Mike Smith is a versatile and respected executive in the e-commerce industry. He also happens to be one of the few black C-level leaders in tech.
Now he wants to play a bigger role in changing that.
Smith served as Interim President, COO and CFO for over eight years at Stitch Fix, the online clothing retailer and personal styling department. But he told Recode on Thursday that he plans to step down from his leadership role at the $ 4 billion publicly traded company in the coming months to start a venture capital firm. Its goal is to put more money in the hands of tech entrepreneurs from under-represented backgrounds, namely Blacks, Latinxes and Founders.
“I have had the chance to do well in this ecosystem, and I want to [there to be] more people like me, ”Smith told Recode. “When I look around and I’m the only one or one of the few, it just shouldn’t be.”
As racial judgment swept across the United States this year in the wake of George Floyd’s murder, some of the Silicon Valley elite who are deciding how to invest billions in startups have been faced with their own role in systemic problems of economic inequalities prevalent in the United States. Only 1% of entrepreneurs supported by venture capital are black, and less than 2 percent are Latinx. Meanwhile, the percentage of venture capital dollars invested in female founders has barely increased since 2012. According to a Morgan Stanley report released this week, 61% of venture capitalists say the Black Lives Matter move has had an impact. on their investment strategy, and 43% of them say that the financing of “multicultural” companies is now one of their main priorities, against 33% in 2019.
Smith said he was happy to answer calls this summer from start-up investors and other business leaders who wanted his advice on how to help address issues of racial injustice and economic inequality. “The dialogue has to take place and there has to be a vulnerability where people can admit, ‘I don’t know what to do,” Smith said.
At the same time, the events and conversations of this summer made Smith want to do more.
“I considered becoming a CEO of a company or joining a venture capitalist and then George Floyd happened and the racial unrest, and I really took stock of, ‘What do I want that my impact looks like over the next 10 to 15 years. my career? “Said Smith.” And it was super meaningful to process everything that was going on this summer and to realize that I think the biggest impact I can have is to do venture capital and create my own business, diversity being a really important pillar of the business.
While Smith has said his company will not ignore the founders who are not from under-represented backgrounds, the emphasis will be on evaluating the ideas of entrepreneurs who are under-represented.
“This pipeline has been under-represented, this pipeline has not had access. And we think we will find great founders, ”he said.
Smith has for years served as a formal and informal advisor to a growing network of black and female founders, and believes this will position him for the next big wave of entrepreneurs. The investment firm, which Smith will lead with a partner he is not ready to announce, will promote investment in consumer firms based on his experiences over the past two decades working at Stitch Fix and Walmart.com before that.
“The dollars spent in this country and around the world are being spent by more non-white people, and there is a lot of black influence on culture in this country,” Smith said. “But I don’t think we’ve seen so much involvement in wealth creation, especially in technology, in the black community.
Although Smith will step down from his full-time role as interim CFO when Stitch Fix soon hires a permanent replacement, the company is appointing him to its board of directors – a rare offer for a departing executive. Smith also sits on the boards of publicly traded companies Ulta Beauty and Herman Miller, as well as startups Mayvenn and Imperfect Foods.