Austin Clements was ready to give up.
He quit his venture capital job in 2019 to try and start his own fund by giving seed money to tech startups founded by entrepreneurs of color, but investor interest was low. Last June, he and his co-founder figured that before throwing in the towel, they’d write one last mass email to anyone they’ve ever introduced or spoken to about their fund – a group of around 300 people. – to ask for help.
“It was our Hail Mary,” remembers Mr. Clements, 38, who is black. This time, as soon as they clicked “send,” their inbox started to fill with responses from people eager to participate.
Long known for its insular character, the world of venture capital has been trying to open up for a year. According to a 2020 Morgan Stanley survey of venture capitalists, 43% said finding opportunities to invest in companies with non-white founders was a priority, up 10 percentage points from the previous year. ‘last year. 61% said the Black Lives Matter movement affected their investment strategy. Respondents to the survey included a higher proportion of non-white venture capitalists than the industry as a whole. More investors have flocked to black-led venture capital funds: of the new funds launched in the first quarter of this year, 10.4% were started by black-led companies, or more double the 2019 rate, according to research firm Different Funds.
The impact is also being felt in black-founded businesses, which attracted around 1% of VC funds annually from 2016 to 2020. Although levels are still low, signs of an increase are underway. : Black founders received 1.4% of all US venture capital funds, according to data from Crunchbase. Last year there were a record 306 venture capital investments in American companies founded by blacks, nearly double the number five years earlier.