A strong lineup of venture capital firms are committing more money and attention to founders of color as part of a new initiative led by Austin accelerator DivInc.
Wild Basin Investments, Next Coast Ventures, Notley Ventures, Golden Section Venture Capital, Moonshots Capital and Ecliptic Capital will provide financial support to DivInc and offer mentorship, networking and other resources to DivInc's portfolio companies.
In an initial move, Wild Basin Investments pledged up to $25,000 to match the next 10 VC general partners who join DivInc's Founders Circle, which has a minimum donation of $2,500. The effort would raise up to $50,000 to sponsor 20 startup founders in DivInc's cohort.
The new partnerships represent a new level of support for DivInc, which also has working partnerships with several other prominent Austin venture and social impact organizations. And it comes as the nonprofit accelerator is working with a new cohort of startups focused on social justice innovations. That new effort also has a broad base of support from VCs, accelerators, founders and community organizations.
“We know that even when people of color and women founders get in the door and in front of investors, they’re held to some kind of different standard. Most times, they have to overcome higher perceptions of risk and trust than their white, male counterparts. Much of this is grounded in bias,” DivInc CEO Preston L. James II said in a news release. “At the end of the day, we want to create mutually beneficial relationships between DivInc, diverse founders and VCs. It's about creating real and equitable opportunities for greater success for the founders, be it mentorship, network connection, or direct investment. These partnerships are about making things happen.”
Austin's startup and tech communities have come together in a variety of ways since the killing of George Floyd in Minneapolis. DivInc's social justice accelerator was among the first.
Another is Notley Tide, a new initiative led by social good VC firm Notley, which is gathering monthly donations from the community in an effort to stop systemic injustice against people of color. The money flows to its racial justice partners, which include Austin Justice Coalition, University of Texas Center for the Study of Race and Democracy, Grassroots Leadership, Texas Civil Rights Project and MOVE Texas.
Meanwhile, many tech executives and startup leaders have signed an open letter condemning racism and standing in solidarity with the Black community. And Tech Can Do Better has shared a document with best practices employees can bring to their leadership to take action now.
According to the Harvard Business Review, only 1 percent of VC-backed entrepreneurs are Black and TechCrunch reports that only 3 percent of venture capital investors are Black.
"If VC's don’t agree that there is currently a problem in the system, then they can’t really succeed in helping to create an impactful and lasting solution," DivInc wrote in a blog post. "People are invariable and complex. Relationships require positive honesty and attention in order to work toward a long term outcome, and it’s the investor’s responsibility to nurture those dynamic intricacies with potential investment portfolio companies."
