By Jane Lanhee Lee
OAKLAND, Calif. – Four venture capital funds founded by women of color in the United States on Monday said they are banding together under an umbrella called The Ally Capital Collab to get an edge on fundraising and investments.
The 22 Fund and WOCstar Fund have Black female founders, while Supply Change Capital and 2045 Ventures have Latina founders, according to The Ally Capital Collab.
Protests on racial injustice last year have triggered a move towards more diversity in the venture capital world, but startups run by people of color remain under-represented.
According to data firm Crunchbase, in the first nine months of 2021, over $7 billion of investments were made in Black- and Latino-founded startups, up from less than $3 billion on average for the previous six years.
That represents around 3.2% of funding to all U.S. startups.
“There’s a lot of investors who fundamentally are aligned with us, but have never had access to us. And so this is us coming together to make sure that people know about us,” said Gayle Jennings-O’Byrne of the New York-based WOCstar Fund, which invests in startups by minority women.
She said that creating an organization like The Ally Capital Collab for funds to work together makes it possible to aid each other in due diligence and give investors confidence, as many minority venture capitalists lack the Silicon Valley network to raise funds.
Representatives from all four funds are set to speak at an event at the Milken Institute in California on Monday.
Last year, industry group the National Venture Capital Association launched an arm called Venture Forward to try to tackle the lack of diversity.
“If we can help move the needle on the investor diversity… it’s going to inherently change the make-up of founders,” said Maryam Haque, Venture Forward executive director. She said its latest survey indicated there had so far been little progress in improving racial or ethnic diversity at the partner level.
(Reporting by Jane Lanhee Lee, Editing by Rosalba O’Brien)