Washington, D.C.-based VilCap Investments, part of venture capital firm Village Capital, has raised a $17.7 million fund from 29 investors including Steve and Jean Case for fund to continue investing in social enterprise startups around the world.
"We started seven years ago trying to reinvent how we help entrepreneurs and inventors trying to change the world," Village Capital CEO Ross Baird told DC Inno in an interview. "What's different about us is how we fund them, using peer-selection to pick the companies. We go after the people and industries looking at real problems in energy, water, health, areas like that."
VilCap Investments raised $13.2 million just last summer, with money going to startups doing things like using data management to improve farming, provide power to rural homes and arrange telemedicine services for people with limited or no access to healthcare.
"We've invested in 60 companies since we started. The new fund will go to 75 investments over the next four to five years," Baird said. "85 percent of the time we were the first institutional investor. Other institutions usually tell them 'hey we'll invest if you find someone else to take the lead,' and that's us. We want to be the signaling effect for much larger investment."
The money is also aimed at leveling the playing field with regards to who gets funded. So far, 40 percent of Village Capital investment has gone toward women-run companies compared to the average of 5 percent of all investment, and 20 percent went to people of color compared to the just 1 percent average of all investment, a major improvement, but Baird wants to do more.
"When investors say there's a pipeline problem [with finding women and minorities to invest in], I honestly believe investors are just not trying hard enough to build a pipeline."
"We want to be the signaling effect for much larger investment."
Steve and Jean Case will also have an additional connection as Revolution and Case Foundation senior vice president of communications Allie Burns is joining Village Capital as its first COO. Baird has worked closely with the Cases for many years, and described the hire as a natural extension.
"It's a really exciting hire for us," Baird said. "It's a sign of more collaboration and investment to come."
The original plan for the new fund was to raise just $15 million, but the investors were so eager that it ended up $2.7 million above that goal. The new funding is fairly evenly divided among all of the investors, with a grant from USAID underwriting the cost of management so that the fund itself can be devoted to investment. That matters more than you might think, Baird said, as a major issue preventing investment in many parts of the world is how expensive it is just to be able to invest at all.
"I think it's best to invest in people who live near the problems they are trying to solve," Baird said. "That means looking all over, not just Silicon Valley or New York."
Editor's Note: An earlier version of this story's headline only included the name Village Capital. The fund was raised by VilCap Investments, which is affiliated with, but not the same as, the non-profit Village Capital.
