Venture Capital Counts More Black Check Writers Than Ever Before
However, representation continues to lag and multiple systemic barriers remain
The world is changing. Venture capital is struggling to keep up.
The best venture capital investors anticipate emerging trends, seize opportunities in untapped markets, and invest in the people who are inventing the future. But there’s a gaping hole in the current venture ecosystem’s investment strategy: a persistent lack of diversity.
According to The US Census, the country will be majority/minority by 2045. As demographics change, so does economic influence. Yet fewer than 3% of venture capital partners are Black and in the record-breaking first half of 2021, Black founders received a mere 1.2% of the $147 billion invested in startups.
Today, BLCK VC in partnership with Silicon Valley Bank, is sharing our inaugural State of Black Venture report. We hope our report will serve as a baseline to track our progress over time. We researched and surveyed the Black partners and fund managers — the “check writers” — to learn more about who has the power to hire, promote and put money to work.
We invite you to read the full report here.
The number of Black partners is increasing.
There are more Black partners than ever before, driven by a sharp increase in Black fund managers. We’re excited to see this positive momentum, but Black representation as a percentage of overall investors remains stagnant.
Black fund managers face barriers to capital.
Black fund managers raised 46% smaller funds than their non-Black peers. Smaller funds can limit the number of investments and check size; these factors can negatively impact managers’ ability to build wealth through returns on their investments.
Black partners are leading the change.
Black partners have had an outsized impact on the next generation of Black investors and entrepreneurs. They mentor and hire more up-and-coming Black investors. They invest disproportionately more money in Black-led startups. In other words, hiring and promoting Black investors leads to more investment in Black founders — a stated goal of many venture firms. However, the largest firms — those with billions under management — have little-to-no senior Black investors.
Article from BLCK VC Perspectives.