OAKLAND, Calif. October 18 - Reuters - Four venture capital funds 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 Latina founders, while Supply Change Capital and 2045 Ventures have black founders, according to The Ally Capital Collab.
Protests on racial injustice in the past 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, more than $7 billion were invested in African-American startups in the first nine months of 2021, up from less than $3 billion on average in the previous six years.
Until now, that represents around 3.2% of venture funding to all U.S. startups.
There's a lot of investors that remain relevant to us, but who had never 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 give each other in due diligence and lend confidence to investors, as many minority venture capitalists lack Silicon Valley networking to raise funds.
Representatives from all four funds are scheduled to speak at an event at the Milken Institute in California on Monday.
In 2014, the national venture capital association launched an arm called Venture Forward to try to tackle the lack of diversity in the industry.
If we can help move the needle on the investor diversity. it's going to change inherently 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 on improving racial or ethnic diversity at the partner level.