Black employees comprised 3% of all investment partners at U.S. VC firms in 2018, and 1% of total venture funding went to Black or African American startup founders in 2020. As an industry, we are far from where we should be with respect to Black representation among senior leaders. We have a long way to go, but as we’ve reached the end of February and Black History Month, we want to reflect on some of the positives and progress in the industry by highlighting a few leaders, organizations, and efforts that are driving meaningful change for more Black representation in VC. These groups and individuals (and others!) are making history. At Venture Forward, we share the mission of shaping a more diverse, equitable, and inclusive (DE&I) industry, and we’re excited to recognize their accomplishments.
Unlocking Capital & Building Wealth
Capital is the backbone of opportunity and a driver for success in the venture industry. Systemic and institutional barriers have historically limited Black investors from accessing capital or participating in the wealth creation of VC, but several recent efforts have been encouraging:
- Backstage Capital raised more than $1 million for a new fund on private investing platform Republic from anyone (including unaccredited investors) thanks to the SEC Regulation Crowdfunding rule, providing an opportunity for new and underrepresented limited partners (LPs) in VC.
- Acrew Capital launched a new fund targeting LPs from underrepresented backgrounds to help build wealth for these investors.
- Venture-backed startup Finix allocated 10% of its Series B round for 80 Black and Latinx investors via a Special Purpose Vehicle, inspired by the Diversity Rider term sheet which was created by Alejandro Guerrero to increase diversified representation on cap tables.
- A group of VCs are leading a VC Diversity Pledge that will make room for HBCU endowments as LPs in venture funds, allowing them to participate in the asset class and benefit from returns to build wealth at their institutions.
- Several groups have developed scout or fellowship programs such as Lightspeed, Indie VC, and VC Include. These programs offer unique opportunities for newer investors to receive capital, guidance, and mentorship while learning the ropes of being a VC.
Accessing Education & Building Community
VC has traditionally been an apprenticeship and mentorship industry. On the one hand, the fundamentals and mechanics are more academic in nature but are rarely taught or accessible. On the other hand, the “art” of VC comes through experience and learning from other investors in real world situations. VC University—produced by NVCA, Venture Forward, and Startup@BerkeleyLaw—democratizes access to VC education for anyone interested in learning about the nuts and bolts. VC University also provides firsthand knowledge from investors on how to navigate the industry and build a career. The scholarship and mentorship programs offer accessible opportunities for new or aspiring VCs from underrepresented backgrounds. Other initiatives making an impact in the education and community building space:
- BLCK VC’s Black Venture Institute provides access, insight, and community for Black operators looking to become angel and venture investors. Their Breaking into Venture program offers participants a successful transition into VC at the Analyst, Associate, and Senior Associate levels.
- The Black Economic Alliance Foundation, Spelman College, and Morehouse College announced the creation of the Center for Black Entrepreneurship, the first-ever academic center of its kind to produce, train, and support a new generation of Black entrepreneurial talent.
- 26 VC firms partnered with Valence, a professional network for Black talent, to launch the Valence Funding Network to connect Black entrepreneurs with VC firms.
- HBCUvc expanded its internship program to increase equity and access to opportunities in VC.
- Some VC firms have taken a broader approach in their programming. For example, General Catalyst has launched a “Learning Series on Racial Justice” with six sessions spanning from the history of structural racism to racial equity and access in VC and tech.
Recognizing Black Investors & Founders
Celebrating the success stories, rising stars, and strong talent within the Black venture community shines a bright light on our industry’s future and its leaders. We see the immense value traditionally underestimated communities bring when having the opportunity to fully access, participate, and thrive in the ecosystem. Several of our partners have showcased this talent this month:
- All Raise’s “Black Forces of Nature” highlights 28 extraordinary Black women who are leading, shaping, and funding our future.
- Kauffman Fellows spotlighted 28 Black fellows who are building and funding the future of VC.
- PitchBook’s 53 Black founders and investors to watch in 2021 lists Black founders and investors who are making a big impact through the trajectory at their organization, their contributions, and their activism and advocacy for the Black community.
- Crunchbase featured several notable Series A and Series B rounds raised by Black founders in 2020, including one company (Calendly) which joined the VC-backed unicorn ranks.
On March 9, NVCA will recognize several Black investors for their contributions to the industry and rising through the ranks as VC leaders. BLCK VC, led by cofounders Sydney Sykes and Frederik Groce, will receive the inaugural DE&I Impact award for their significant impact towards advancing a more diverse, equitable, and inclusive venture ecosystem. Brentt Baltimore, principal at Greycroft, and Dan Gebremedhin, partner at Flare Capital Partners, are two of the Rising Star award recipients, having demonstrated a mastery of VC investing in a relatively short time in the industry and being widely recognized as emerging leaders.
In March, NVCA, Venture Forward, and Deloitte will release the third edition of the VC Human Capital Survey, with the latest trends on the workforce demographics and talent management practices at VC firms. We look forward to continuing the discussion with the industry to maintain the momentum to increase Black representation throughout the year!
Stay up to date on the latest at Venture Forward, our DE&I work, and other efforts across the ecosystem.