Black founders have raised a small portion of venture capital funding over the past decade. How can the problem be solved? There is always one answer to this question: allocate more capital to black entrepreneurs.
But that will still happen. In fact, black founders receive less than 1.5% of all VC funds, whether in a bull or bear market. So, what’s up?
Perhaps it’s time this discussion focused on Limited Partners (LPs), particularly as they sit at the top of the VC power structure. According to MacKeever Conwell, founder of Rarebreed Ventures, unless LPs allocate more money to diversified funds or managers, there will always be some shortage of capital that can — and potentially will — be allocated to diversified founders.
At the institutional level, responsibility for change lies with those who have the power to make it. Supporting diversified funds means supporting diverse thinkers and their networks. it is necessary, Then pressure LPs to support more funds that prioritize diversity, support diversified funds and managers, and set up specialized funds to invest in diversified founders.
“Reward actual behavior, not intention.” Mixtrose co-founder Kerry Schrader
The amount of capital allocated to diversified individuals needs to be increased, and LPs should do so first meditation and restore our own core values to advance economic equality.
“There will always be reasons to wonder how much they really care,” Conwell said. “But we’ll see about that in time.”
order of responsibility
Asosa Johnson, co-founder of Black Women Talk Tech, told TechCrunch that LPs have the power and flexibility to require at least some of their capital to be allocated to diversified founders as fund managers as a funding source. Grateful for her.
Referring to fund managers, he said “their feet don’t burn”. “After all this time, they must be held there.”