Last week, in response to a Black entrepreneur who said VCs are racist, venture capitalist and entrepreneur Joe Lonsdale attributed disparities in venture capital investing to “average black culture.”
“A real view: average black culture needs to step it up and stop having as many kids born out of wedlock (statistical indicator of underperformance) / who don’t value education or spend as much time on homework,” wrote Lonsdale in the now-deleted series of tweets.
The opining of Lonsdale, who co-founded Palantir and runs the early-stage venture firm 8VC, prompted swift criticism from a number of tech investors, many of whom called on Lonsdale’s advisors and limited partners -- which include the likes of Yahoo founder Jerry Yang, Box CEO Aaron Levie and actor Leonardo DiCaprio -- to speak out against the entrepreneur's actions.
In one tweet with a screenshot of Lonsdale’s tweets, Bessemer partner Elliott Robinson wrote, “[I]t’s not VCs like [Joe Lonsdale] that hold the tech ecosystem and society back. It’s the hundreds of LPs, co-Investors, Founders, and decision makers that remain silent because: they do not care, they are scared [or] they agree. I feel bad for him/them to live like that. Its sad.”
Stealth-mode general partner Lolita Taub, who formerly invested via Backstage Capital and the Community Fund, told anyone who agrees with Lonsdale’s “racist commentary” to unfollow her.
Lightship Capital GP Brian Brackeen meanwhile said in a tweet that “any LP of his is complicit” and that “there is no shame in being him in SF. The culture there is to accept people like him. Diversity in tech can’t improve until we diversify the geography.”
Lonsdale responded to a request for further context, saying to TechCrunch via e-mail that he was “jumping on a flight” but that “somebody edited a screenshot and took a tweet totally out of context in order to cause outrage.” He further added that “the people attacking me have political motivations. You will note they are almost entirely on the far left and prefer divisive attacks vs working towards positive solutions together.”
Eric Christian Ramses, the founder of Undermine VC and the Stanford Robotics Club, was the entrepreneur who Lonsdale originally responded to. He says Lonsdale "lied blatantly" about the tweets being edited, and showed a timestamped screenshot of Lonsdale's tweets.
When asked what specifically was edited in his tweets, Lonsdale insisted that context surrounding the statements was lost from his original thread.
“I commented how past racism likely caused issues with some cultures today that we need to discuss and address, and given how terrible some of the things these communities experienced in the past were - red lining, Jim Crow, and so many terrible past issues - it isn't necessarily fair to blame 100% of problems today on racism.”
Lonsdale also added that he has “invested millions of dollars in black founders and in relevant philanthropic causes and proudly work with a lot of advisors from these communities and we continue to do more to reach out to talent from these backgrounds and to partner. As i have stated, it's not only dumb to discriminate, but if anything if somebody comes from a tough background and still manages to succeed - that means they are likely to be resilient, which means they are an even better founder to back. I am eager to continue to back talented black founders.”
When asked about the Black founders that Lonsdale has invested in, a spokesperson for Lonsdale responded saying it "doesn't seem appropriate to list names and force [anyone] to answer questions" given how Lonsdale's "notes were taken out of context."
Lonsdale has a highly successful business track record, but a record, too, of troubled personal dealings. In addition to Palantir and 8VC, Lonsdale has co-founded a line of companies, including Addepar, OpenGov, Affinity, Epirus, Esper, Swiftscale Bio, Resilience Bio, Hearth and LIT, which recently received a $50 million investment from Tiger Global.
More recently, he called “any man in an important position who takes 6 months of leave for a newborn…a loser.”
Lonsdale -- whose venture firm has been successful in its fundraising efforts despite public controversy -- has been attempting to clarify his earlier position since taking it last Friday. Later that same day, for example, he tweeted: “Worth clarifying: you can be against divisive and 'woke' nonsense, and I am. But we should still appreciate the positive parts of our culture and wisdom of the 21st century - that it’s important to be aware of past racism, kind, inclusive, and against actual racism of all sorts.”
“I don't necessarily expect TC to give me a fair hearing - a sensational article attacking and making [people] think somebody is racist and getting angry is what you are taught to do in journalism these days - but I hope you'll consider representing this view fairly,” Lonsdale said in an e-mailed statement to TechCrunch.
In a competitive and cash-rich fundraising market, Lonsdale’s controversial comments could attract negative attention to his venture firm and make founders less inclined to accept his money. Indeed, Block Party founder Tracy Chou claimed on Twitter that even before making his latest comments, Lonsdale had spoken to her Y Combinator batch and she described his comments on stage as “terribly distasteful.”
“It sucks that even after everything he’s trotted out by the establishment as an exemplar and to give advice,” she tweeted.
In the meantime, Lonsdale may find it harder to partner with the venture industry’s small but growing number of Black investors. Fund manager Del Johnson and Spencer Tyson, an associate at Revere VC, are among many investors who took to Twitter to dissect Lonsdale’s comments in the aftermath, and their frustration was plain. Tyson tweeted: “What you, and many others, fail to realize is that there is a difference between 'woke' culture and BLACK culture,” he said. “We’re not your rich liberal friends you argue with at dinner parties… You attacked BLACK culture.”
Ladies gentlemen, folks of all ages. I present to you my thesis: https://t.co/yVDFZ5B9IS
— Del Johnson (@DelJohnsonVC) December 29, 2021
For now, Lonsdale is continuing in his efforts to recontextualize his earlier statements. “The data suggests that there are structural issues (likely caused by past racism) holding people back and causing disparity, not racism by VCs,” Lonsdale tweeted in a separate response.