Stitch Fix’s Mike Smith is leaving the online apparel retailer.
Mike Smith is a versatile and well-respected executive in the e-commerce industry. He also happens to one of the few Black C-level leaders in tech.
Now he wants to play a bigger role in changing that.
Smith has served as president, COO, and interim CFO over eight-plus years at Stitch Fix, the online apparel retailer and personal styling service. But he told Recode on Thursday that he plans to leave his executive role at the $4 billion publicly traded company in the coming months to start a venture capital firm. His goal is to get more money into the hands of tech entrepreneurs from underrepresented backgrounds, namely Black, Latinx, and women founders.
“I’ve been fortunate that I’ve done well being out in this ecosystem, and I want [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 the case.”
As a racial reckoning swept the US this year in the wake of George Floyd’s murder, some of the Silicon Valley elite who decide how to invest billions into startups have confronted their own role in the systemic issues of economic inequality prevalent in the US. Only 1 percent of VC-backed entrepreneurs are Black, and less than 2 percent are Latinx. Meanwhile, the percentage of VC dollars invested in female founders has barely increased since 2012. According to a Morgan Stanley report published this week, 61 percent of venture capitalists say that the Black Lives Matter movement has impacted their investment strategy, and 43 percent of these investors say that funding “multicultural-founded” companies is now one of their top priorities, up from 33 percent in 2019.
Smith said he was happy to field calls this summer from startup investors and other business leaders who wanted his advice on how to help solve issues of racial injustice and economic inequality. “The dialogue needs to happen and there needs to be vulnerability where people can admit, ‘I don’t know what to do,’” Smith said.
At the same time, this summer’s events and conversations made Smith want to do more.
“I considered either being CEO of a company or joining a venture firm, and then George Floyd happened and the racial unrest, and I really took stock of, ‘What do I want my impact to look like over the next 10 to 15 years of my career?” Smith said. “And it was super meaningful to process all that was going on this summer and realize, I do think the broadest impact that I can have is doing venture capital and starting my own firm, with diversity being a really important pillar of the firm.”
While Smith said his firm won’t ignore founders who aren’t from underrepresented backgrounds, there will be a “big focus” on evaluating ideas from those entrepreneurs who are.
“That pipeline has been underrepresented, that pipeline hasn’t had access. And we think we’ll find great founders,” he said.
Smith has for years served as both a formal and informal adviser to a growing network of Black and women founders, and believes that will put him in a position to get in front of the next great wave of entrepreneurs. The investment firm, which Smith will run with a partner he’s not ready to announce, will favor investments in consumer companies based on his experiences over the last two decades working at Stitch Fix and Walmart.com before that.
“Dollars spent in this country and the world are spent by more people who are non-white, and there’s a lot of Black influence on culture in this country,” Smith said. “But I don’t think we’ve seen as much participation in wealth creation, specifically in technology, in the Black community.”
Though Smith will leave his full-time role as interim chief financial officer when Stitch Fix hires a permanent replacement soon, the company is naming him to its board of directors — a rare offer to a departing executive. Smith also serves on the boards of publicly traded companies Ulta Beauty and Herman Miller, as well as startups Mayvenn and Imperfect Foods.