The Interrupters

Precursor Ventures
Nov 7, 2019 · 4 min read

Those who say it can’t be done are usually interrupted by others doing it.

— James Baldwin

Fundraising for a VC-backed startup is a complex mind game for most founders. And, at times it can feel insurmountable for founders of color. After making quite a few investments at Precursor, we started to see a theme pop up for our black and brown founders. Many of them were leaving pitch meetings unsure about how to parse VC feedback. Questions like: “Were the investors overly critical because of my race?” or “Do I have to jump through extra hoops because I would be their first & only investment in a person of color?” loomed large.

To support founders of color within the Precursor portfolio and outside of it, we set out on a mission to develop a comprehensive database that showcased the investors for whom investing in black and brown founders was normalized.

We have collected a ~70 member list of firms and angels that have more than $5M AUM and who have invested in at least two US-based & URM-led company’s Seed or Series A Round from 2018-present day.

The intention behind creating this list is to recognize and celebrate those who have invested in founders of color, with hopes that they can serve as an example to others who still say it can’t be done.

This list is also meant to be a discovery platform for founders of color and allies who care about working with investors who invest in founders of color.

Our main focus is on Seed (which we identify as $1M+) and Series A rounds. We know these rounds are notoriously hard to raise, particularly if you are a founder of color. Because these rounds are raised before companies have significant traction, usually VCs focus their evaluation on the founder + market. As a result, we find that these rounds are particularly vulnerable to bias. We chose to limit the scope to US-based given that this is where we work most and we wanted to put together a list that would be useful to the founders we interact with. We also focused on investments made from 2018 to date because we wanted to spotlight the firms that were most actively investing in these founders.*

This project was inspired by the All Raise ‘Ask the Question’ campaign and we are truly grateful for the 100s of investors who responded to us with their data. I hope this list gives all firms the courage to become more open. Transparency makes our industry better. It helps us understand where we are so we know how to move forward. It also gives us the opportunity to hold ourselves and each other accountable for our actions, which is the only way we’ll improve.

This industry has been opaque for a long time and change is scary. Pulling together this list has been hard because it has forced us to ask tough questions of our friends and peers. There’s always the fear that if we ask those questions, we will get pushed away — making it even more difficult to continue this work.

The plan is to generate an updated list yearly. The hope is that with each year’s report, we are able to multiply the number of firms on this list. Eventually, we’d like the list to become irrelevant because every one of the 1000+ VC firms that exist is included.

Signed,

The Precursor Ventures Team

We know our focus meant that we weren’t able to capture all of the investors investing in black and brown founders. There are so many others out there doing great work! Even within the scope, we are sure we didn’t capture everyone and we’re so sorry if we missed you! While this year’s list is closed, please nominate your firm here to be included in next year’s list: https://airtable.com/shrhDTyob1GOwHHho


Research Process Overview:

  1. Conducted outreach to VC firms to request a list of investments that were made into URM-led company’s Seed or Series A rounds between 2018 to date
  2. Cross-checked the received list with information from public databases like Crunchbase to confirm information
  3. Confirmed misaligned information with investors
  4. Gathered co-investor information from each of these companies via Crunchbase and added these investors to the list as well

Definitions:

  • Black: Identifies as African-American or Black
  • Brown: Identifies as LatinX
  • URM-led: Black or brown person is on the founding team in a C-level role
  • Seed Round: ≥ $1M

Resources:

  1. If you do not currently have a way to track the gender, race or ethnicity of your portfolio company founders, try using an onboarding survey that allows them to self-identify. Here is Precursor’s template: Welcome to Precursor — Tell Us About You.pdf
  2. If you are looking to get more involved in communities of black and brown founders, here are some awesome organizations:

*Giving an 18-month buffer is about an entire fund cycle which generally illuminates whether or not the firm has invested in a new black or brown led company in their most recent fund.

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