So You Want to Fund Black Founders

I was one of the first Black investors to be promoted to Partner at a venture capital firm. At the time (2015), I was also one of the youngest, having just turned 31 years old.

I have been in the venture industry since 2011, beginning as an intern in Kapor Capital’s inaugural Summer Associates program. I have never seen a wave of pro-Black commentary and actions like the one we are all witnessing today.

Over the past few weeks, more people than ever before have aligned themselves to the #BlackLivesMatter movement, including people in tech. Specifically, many venture capital firms are now opening their doors to fund more Black founders. Many of these firms have reached out to me, asking what ways they can be helpful during these times. Rather than focus on the history of venture and its deep-rooted exclusionary practices, I am writing this piece as a guide. After nine years as a venture capitalist (which is considered “veteran” status in the Black investment community), I have learned some things that I think can help, and I’m going to keep it simple.

Here are 3 immediate actions VC firms can take:

1) Hire Black Investors

Most firms have reached out to Black founders directly on Twitter to take pitch meetings and offer office hours. Instead, start with diversity at your own firm. This benefits you in two ways:

Adding Black investors at your firm will bring more diverse deal flow and perspectives.

81% of all VC firms do not have a single Black investor. 33% of the Kapor Capital investment team is Black. 34% of our first-time investments have a founder of a racially underrepresented background. Diverse investors have access to diverse founders.

The Associates and Principals of today are the Partners and Managing Directors of tomorrow.

Investing in talent today means investing in the leadership of tomorrow. At Kapor Capital, we have run a Summer Associate Program since 2011. (I was in the first class). We have an incredibly diverse, scrappy, and well-educated pipeline of trained investors that are ready to be hired. Also, BLCK VC and HBCU.VC are other organizations working to advance the success of Black investors.

But let me be clear.

If you do not publicize the jobs that are available at your venture firm, then you are intentionally being exclusionary.

It does not matter how much Black talent is available for hire. People can’t get a job that they don’t know exists.

At Kapor Capital, our diversity is by design, our inclusion is intentional, and it starts with publicly posting available job openings.

You can learn more here about how we do it.

Awesome, you’ve got your house in order. Now, let’s talk about Black founders.

2) Fund Black Founders

Kapor Center has covered in great detail the leaky tech pipeline and how it shows up in venture funding. The problems start in early childhood education, continue through higher education, and result in a tech workforce that lacks diversity, inclusion, and equity.

As much as founders appreciate office hours, mentorship, and free advice, what they really need are investor checks to get to work.

Only 1% of venture backed companies are led by Black founders. Yup, out of 100 funded founders in a room, only 1 is Black. Let that sink in.

As venture capitalists, we are consistently advising our portfolio companies not to spend too much time fundraising, and closing as soon as they identify the right lead for their round. The longer the fundraising process, the more time a CEO must spend away from their core business activities.

If you are not seriously interested in writing checks to Black founders, then save the lip service and skip the PR stunts.

But if you are serious, the answer is straightforward: put your money where your mouth is.

3) Hold Your Firm Accountable

In 2015, Kapor Capital publicly launched a $40M initiative focused on diversity in technology, with $25M earmarked for venture capital. Soon after, we created the Founders Commitment, a first-of-its-kind initiative where portfolio founders set diversity and inclusion goals for their individual companies. In 2019, we released the Kapor Capital Impact Report, highlighting our learnings over the last eight years of investing in gap-closing social impact companies and underrepresented founders. In the report, we outlined why financial returns must not be the only measure of a company’s success, and why diverse backgrounds give founders a competitive edge.

Your public commitment does not have to look like ours, but it does need to be something you are serious about being held accountable to. State your goals, measure your progress, and publish your results.


Tech has figured out some of the world’s hardest problems and prides itself on being the “special” ones, who can solve anything it chooses to.

How about this time, tech chooses to solve America’s longest-standing problem: systemic racism. How about this time, tech starts by fixing itself.

I’m here to help. Reach out to me on Twitter @MrStartup or via email at brian@kaporcapital.com


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Talk Soon!
Michael Berhane, Founder of POCIT
Brian Dixon
Brian Dixon

Investment Partner @ Kapor Capital. Kauffman Fellow: Class 21. Babson MBA. Northeastern Husky. @MrStartup on Twitter

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