A St. Louis-based venture capital firm plans to deepen its investment in minority-led startups with the launch of a new $25 million fund and has expanded its leadership team to help guide that strategy.
Ascend Venture Capital last week launched the new fund, which the firm says will focus on backing companies that have Black, Latino, women, immigrant and LGBTQIA+ founders.
Ascend, which was founded in 2015 and describes itself as a “micro” venture capital firm, focuses on providing pre-seed and seed stage investment to data-centric technology startups. It has invested $13 million and its assets under management total $18 million, the firm said. Its new fund will focus on providing follow-on capital, with larger check sizes, to companies with diverse leadership. With the new fund, the venture firm also has added a new executive to its team.
Ascend already has invested in several minority-led startups since its founding seven years ago. Of its 18 portfolio companies, seven are led by underrepresented founders, Ascend General Partner Dan Conner said.
“The reason is because of the way we source our deals,” he said.
Rather than relying on trusted sources or networks to connect with potential investment targets, Ascend relies on a strategy Conner has described as encyclopedic in nature. It has reviewed more than 10,000 companies to make its investments, a strategy Conner says has helped find and connect with companies that have diverse leaders.
Ascend has yet to raise any funding for the new fund just launched, Conner said, but he said he’s confident the fund will reach its $25 million target.
“The reception has been staggering,” he said.
Ascend expects the majority of investments from its new fund will be directed toward and “double down” on its existing portfolio companies, with the fund being a vehicle that can provide larger checks to those firms and participate in later-stage venture rounds like Series A and Series B financings. The new fund could also make first-time investments into startups, Conner said.
As it expands its focus on investing in diverse founders, Ascend has also added Yinka Felati as a partner at the firm to help guide its strategy. Faleti previously was executive director of nonprofit Forward Through Ferguson, an assistant circuit attorney in the city of St. Louis and senior vice president at the United Way of Greater St. Louis. In 2020, he ran for Missouri secretary of state as a Democrat, losing in the general election to Republican Jay Ashcroft.
“In 2021, after I wrapped up the campaign, I was thinking of how could I next best serve and in what way could I next best make an impact,” Faleti said. “The more I thought about what Ascend is doing in terms of creating an opportunity for founders and for investors as well, it just really lined with what I want to do at my core, which is to reduce the inequities in our society. One way to reduce the inequities is to back founders who are typically overlooked or underrepresented."
