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Top 7 Venture Capital Firms
If you're a person of colour or female founder of a company that has high growth potential, you'll undoubtedly want to work with a venture capital firm to access the much-needed funding. Generally, venture firms are run by individuals who enjoy the responsibility of investing in startups and watching them grow. Over the past few decades, there has been an impressive growth in the number of minority-owned venture capital firms.
Nonetheless, issues related to diversity in venture capital still abound. According to the National Venture Capital Association, only 4% of venture capitalists are Black. Besides the relatively low number of Black-owned venture capital firms, investments in Black startup entrepreneurs account for less than one percent of venture capital. Working with a Black-owned venture capital firm can go a long way in bridging the racial diversity gap in the industry.
More firms are looking to diversify their investments by partnering with minority-founded startups. As an entrepreneur, there's never been a better time to select a company that's not only Black-owned but also has a reputation for supporting black founders. That said, here's a look at the top seven Black-owned venture capital firms you may want to work with.
Bay Street Capital Holdings
Bay Street Capital is a Palo Alto-based wealth management, financial advisory, and investment advisory firm. It was founded in 2018 to inspire and nurture the next crop of startup entrepreneurs and fund managers. Despite being relatively new, Bay Street Capital has carved a niche in the market by investing in companies with a high potential to outperform.
The firm's investment philosophy is grounded in market sentiment, positioning, fundamentals, technical analysis, rule-based drawdown, and asymmetric risk. Bay Street Capital invests and manages portfolios intending to sustain and increase the total income and value of assets. This is a departure from other firms whose main priority is maximizing returns. At Bay Street Capital, the focus is on managing volatility and total risk when making investments.
Since its formation, the firm has been the market leader in advocating for minority and emerging startup entrepreneurs and fund managers. Its focus investment markets are; higher education, Taft-Hartley Plans, government entities, foundations, endowments, and corporate plans. Bay Street Capital not only provides thoughtful investment guidance but also custom investment strategies suited to your organization's unique goals.
Bay Street Capital Holdings' investment strategies go above and beyond attaining clients' goals. The firm also focuses on fostering long-term relationships built on trust, honesty, and confidence. It currently manages more than $33 million and provides investment advice to 65 clients.
This impact-oriented venture firm primarily invests in technology-driven scalable companies committed to creating a positive social, economic, and environmental impact. DiverseCity Ventures also provides investment advisory services to pre-seed startups and targeted investments in outstanding startups. Its social impact investments focus on affordable housing, cultural equity, communication, EdTech, and sports and entertainment markets.
DiverseCity Ventures' economic investments focus on pre-seed companies in poverty alleviation, entrepreneurship, economic development, basic income, and cryptocurrency markets. Its environmental investments focus on CleanTech, water, food, energy, and sustainability companies. As the name suggests, DiverseCity thrives where diverse views intersect. It leverages its expertise to address inequalities in entrepreneurship, technology, and venture capital.
As a pioneer black-owned venture capital firm, DiverseCity focuses on fighting poverty, a critical socio-economic issue among minority communities. As such, the firm endeavors to close the wealth, wage, and funding gap by enlightening founders to focus on economic, social, and environmental problems. DiverseCity Ventures is based in Sacramento, CA but also has offices in Sheridan, WY.
Founded in 2016, this Black-owned venture capital firm's objective is to catapult minority founders from high potential to high profitability. 1863 Ventures primarily focuses on lowering the risks and barriers to wealth building, particularly for black-owned startups. To help these entrepreneurs realize their goals, 1863 Ventures guides them in implementing best practices, processes, and systems.
In doing so, the companies improve their operational efficiency, minimize execution risk, and catalyze growth. 1863 Ventures has an ambitious plan to create $100 billion in new wealth over the next decade. It will do that by identifying high-potential startups and investing in them. The firm seeks to bridge the entrepreneurial and racial inequality gap by focusing on Black and Brown-founded startups.
1963 Ventures' business philosophy is guided by the fact that entrepreneurship is the most viable pathway for minority communities to build wealth. As such, it facilitates them by reducing the barriers and risks these founders face in their entrepreneurial journey. So far, the venture capital firm has generated $125 million from the service-based industry, $60 million from the retail industry, and $15 from the SaaS industry. It has also raised over $7 million in equity investments, non-dilutive funding, and debt financing.
This venture capital firm helps women of color access Series A, pre-seed, and seed-level funding. Traditionally, women of color have been left behind by venture capital firms, something Fearless Fund seeks to address. By providing them with funding, the company positions these entrepreneurs and their firms to become even more attractive for further venture investment.
Fearless Fund's mission is to bridge the significant gap in investment funding for Black women founders and enable them to build growth-aggressive and scalable companies. The venture capital firm is built by and for women of color. Its investments are sourced via private sales and pre-seed, seed, and Series A rounds. So far, the firm has invested in more than 20 companies founded by women of color.
Since starting, Fearless Fund has attracted the attention of corporate founders who support its initiatives. These include Facebook, Coca-Cola, Porsche, Microsoft, Spanx, Bumble, UPS, and MasterCard. Its institutional investors include PayPal, Fifth Third Bank, The Jump Fund, Bank of America, Invest Atlanta, and Insight Partners.
Harlem Capital Partners
This Venture Capital firm was founded in 2015 to integrate founders of color into the investment and entrepreneurial ecosystem. It primarily focuses on early-stage businesses and seeks to create impact by giving ownership to black and women founders. Harlem Capital's core philosophy is that these minority groups have immense economic value but often get overlooked by traditional venture capital firms.
As a black or minority founder looking for venture capital, chances are that you prefer to work with people with a similar background. Black-owned firms like Harlem Capital can help you access the much-needed funding because they are willing to support and invest in your startup. Harlem Capital plans to support more than 1,000 diverse founders in the next twenty years. Doing so will help the firm to achieve its vision for the future of venture capital funding.
Harlem Capital currently boasts 39 investments spanning three countries, 14 cities, and 23 industries. It also boasts a team of dedicated and diverse investors led by the firm's managing partner, Henri Pierre-Jacques. By working to create a new generation of venture capital, the firm hopes to bridge the wealth inequality gaps, especially in minority communities.
MaC Venture Capital
If you're a founder of a tech company that creates in-demand products and you're looking for venture capital, this may be an excellent fund to work with. MaC Venture Capital primarily invests in technology companies that leverage shifts in behaviors and cultural trends to create high-demand products. The seed fund resulted from the merger between M Ventures and Cross Culture Ventures, two California-based venture firms.
MaC Venture Capital has more than 100 investments in its portfolio. Besides providing its founders with venture capital, the company also provides advice and network building to ensure that their growth is sustainable. Over the years, MaC Venture Capital has made a name for itself by using a proven investment strategy to identify and invest in startups with a potential for high returns. It mainly focuses on black and minority founders.
As the name suggests, this venture capital firm invests in startup founders who've gotten relegated to the backstage by main funds. According to the firm's founder, Arlan Hamilton, Backstage Capital focuses on people of color, women, and LGBT-owned startups because they've largely been underestimated and overlooked. By supporting such startups, the firm helps level the playing field by bridging the gender and ethnic gap.
So far, Backstage Capital has invested more than $2 million in 50 startups. Notable beneficiaries include Tinsel, a startup that designs wearable tech jewelry, and Kairos, a company that creates facial recognition technologies. Besides financial support, Backstage Capital also provides sound advice that helps startups under its wing to launch and scale.
More venture capital firms are looking to diversify their portfolios. It leads to better and more sustainable investment gains by making them less susceptible to market volatility. There's no better way for a venture capital firm to diversify than supporting companies started by BIPOC founders. Diverse-owned firms tend to outperform typical startups, making them attractive to venture capital firms.
As a startup entrepreneur, the rise in the number of companies supporting businesses like yours gives you access to a larger pool of venture funding. Bay Street Capital Holdings is one such venture capital firm. So, if you're looking to scale your startup with the help of a Black-owned investment firm, schedule a meeting with the financial experts at Bay Street Capital today.