- Black Founders Matter recently announced it closed $3 million for its first fund. These are the details.
Black Founders Matter – a fund that identifies Black-led ventures as an investment vertical – recently announced it has attained $3 million in committed capital toward a planned $10 million Fund I.
Separately, Black Founders Matter (BFM) announced an initial tranche of 10 early-stage portfolio investments out of Fund I: participation in seed funding rounds for Hued, which in August closed a $1.6 million seed round; participation in the seed rounds for both New York City-based BIPOC female-led Glow Up Games and Allyson Felix’s Los Angeles-based Saysh during the second half of 2021.
BFM – initially formed by former startup founder Marceau Michel – is on a mission to disrupt the historical pattern-recognition bias in the venture capital world. And this bias has led to the exclusion of the underrepresented, especially Black-founded ventures, and the overwhelming majority of the top-performing startup leaders for decades have been white men as a result.
Michel and Managing Director Himalaya Rao-Potlapally launched the fund in 2020 and started to gain traction with individual and institutional investors. The BIPOC and queer duo are raising BFM’s fund in the spirit of a grassroots community-driven campaign. And they are utilizing their combined relationships within the Black, Indigenous and people-of-color (BIPOC) community to share exclusive opportunities with LPs aligned with BFM’s mission of financial justice, diversity and inclusion.
Black founders have an extraordinarily difficult time raising capital. A record $147 billion worth of VC funding was invested in American startups during the first six months of 2021, according to Crunchbase News. But just 1.2% of that went to Black founders while Black people composed 13.4% of the U.S. population in 2020. Black women founders had obtained only 0.34% of all VC investment in 2021 through July 16. But the VC dollars flowing to those founders up to that point, $494 million, already had outstripped the 2020 total of $484 million.
BFM Investment Thesis & Initial Portfolio Investments
BFM’s investment thesis is industry agnostic. And the firm prioritizes early seed startups, at the largest funding gap stage with checks north of $100,000. And they often syndicate with their network funds and participate in a startup’s first institutional-investment funding round. BFM has reserved half of its first fund to participate in follow-on investments. A central tenet of BFM’s strategy is to ensure that all its investments have a pathway to subsequent funding and liquidation. Black Founders Matter partners with industry-specific lead series A to series C firms to create a clear funding and network trajectory for its portfolio companies. In doing so, BFM ensures that its companies are resourced to scale and be acquired.
KEY QUOTES:
“Black is the new vertical. The entire emphasis of our fund is about creating accessible venture capital for Black entrepreneurs and diverse innovative problem solvers. In the same way, we also want to be a resource to other emerging funds, to provide them access to high profile deal flow. Accessible venture capital represents the new wave of venture practice.”
— BFM founder Marceau Michel
“BFM looks for innovation outliers in their respective spaces and industries. We are taking an intentionally new approach to generate venture capital success and financial returns. By shifting the focus off archaic pattern-matching, we are able to prioritize innovation and lean into the differences that make our companies successful. Black Founders Matter showcases new investment strategies that can be both financially lucrative and holistically inclusive of much needed diverse perspectives.”
— Managing Director Himalaya Rao-Potlapally
