional truth. People are desperate. People are scared. But that does not give them the right to have their own facts. That does not give others the right to obfuscate the truth and take advantage of the truly disadvantaged. It makes a lot more sense to focus on solving problems rather than arguing over which race/group has been through more trauma.
While I’ve made it all obvious here in terms of DEI leaders projecting about demographic percentages instead of solving the real problems, it goes beyond that. It applies to people arguing over the three simultaneous atrocities in the current Middle Eastern context instead of thinking deeply about how to achieve a true lasting peace. It applies to those arguing over ‘sex work is real work’ and ‘trans women are women’ rather than thinking through the real problems of financial instability and limited individual rights.
There is only a very small slither of mainstream media that I now trust. The vast majority of media appears fundamentally unequipped to hold power to account at an appropriate level of depth. Perhaps Grok will change this, but their incentives will have to change alongside this - which will require deeper work.
Directly regarding Sifted, I’d like to think that this will be the last time this happens to someone, but it won’t. This is simply a precursor to upgrading global tax. In the same way that Sifted has tried to obfuscate the truth with action, suppression, coercion, and potentially much worse, there will be foundations that fight against a new tax regime because they are more concerned with the power they will no longer wield over those they claim to serve, as many of them are rendered mostly useless.
Hopefully next time, I won’t have to become an investigative journalist, a news agency, and a reporter - and put my actual job on hold. If anyone’s looking for a title for the story behind the story, here is the most New York Times-esque I could come up with: “The Curious Incident of Venture in the Limelight: The Meta-Modernist Coming of Age of VC in Europe and Beyond”. Knock yourself out.
With all this, I believe that I have demonstrated my direct, intrinsic motivation to do good, and will plough ahead with my new philosophy. “Hope for the best. Prepare for the worst. Expect overall neutrality.” There’s a reason my family office is called Inversion, and my newsletter is called No Friends at Dusk. Tenet. It’s because The Protagonist is the character I’m most able to relate to in any movie. I know for sure that Nolan chose John David Washington because he was the best for the job, not because of his race. That’s the world MLK wanted, that’s the world I want, and there’s no reason why we can’t have it.
We now have the infrastructure to make global venture as fair and as open as possible. Europe can overcome its dysfunction and the rest of the world can make sure that it doesn’t make the same mistakes that we did. Now it truly is time to build.
“I believe that we are in for the greatest transformation in global society for at least 500 years” - Harry McLaverty