Inclusion Is The Key To Democratizing VC Investing

I recently wrote about democratizing venture capital investing, sharing some of the history of the VC world, why it needs to evolve and how a mechanism called equity crowdfunding is helping. In this article, I’m taking a closer look at how to bring more equality into investing.

Why is this so important?

Everyone deserves access to wealth-building opportunities so they can live comfortably, take care of their loved ones and have a say in how our world develops.

We need to understand cultural shifts, technological breakthroughs and regulatory changes that are leveling the playing field for entrepreneurship and investing.

The companies and funds that thrive in the coming years will be the ones that embrace these changes.

It’s the most exciting transformation ever to happen in our economic system, and it’s something we fully embrace in our venture studio.

I see three elements as key to the shift toward equality: inclusivity, collaboration and collective benefit.

Making Investing More Inclusive

When most people think about venture capital, it seems like a murky world of closed systems behind closed doors. The average person doesn’t know how it works. All they see are wild valuations and high-dollar deals in the news.

Most of the activity happens around a handful of zip codes, and funding remains highly localized and limited to people with the right connections.

This leaves out a vast ocean of opportunities.

Many investors know they need to branch out, but they struggle to do it. We’re all busy and stuck with what we know, but we can’t let that hold us back.

The first step is to diversify your sources of information and your points of interaction. We openly seek input and participation from anyone interested in our studio or the companies we’re creating.

Something else I’m constantly doing is checking out news and social posts from people from different regions, backgrounds and cultures. It’s a great way to quickly start to discover unexpected and unique opportunities.

Collaboration Is Key To Impact

If inclusion gets more types of people to the table, collaboration gives them a chance to work together to make an impact. It means everyone has a voice and gets to be heard, rather than the standard top-down approach. Collaboration can extend beyond individuals to organizations as well. Startups typically work independently or even compete against each other.

This leads to a lot of wasted resources, and it creates a split between winners and losers. By sharing resources and working together, we can all win, and a system optimized for that reality can produce far greater results.

In our studio, we’re building a lot of companies in a way that’s very collaborative. Instead of teams competing for resources, they’ll be sharing them. We’re even selecting many of our new company ideas based partly on their ability to support our portfolio.

A collaborative system helps people feel engaged and connected to their work, the goals they’re helping to achieve and the people around them. However, there’s another factor that gets them even more excited.

Collective Benefit

The last piece of the equality puzzle has to do with the distribution of equity.

Rarely has the mid-level worker and below seen meaningful upside in a startup. Instead, senior leaders and investors make a fortune while everyone else is lucky to get the equivalent of a holiday bonus. That status quo is being radically challenged.

Collective ownership is the emerging future. Until very recently, only accredited investors of high net worth could invest in private companies. That limitation is rapidly dissolving and the power is shifting to the people:

• Meme stocks, though highly risky, have enabled retail investors to band together to influence markets.
• Blockchain-based assets are letting people come together to fund co-owned projects and products.
• Equity crowdfunding uses a conventional model akin to buying stocks but gives anyone access to invest in private companies.

These new access channels give people of all means and regions the ability to build wealth and contribute to innovative ideas that can better our world.

I’m excited about the emerging world and I consistently get positive feedback when I talk to people about these trends (which is all the time).

Embracing equality in investing is about how we come together to shape a better collective future.

Mark S. McNally is the founder and chief nobody of Nobody Studios, a globally distributed high-velocity venture studio bringing together investors, founders and creatives to forge companies with purpose, real-world value and a human connection. For more information, contact McNally at MarkSMcNallly@nobodystudios.com or visit www.nobodystudios.com.