There's a new fund in Chicago that wants to support more founders of color in the city and across the U.S.
Capitalize VC announced its launch this week, with plans to raise $10 million for its initial fund. Its goal is to invest in early-stage technology companies and lifestyle brands led by Black and Latino founders, with plans to back around 40 startups from this first fund. Its average check size will be between $100,000 and $200,000.
Led by founder Tessa Flippin, a former investor at Chicago's TechNexus Venture Collaborative and the founder of fintech startup La Plataforma, Capitalize will invest in pre-seed rounds for diverse startups. The fund joins a growing group of emerging VC firms in Chicago that are looking to write checks in Black and Latino-owned startups, which have traditionally been overlooked by venture firms in Chicago and across the country. Black founders, for example, received just 3% of the $147.6 billion in venture capital that was raised nationally in 2020.
Firms like LongJump, Chingona Ventures, Fifth Star Funds, Tech Rise and others are looking to flip that narrative in Chicago. And Capitalize is yet another effort that aims to put millions in the hands of diverse founders.
"I think we have a lot of momentum right now (in Chicago)," Flippin said. "I'm excited to join this cohort of funds that are coming in to back these founders. There are a lot of very talented Black and Latinx founders in Chicago."
Flippin said her fund and groups like LongJump and Fifth Star plan to collaborate on deals and serve as pipelines for one another. Capitalize is targeting tech firms nationally that are working within fintech, advertising tech and startups focused on the future of work. As for its lifestyle investments, it's looking for Chicago and Midwest direct-to-consumer brands specializing in food and beverage, health, wellness and retail.
Capitalize expects to hold its first close in December, and begin writing checks in early 2022. Flippin said she started the fund after her experience struggling to raise funding as a founder. Now on the other side of the table, she believes her fund can play an important role in making sure Black and Latino founders have access to the early capital they need to grow their businesses.
"As a firm, we believe as you change the people who write the checks, you change the founders who get them," she said.
