Since its pilot fund in 2016, Mendoza Ventures has focused on investments in such areas as fintech, AI and cybersecurity. The venture capital firm has also found success prioritizing diversity in its investment decisions. Roughly 80% of the firm’s portfolio consists of startups led by immigrants, people of color and women.
Despite this progress toward closing the capital gap, Senofer Mendoza, founder and general partner at Mendoza Ventures, said the team has long known a VC firm that invests in companies at particular stages of growth can’t do this work alone.
On Monday, Mendoza Ventures announced the launch of Mendoza Impact, a nonprofit working to close the wealth gap by funding and supporting underrepresented founders, funders and fellows.
Mendoza Ventures’ third fund of $100 million focuses on Series A investments and beyond with a revenue floor of $1 million, Mendoza said. The firm previously had invested in earlier-stage companies, but Mendoza said that in 2021 they felt there was a lot of seed-stage money and diverse representation was needed further down the line.
Mendoza said the new nonprofit is to meet founders at seed stage without the immediate expectation of the returns that come with an angel or typical seed-stage fund investment.
“As long as I’ve been doing this work, I’ve been very aware that the capital gaps are kindergarten to post-grad problems, and it is really hard to address all of those places with just a venture capital firm,” Mendoza told BostInno.
Four-startup cohort
Mendoza Impact’s three areas of focus will be supporting founders, funders and fellows.
The nonprofit will continue work started by Mendoza Ventures in up-skilling underrepresented MBA students and placing them in venture capital firms as fellows. Mendoza said her firm has been hosting fellows since 2018, but they plan to expand this program to other firms with the nonprofit.
Starting this week, Mendoza Impact will kick off a micro-community venture program to help founders scale their businesses. The nonprofit has created a pilot cohort of four startups that will complete a 12-week, largely virtual program, Mendoza said. These companies are GoodFynd, WealthBuild, EKOS.ai and Straylight Systems.
The teams will connect with other startups and learn about topics like AI and board management from experts. The first cohort is arriving in Boston this week for a few days of in-person activities.
New executive director
The nonprofit will be led by Jen Hartnett-Bullen, who joined Mendoza Impact as executive director in May. Hartnett-Bullen had a 13-year career at State Street Corp., most recently serving as founding demand lead for the custodial bank's talent-marketplace team. She’s also a longtime volunteer for the Pan-Mass Challenge as part of the volunteer head staff.
“We’re not trying to be an accelerator, incubator or a venture studio. We are bringing together these founders to create a micro-community and enriching their capabilities and knowledge around three very simple concepts: people, product and money,” Hartnett-Bullen said. “We’re talking to them and engaging with them in a very practical, tactical and applicable way.”
Hartnett-Bullen said the funding element of Mendoza Impact will involve working with diverse VC firms who want to direct their investments to underrepresented founders. She said they plan to start seeking funds in 2024.
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