Jane Lanhee Lee

OAKLAND (California) – Monday saw four venture capital funds that were founded in America by women of color. They are now joining forces under The Ally Capital Collab, to increase their fundraising capabilities and invest more.

According to The Ally Capital Collab, the 22 Fund and WOCstar Fund are founded by Black women, while Supply Change Capital Ventures and 2045 Ventures were started by Latinas.

Protests last year against racial inequality have spurred a movement towards diversity in venture capital, though startups led by people of color are still under-represented.

Crunchbase reports that investments in Black- or Latino-founded startups accounted for $7 billion over the nine-month period. That’s an increase from the $3 billion average in the six prior years.

This represents 3.2% funding for all U.S. startup companies.

“There are a lot more investors that fundamentally align with us, but never had access to our funds. Gayle Jennings O’Byrne from the New York-based WOCstar Fund said that this is because we are coming together to ensure people know all about us.” 

She said that creating an organization like The Ally Capital Collab for funds to work together makes it possible to aid each other in due diligence and give investors confidence, as many minority venture capitalists lack the Silicon Valley network to raise funds. 

Representatives from each of the four funds are scheduled to address an event at California’s Milken Institute on Monday.

The National Venture Capital Association, an industry association, launched Venture Forward last year to address the problem of lack diversity.

Maryam Haque (Venture Forward executive director) stated that if Venture Forward can improve investor diversity, it will inherently alter the composition of founders. According to Venture Forward’s latest survey, there has been very little improvement in racial and ethnic diversity among partners.