raceAhead: Intel's Not Surprising New CEO

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FOLLOW subscribe SHARE January 31, 2019 After a seven-month search for a new chief executive, Intel's board announced today that interim CEO and former chief financial officer Robert Swan would stay on in the position. It was a surprising choice for the legendary chipmaker, which has always opted to place long-time, veteran executives in the top spot. Swan joined the company in 2016, making him the first new kid on the C-Suite block. What's a little less surprising is that Swan is another in a short list of very dedicated and highly qualified white men tapped to run Intel. Now, I’m not calling out the chipmaker, exactly. In fact, since 2015, they've taken a very public leadership role in addressing equity in tech, and have set and met a series of incremental inclusion goals which were established by former CEO Brian Krzanich. (Krzanich resigned last June after it was discovered he’d had a consensual relationship with an Intel employee, a breach of company policy.) Last fall, the company announced they'd achieved "full representation," a metric which means their workforce reflects their understanding of the available talent pool— for them, roughly 27% women, 9.2% Hispanic and a little under 5% African American. It's not even close to full equity, but one in a series of steps aiming to improve representation overall. Barbara Whye, Intel's chief diversity and inclusion officer, characterized it to The Wall Street Journal, as "like one inch on the 12-inch ruler." One part of her efforts to retain talent is the WarmLine, an internal leadership service that helps existing employees find support if they think they're being overlooked for advancement. And yet, progress is still slow. White men still account for more than 70 percent of corporate leadership in Fortune 500 companies. A short while back, I asked two researchers from the University of Colorado, David Hekman and Stefanie Johnson, for their thoughts on why underrepresented talent isn’t making it up the leadership food chain. Both separately and together, they've been conducting original research on how bias works, and to use their words, working on the puzzle as to why top-level leaders are disproportionately white men. One piece of research, published in the Harvard Business Review, offers an important clue. It showed that women or people of color who promote or advocate for each other tend to be penalized, which impacts their careers. "Our set of studies suggest that it's risky for low-status group members to help others like them,” they wrote. “And this can lead to women and minorities choosing not to advocate for other women and minorities once they reach positions of power, as they don't want to be perceived as incompetent, poor performers. This theme was echoed in Claire Zillman's must-read essay in today’s Fortune's Broadsheet. She began with a report from the World Economic Forum in Davos, and a panel of women who had become world leaders including Lithuania President Dalia Grybauskaitė and former Chile President Michelle Bachelet. In telling their stories, most expressed surprise that they'd gotten a job that they didn't actually seek. Panelist Chrystia Freeland, Canada’s foreign minister, noted, “It’s interesting how… [you’re] saying, ‘I never wanted the job I ended up with.’ And I wonder if that’s partly because we’re women, and women are not supposed to be too ambitious.” It will take friends in powerful places to change this. "The best people to advocate are white men," says Hekman. "They get penalized far less." Which sounds like a great reminder for Intel's CEO and the white male executives in talent pipelines everywhere: You all have an essential role to play in changing the culture so women of all colors and people of color of all genders can speak up for themselves. That kind of advocacy has a ripple effect that gives everyone around them permission to address and dismiss any hidden biases – like their contempt for overambitious women. "Just acknowledging race and gender before decisions are made will help," Hekman says. "Other people will be less biased in their judgments. And it matters that it comes from the top." . On Point Universal accepts the 4 percent challenge They're the first major studio to agree to take on the recently announced Time's Up challenge to work with more women directors. As a result, Universal Pictures, Focus Features, and DreamWorks Animation have all agreed to announcing a new women-led project within the next 18 months. First mentioned at Sundance, the 4% Challenge asks producers, actors, and other industry leaders to commit to a woman-led project within the coming year and a half. Amy Schumer, "Crazy Rich Asians" producer Nina Jacobson, and "Professor Marston and the Wonder Women" writer-director Angela Robinson were among the first to sign on. Click through for more info and stats. Women and Hollywood Octavia Butler credits LeBron James for her equal pay for upcoming film Butler and the NBA star are teaming up to produce on a Netflix series about Madam C.J. Walker, the first black woman to become a self-made millionaire.  Butler is also set to star. But it was James who stood up for her in negotiations, making sure she was being paid on an equal footing to the male talent. "I have to say, when I was negotiating my deal for 'Madam C.J.,' LeBron James had to intervene," Spencer said in an interview at the Sundance Film Festival, according to IndieWire. Jessica Chastain modeled similar allyship last year when she asked that Butler be paid the same as her on an upcoming film. Fortune What are open letters demanding diversity really about? Don Prophete, a partner at Constangy, Brooks, Smith & Prophete, has some strong words for the corporate general counsels who have been writing open letters demanding law firms improve their dismal diversity stats. "Here is what has happened to law firm diversification since the first letter was penned in the early 2000s," he begins. Nothing. "Today, law firm racial diversity has either remained stagnant or has decreased significantly." In telling his own story, he clicks through some reasons why, and with it, his impressive credentials. "Despite my success in the profession, my significant name recognition and my trial skills, I have never in 28 years of practice had a single GC reach out to me based on reputation, pedigree or skill to hire me for a major matter, like many of my white counterparts have been," he says. "These signatory letters have been more public relations than actual practice." American Lawyer Kim Davis violated the civil rights of others Former Rowan County Clerk Kim Davis, who became famous for her refusal to provide marriage licenses for same-sex couples, should be held responsible for the legal costs incurred by the state after she was sued in 2015, says the lawyers for Kentucky Governor Matt Bevin. Davis, who cited her religious beliefs for her actions, is being blamed for failing to do her job in light of the June 2015 Supreme Court decision which legalized gay marriage. A panel of judges is reviewing her case today. The suits incurred nearly $225,000 in legal fees. Kentucky.com . On Background The first time never I saw your face Buckle in for an excellent interview with Joy Buolamwini, of the MIT Media Lab, who explains why addressing biases in predictive software should be a priority. She starts with facial recognition software, which often fails to recognize black faces. It's calling everything into question. "[W]hat we have right now is blind faith in AI that doesn't acknowledge how easy it is for bias to creep into the systems. And at the end of the day data reflects our history, and our history has been very biased to date." According to Buolamwini, the first field to feel the bias may be "precision" health care. "There are biological differences that are really important to make sure we address when we're looking at the efficacy of drugs or various treatments." Her amazing TED talk is here. Marketplace Access to mental health care varies by race or class because of biased therapists This study from the sociology department in Princeton shows that working class people were less likely than middle-class ones to be accepted when calling for an appointment, with black patients even less likely than whites ones. "Although we expected to see evidence of racial and class-based discrimination, the magnitude of discrimination against working-class therapy seekers, in particular, exceeded our grimmest expectations," said the author. All callers were covered by the same insurance. Reuters   A reading list of queer, black poets Jussie Smollett has become, in many ways, a queer, black poet for a new generation; using his art to affect, comfort, inform and motivate. This list of queer black poets since the Harlem Renaissance are less well known. All were iincluded in Nepantla: An Anthology for Queer Poets of Color (Nightboat Books, May 2018), a book which aims to restore their place in syllabi and history. "Many of these poets were not only visionary writers, but also freedom fighters, survivors, legends, and proof that the vital poetry of queer black artists has shaped the world of American letters," writes Christopher Solo. Did you know a major black arts collective formed at James Baldwin's funeral? Well, now I know. Lithub . . Quote We see allies getting a lot of points for using terminology that marginalized communities have been using for a while, like when men talk about feminism or white people talk about racism. There's a real celebration of those instances as opposed to a willingness to listen to the people most affected.  —Moya Bailey . EMAIL Ellen McGirt subscribe share: . 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Term Sheet: Jan. 31, 2019

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FOLLOW subscribe ANON TIP January 31, 2019 STATE OF THE MARKETS Good morning, Term Sheet readers. In 2018, we saw funding records shatter with nearly 200 venture deals of $100 million or more in the U.S. In 2019, we might actually see exits for many of the startups responsible for last year's mega-deals.   . .   Although the U.S. has $500 billion worth of unicorns on paper waiting to be realized, 2019 could represent the tipping point between demand for private and public capital at the late stage, according to a new Silicon Valley Bank report. Some interesting insights: — Startups are better capitalized than ever before: Capital raises at every stage have more than doubled since the beginning of this decade. Here's a crazy stat: In order to make the top 100 deals of 2018, a startup would need to have raised a nine-figure round. — Fewer IPOs in even calmer conditions: Historically, high volatility has slowed the pace of venture-backed tech IPOs, which rely not only on first day pricing, but also on maintaining lofty valuations after a six-month lock-up. But with abundant private capital, 2016-2017 was an anomaly with relatively few IPOs despite calm markets. Also worth noting that public investors have largely agreed with private investors when it comes to unicorn valuations. Seven of the top ten billion-dollar debuts in 2018 priced and remained above their last private round. — The era of mega-rounds isn't over yet: Before the flurry of private capital began in 2015, the average venture-backed tech company would raise $100M in private capital ahead of their $100M public offering. Looking at the current crop of US unicorns, more than 90% have already raised at least $100M in a single private financing. — Profitability takes a backseat: Venture-backed startups have more than doubled their average revenue base at IPO this decade. However, this scaling has come at the expense of profitability ― and few have demonstrated significantly higher revenue growth at their debut. — San Francisco gets ready for a gold rush: A number of high-profile tech IPOs are anticipated in 2019 (finally), relieving demands for full liquidity. San Francisco may soon find itself flush with the wealth created by its venture darlings. These startups have a combined private value equivalent to all those located across the rest of the US. For more, see the full report here. FEEDBACK: Some Term Sheet reader comments after my column on Munchery yesterday: •  "Excellent article on the damage that is inflicted when these companies are just [instructed to] "Run Full Speed Into the Wall" by their management teams and VCs. The handwriting is usually on the wall that a company is not going to make it. (You never walk in one day and suddenly it's all over.) You can see the trends and the cash flow estimates that should give responsible people 3-4 months to wind something down in a responsible manner. Give staff 1) appropriate warning and pay-out schedules for any deferred vacation time; 2) health insurance coverage for 3-6 months; 3) use of the office space to job hunt for 60-90 days 4) pay all legitimate receivables etc. The corollary is that all these smaller service/product suppliers should be much tougher with all/any startups by tightly enforcing 30 day receivable cycles, escrow accounts etc." • "As usual, there are two sides to every story.  Ms. Estrada needs to be smarter in her management of customers especially if they are VC backed.  It would appear that Three Babes and other vendors used poor business practices and did not know their customer.  If they did, they would have NOT extended credit terms and would have moved Munchery to a cash in advance or pay at delivery basis. That said, the VCs bailed on their moral fiduciary duty as investors and board members." • "This is an expensive lesson, but small businesses should not sell things on credit B2B if they can't cover the loss. It's bankrupted many many small operators for centuries. Equity holders are not responsible for biz liabilities. Don't take promises for payment if it'll kill you." • "Maybe there is an insurance product to be built here? What if there was 1099 insurance where people paid a premium to make sure that if their 1099 revenue stream went bankrupt, an insurance provider would pay a portion of that receivable?" --- CONFIDENCE: A reminder that Term Sheet has teamed up with Semaphore on its 11th annual confidence survey of private equity and venture capital professionals. Final call to take the survey here, and I'll publish the results early next month. . . VENTURE DEALS • Clover Health, a San Francisco-based health insurance provider, raised $500 million in funding. Greenoaks Capital led the round. Read more. • Uplift, a fintech travel company, raised $123 million in Series C funding. Madrone Capital Partners led the round, and was joined by investors including Draper Nexus, Ridge Ventures, Highgate Ventures, Barton Asset Management and PAR Capital. • Stripe, an online payments company, raised $100 million in funding at a $22.5 billion valuation from Tiger Global Management. • RigUp, an Austin, Texas-based marketplace for on-demand services and labor for the energy industry, raised $60 million in Series C funding. Founders Fund led the round, and was joined by investors including Quantum Energy Partners, Global Reserve Group and Bedrock Capital. • Billd, an Austin, Texas-based fintech startup, raised $60 million in funding, from LL Funds. • Socati, a Woodburn, Ore.-based hemp company, raised $33 million in funding. Investors include JJR Private Capital Inc. • MycoTechnology, an Aurora, Colo.-based provider of an organic food processing platform, raised $30 million in Series C funding. Investors include S2G Ventures Fund II, L.P., Middleland MT Holdings, LLC, ADM Capital's Cibus Fund, Tysons Ventures and Eighteen94 Capital LLC. • Guardsquare, a security company focused on protecting complex mobile applications, raised $29 million in funding. Investors include Battery Ventures. • Fortanix, a Mountain View, Calif.-based runtime encryption solutions provider, raised $23 million in Series B funding. Intel Capital led the round, and was joined by investors including Foundation Capital and Neotribe. • Ironclad, a contract management leader that streamlines legal workflows for companies, raised $23 million in Series B funding. Sequoia Capital led the round, and was joined by investors including Accel and Y Combinator. • Simplus, a Sandy, Utah-based provider of quote-to-cash solutions, raised $20 million in Series C funding. Kensington - SV Global Innovations LP led the round, and was joined by investors including Savano Capital Partners, Salesforce Ventures, Cross Creek Advisors, EPIC Ventures and University Growth Fund. • Aporeto Inc, a San Jose, Calif.-based cloud-native security company, raised $20 million in Series B funding. Comcast Ventures led the round, and was joined by investors including Wing VC and Norwest Venture Partners. • dv01, a New York City-based hub between lenders and capital markets, raised $15 million in Series B funding. Pivot Investment Partners led the round, and was joined by investors including Regions Financial Corp, Quantum Strategic Partners Ltd, Jefferies Financial Group Inc, Illuminate Financial Management and OCA Ventures. • Stateless, a Boulder, Colo.-based company focused on network connectivity, raised $11.33 million in Series A funding. Drive Capital led the round, and was joined by investors including Speedinvest. • Zingle, a San Diego-based business-to-customer messaging solution for the hospitality industry, raised $11 million in funding. PeakSpan Capital led the round. • GT Medical Technologies, Inc., a Mesa, Ariz.-based developer of medical equipment for the treatment of brain tumors, raised $10 million in Series A funding. MedTech Venture Partners led the round, and was joined by investors including BlueStone Venture Partners. • Avinew, a Westlake Village, Calif.-based insurtech company focused on autonomous and semi-autonomous vehicles, raised $5 million in seed funding. Crosscut Ventures led the round, and was joined by investors including American Family Ventures, Draper Frontier and RPM Ventures. • CherryCircle Software, a company developing novel solutions for pharmaceutical process development, raised $2.3 million in seed funding. Investors include ATX Seed Ventures, PLH Business Ventures, and Hudson Park Capital. • Dadi, a men's health company focused on sperm storage and fertility testing, raised nearly $2 million in funding. Investors include Third Kind Ventures and firstminute capital. • TRM Labs Inc., a San Francisco-based token relationship management company, raised $1.7 million in seed funding. Blockchain Capital led the round, and was joined by investors including Tapas Capital, Green D Ventures, and The MBA Fund. . PRIVATE EQUITY DEALS • EnCap Flatrock Midstream invested $300 million in Clear Creek Midstream, a Houston-based energy company. • CID Capital and ORIX Mezzanine & Private Equity acquired Giftcraft, a Toronto-based provider of fashion, decor, giftware, health, wellness and gourmet consumer products. Financial terms weren't disclosed. • OpenGate Capital agreed to acquire Sargent and Greenleaf, a Nicholasville, Ky.-based maker of electronic locks, from Stanley Black & Decker. Financial terms weren't disclosed. • Colony Hardware Corporation, a portfolio company of Audax Private Equity, acquired Electrical Fasteners Co Inc, a Mokena, Ill.-based provider of tools, fasteners, and equipment to contractors serving infrastructure and commercial construction end markets. Financial terms weren't disclosed. • BV Investment Partners acquired a majority stake in RKD Group, a Dallas-based provider of omnichannel fundraising and marketing services for the nonprofit sector. Financial terms weren't disclosed. • Silver Oak Services Partners LLC recapitalized Keystone Partners, a Boston-based provider of outplacement, career management, executive coaching, and leadership development services. Financial terms weren't disclosed. • eMDs, a portfolio company of Marlin Equity Partners, acquired Aprima, a Richardson, Texas-based provider of electronic health record, practice management software and revenue cycle management solutions to ambulatory care organizations. Financial terms weren't disclosed. . EXITS • Addison Group, which is backed by Odyssey Investment Partners, acquired DLC Group, a Los Angeles-based finance and accounting consulting and staffing firm. The seller was Gryphon Investors. Financial terms weren't disclosed. • Madison Dearborn Partners and CoVant Management agreed to sell LGS Innovations, a Herndon, Va.-based provider of command, control, and cyber products, to CACI International Inc for $750 million. . FIRMS + FUNDS • TCV, a Menlo Park, Calif.-based private equity and venture capital firm, raised $3 billion for its fund TCV X. • The Carlyle Group (NASDAQ:CG) raised €1.35 billion ($1.5 billion) for CETP IV. • Partech, a Paris-based private equity and venture capital firm, raised €125 million ($143 million) for its Partech Africa fund. . PEOPLE • HCAP Partners promoted Bhairvee Shavdia to senior associate. • Kareem Aly was promoted to principal at Thomvest Ventures. . SHARE TODAY'S TERM SHEET View this email in your browser. Polina Marinova produces Term Sheet, and Lucinda Shen compiles the IPO news. Send deal announcements to Polina here and IPO news to Lucinda here. . Email Polina Marinova subscribe share: . This message has been sent to you because you are currently subscribed to Term Sheet Unsubscribe here Please read our Privacy Policy, or copy and paste this link into your browser: http://www.fortune.com/privacy FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice. For Further Communication, Please Contact: FORTUNE Customer Service 3000 University Center Drive Tampa, FL 33612-6408 Advertising Info | Subscribe to Fortune