Plexo Capital: Diversity in people. Diversity in funds. Diversity in expertise.
I am pleased to announce Plexo Capital’s recent closing on a $42.5 million fund. Alphabet, the holding company of Google, is the lead investor, and other investors include Intel Capital, Cisco Investments, the Royal Bank of Canada, Kapor Capital, the Hampton University Endowment, and The Ford Foundation.
A key feature of Plexo Capital’s mandate is to invest in venture funds led by women and people of color, which is a strategy to generate alpha while also positively impacting the level of diversity and inclusiveness in the technology ecosystem. The underrepresentation of these groups and their lack of access to capital and investors is well-documented: fewer than 1% of venture capital-backed founders are black; Latinx founders made up 1.8 percent of those receiving funding, and only 11% of venture capitalists are female. (Source: Crunchbase; All Raise)
For Plexo Capital, diversity is an unrealized source of differentiation that creates a powerful network effect. Our thesis in this regard is that women and people of color inherently have differentiated networks and a different lens to evaluate deals. This is very important at the seed stage, as it leads to differentiated deal flow.
We developed Plexo Capital’s strategy, to provide a larger consideration set of deals, during the time I was an Investing Partner at GV — formerly known as Google Ventures the early-stage venture capital firm of Alphabet/Google. Plexo Capital was incubated within GV and is a full-stack investment firm that operates across the entire spectrum of the global startup ecosystem.
As a full-stack investment firm, Plexo Capital invests in both emerging venture funds and early-stage companies; and invests alongside deals with those venture funds that have invested in Plexo Capital. By identifying the best investors for our portfolio companies, and the best companies for our investor partners, Plexo Capital serves as a conduit between entrepreneurs and VCs.
For this reason, GV has continued to source deals through the Plexo Capital VC network, including Blavity Inc., a Los Angeles-based media company created by and for black millennials where GV led the series A investment and Plexo Capital invested alongside GV.
By pitching Plexo Capital first, early-stage companies seeking funding gain an efficient process to access the right investor at the early stage. Instead of approaching each fund manager to gauge fit, Plexo Capital provides a single touchpoint where companies not only gain access to multiple seed-stage venture funds globally but also to our LPs, many of whom are VCs themselves and are able to invest at the later stages.
A core belief of Plexo Capital is that diverse perspectives are a competitive advantage in identifying and capitalizing on key market opportunities. We are able to pursue deals that require an intimate understanding of a problem or market opportunity in the absence of data. Women and people of color bring this to the table.
Plexo Capital is not, however, a “diversity investor,” but instead focuses on those venture funds and early-stage companies we believe will generate a high return. Because the universe of opportunities we select from is more diverse, Plexo Capital’s investment portfolio is consequently more diverse.
Plexo Capital’s investment performance demonstrates that. With the right strategy, everyone in the venture landscape wins. We believe diversity is good business. Whether one is an African American woman running a VC fund in Silicon Valley, or a white male with a seed-stage business in Austin, we look forward to meeting you and helping bring your vision for the future to life.