In response to the Atlanta mass shooting that killed eight people, including six Asian women, Asian American venture capitalists have rallied around organizations that combat hate crimes and racism against Asian Americans by raising over $1 million from other VC founders.
The speed and size of the fundraising movement is noteworthy. Venture capitalists have historically not participated in social or racial issues publicly by donating to non-profit organizations, though that is starting to change as the industry grows and becomes somewhat more diverse. In this case, Asian American VCs may be leading the way, spurring their colleagues to give to Asian American Pacific Islander communities that have not had a high profile among philanthropic causes.
“It’s our role as Asian Americans in finance and tech to use the influence we have to shape the discourse in board rooms, management meetings and all-hands meetings at companies,” said Eric Kim, a co-founder of Burlingame, California-based Goodwater Capital. “People need to realize that the Asian American community is hurting.”
The venture capitalists are giving financial backing to a growing movement among Asian American Pacific Islanders to keep the racism directed at the community front-and-center on the agenda.
Eric Kim began raising money on March 18 in the aftermath of the Atlanta shooting. His VC manages $1 billion in assets and has backed companies such as Everlywell, Musical.ly and Weee. Goodwater committed to matching $100,000 in donations to non-profit organizations or other groups that focus on efforts to help Asian Americans and on the rise of racism.
Kim said he and others involved in the fundraising were taken aback by the lack of support in the broader finance and tech communities. “Initially, there was complete silence from the finance and VC industries that have benefited so much from the hard work of Asian Americans,” he said. “No one was coming to our support.”
The campaign was initiated by partners from Menlo Park, California-based GGV Capital – Hans Tung, Jeff Richards and Glenn Solomon, who have backed well-known companies in both the U.S. and China such as Airbnb, Square and Xiomi. The three partners said they would match $100,000 in donations. Lightspeed partner Jeremy Liew, whose firm backed Affirm and Snap, also agreed to match $100,000 in donations.
Kim and his co-founder, Chi-Hua Chien, enlisted the help of friends from the VC industry in an effort to increase the awareness that hate crimes against Asian Americans were rising exponentially
Other venture capital investors, including Altos Ventures, Initialized Capital, General Catalyst and Eric Yuan, CEO of Zoom, also joined the fundraising initiative to support Asian American Pacific Islander (AAPI) organizations.
Lu Zhang, a founder and managing partner at FusionFundVC, a Palo Alto, California-based seed to series A stage venture capital firm, made a donation to Stop AAPI Hate, stating via Twitter, “Thanks for leading this great initiative! Here is mine.”
Another donor, Tammy Tran, a cognitive neuroscientist studying memory, aging and Alzheimer’s disease, gave to Asian Americans Advancing Justice, and said on Twitter “Thanks for matching!”
“As people who are in leadership positions in VC and tech, it is absolutely critical that we use whatever platform we have to speak out for the Asian American community,” he said. “In our case, we are doing what we do best – we fundraise all the time. It’s really important that we play a role in combating AAPI hate.”
Some of the cultures within the Asian American Pacific Islander communities do not support publicizing philanthropy. But some super-wealthy members of the community do make the lists of donors, including Kim Pegula, a Korean American who is co-owner of Buffalo Bills and Sabres. Forbes says she and her husband, Terry, have a net worth of $3.8 billion. They announced last year that Pegula Sports & Entertainment would donate at least $1.2 million to COVID-19 relief efforts.
Donations given to AAPIs and other communities of color remain very low, consisting of 8.5% of all foundation dollars from 2005 to 2014, according to a report by the Philanthropic Initiative for Racial Equity. And of this amount, the proportion specifically targeting Asian Americans and Pacific Islanders was minuscule. In 2014, for instance, only 0.26 percent of all foundation dollars specifically targeted AAPIs. This compared to 0.30 percent for Native Americans, and 1.06 percent and 1.25 percent for Latinx and Black communities, respectively.
Some Asian Americans blame the model minority myth for obscuring the need in the Asian American community, which was highlighted by the shooting in Atlanta. Part of the shooting occurred in spas in the Asian community, where the hours are long and the pay is typically low, with few protections for workers.
It’s a vastly different world than the one occupied by the Asian American venture capitalists, but that’s precisely the problem. The “model minority myth” needs to be dispelled, Kim said, because it obscures the need in the community.
Even more than other groups in America, Asian Americans are bifurcated economically. From 1970 to 2016, the standard of living between “Asians near the top and the bottom of the income ladder nearly doubled and the distribution of income among Asians transformed from being one of the most equal to being the most unequal among America’s major racial and ethnic groups,” according to a 2018 Pew research report.
Asian Americans also have suffered the most long term unemployment of any race during the pandemic – during the fourth quarter of 2020 46% of unemployed Asian workers had been out of work for more than six months, compared with 21% in the fourth quarter of 2019, according to the Pew Research Center. Black unemployed workers faced the next highest long-term unemployment rate of 38%, followed by White of 35% and Hispanic of 34% of people who were unemployed.
Meanwhile, there has been a 149% increase in hate crimes over the past year directed at Asian Americans, while overall there was a 7% decrease, according to the Center for the Study of Hate and Extremism.
The xenophobic blame that has been put on Asians and Asian Americans for COVID-19 were contributing factors, Kim said. Change needs to begin with more education and “correcting the dialogue,” Kim said.
“We’ve been called all sorts of names in public – it is wrong. We need to change the narrative.
Kim also enlisted the help of celebrity friends such as Jeremy Lin, a basketball player for the Santa Cruz Warriors, Eric Nam, a Korean American K-Pop singer, songwriter and television host, and Arden Cho, an actress, to amplify the message.
In the wake of a year that saw mobilizations toward many social causes, other venture capitalists are rethinking their companies’ philanthropy more broadly.
Eric Bahn, a co-founder and general partner of Hustle Fund, which has $50 million under management and invests in U.S. and southeast Asia early stage companies, has personally donated money to Asian American organizations fighting against violence and racism of AAPIs, Asian American candidates and Doctors Without Borders.
Bahn, who works with two other Asian women, said he previously did not want to impose his values about social causes on them. Hustle Fund, which invests 38% of its funds in female founders and 17% to underrepresented groups and conducts 61% of its deals outside of Silicon Valley, will be developing a philanthropy policy toward organizations they want to support financially.
“If we truly believe in supporting a wide diversity of founders, then we need to be able to support societal causes,” he said. “We’ve never come to a conclusion on how we want to use our dollars for causes. It’s a work in progress for the fund on how we will decide who we will donate to.”
Venture capitalists need to speak out more for social causes they believe in.
“VCs have a reputation for being transactional,” Bahn said. “The newer emerging manager mindset is more partnership oriented – we need to focus on people who represent good values. We can’t turn a blind eye to people who are suffering in our community. If we have more money than time, then money is the leverage to support the causes we care about.”