Black Founders Matter urges VCs to commit to diversity – TechCrunch
As a child, Marceau-Michel always asked for a quarter.
He knew that if he kept asking for a quarter, he would have a dollar one day. Then he would be on his way to having two – a slow but deliberate build to amass his own small fortune.
Today, at the head of the venture capital fund Black Founders Matter, Michel has kept this mentality. The fund today announced the creation of the Commitment 25 by 25which encourages venture capitalists to pledge to invest a quarter of their funds in BIPOC’s female founders by 2025. The pledge also requires venture capital firms to have 25% of their staff comprised of BIPOC women , believing that increasing diversity behind the scenes will help pivot more deal flow to marginalized communities.
“It’s about changing the power dynamics in venture capital,” Michel told TechCrunch. “You have to start with those who are left behind and bring them to the starting line.”
Michel was inspired to start the engagement after realizing his own investments leaned toward black male founders. This has led him to focus on investing in black women and has added five companies to round out his portfolio of 10. His new initiative hopes to encourage VCs to prioritize investing with the diversity to improve the industry’s heartbreaking fundraising statistics.
White women receive a marginal share of total venture capital funding, but the amounts minority women receive are much smaller. Last year, women collected only 2% of the record $330 billion in venture capital. Of this 2%, less than 0.50% went to black women, about 0.51% went to the founders of Latina, about 0.71% went to Asian women, and a simple 0.004% went to Indigenous founders, according to Crunchbase data.
“If a fund doesn’t want to make that commitment…the question is why.” Marceau Michel, founder of Black Founders Matter
“If more funds said, ‘I only want to see female-led deals,’ then we would see more women invested in it,” Michel said. “Black, Indigenous and women of color make up most women on Earth. Request 25% [of investment volume] is not too much. I just see it as the beginning.
The pledge is available on the Black Founders Matter website for those who want to sign.
The impact of a pledge
The 25 x 25 Pledge has a precedent: the 15% Commitmentlaunched in 2020 by fashion designer Aurora James.
The 15% pledge encourages retailers to dedicate at least 15% of their retail space to Black-owned businesses. So far, it has received pledges from 28 retailers, including Sephora and Nordstrom. The engagement, now a nonprofit, also created a database of 1,200 black companies to help companies find and build relationships with black founders. To date, the 15% engagement indicates it has helped Black-owned businesses generate $10 billion of revenue and aims to generate $1.4 trillion in wealth for black entrepreneurs by 2030.