Female Founders Fund: Committing to Change
Today is Juneteenth, Freedom Day, a historic day in our nation. On Juneteenth and every day, #BlackLivesMatter. It was June 19th, 1865 that slaves in Texas found out about the Emancipation Proclamation — and their freedom — a whole two years after the proclamation had been signed. This is one of the most significant days in American history. At Female Founders Fund we celebrate the freedom of all Americans and recognize today as an official holiday. We are determined to be a part of the solution; it’s one step in our ongoing journey toward racial and gender equality in the VC and tech ecosystem, and in this country.
Female Founders Fund was created in 2014 to address the inequity in the venture capital ecosystem and the fact that less than 3% of venture funding goes to female founders. Women — especially women of color — are still vastly underrepresented and funding has largely been inaccessible to black and brown women. Of all VC funding over the last decade, black women have raised only 0.06% and Latinx women-led startups have raised only 0.32%.
We believe investing in women building the future will generate superior returns, and we are one of the few funds dedicated to leveling the playing field by investing in the future. We are dedicated to this mission, democratizing opportunity and access to capital for all women — especially Black and Latinx women who continue to experience this inequity the most.
But calling out these systemic inequalities is not enough. We need a plan to break them down. While there has been reluctance among VCs to publish portfolio level diversity statistics, we believe that you cannot change what you do not track.
Transparency is a necessity as we work to understand and dismantle systematic inequity. Put simply, FFF can and will do better. Moving forward, we will take an even stronger approach to investing in the intersectionality of our portfolio with underrepresented people of color at the forefront and also including sexual orientation as this community has also been largely underrepresented. But it’s hard to address these kinds of inequities if you’re not prepared to discuss them openly, and with the facts.
Today, we are taking this step in transparency. In order to do this, we researched the methodology of how big tech companies share their diversity data, and most importantly how to present it most accurately. With these findings, we believe an accurate picture is represented by both dollars invested (equity invested) and number of companies invested.
So, here are our numbers:
By dollars/equity invested, 59% of our total capital deployed has gone to white founders, and 41% has gone to founders of color — more specifically 28% to Asian, 8% Black, 5% Latinx. By company, 69% of our companies are led by white founders, 31% are founders of color — more specifically 23% Asian, 6% Black, and 2% Latinx female founders.
After careful thought on how we can act to drive more equitable outcomes especially for Black female founders, we have decided to begin with the below actions. While it’s a start, we acknowledge it’s imperfections and welcome feedback from the venture community and beyond.
- Scout Investments: Over the next 12 months, 100% of our Scout Investments will go towards companies led by Black and or LatinX women. We acknowledge that Family & Friends rounds are not accessible to everyone, and we want to write checks and make early bets to WOC building the next big thing.
- EIR: We are looking to partner with an Entrepreneur in Residence. We particularly encourage women who are under-represented and systematically excluded in the investment and startup space to apply. Please click here to apply.
- Community: We will continue to double down and partner with organizations that advance racial equity in our industry. To this effect, we will continue our quarterly WOC office hours, most recently hosted with Harlem Capital, with an upcoming date of July 7th and 8th in partnership with 645 Ventures. If you are a founder interested in upcoming office hours, please click here to apply. If you are an investor or fund interested in partnering with us on this effort, please send an email to emily@femalefoundersfund.com.
- Tracking: Most importantly, we are committed to continued transparency and commit to releasing our portfolio statistics by race, ethnicity, and gender. We will measure, track, and report our progress annually, and encourage and will continue to advocate that other funds track portfolio diversity and create a plan to drive progress.
These are the first of many more critical steps that need to be taken by our VC ecosystem to support the black community, create more equitable outcomes, and to dismantle structural racism in our country. We hope you’ll join us.
Today on Juneteenth, and every day, we can — and must — do better. Black lives matter, Black Founders matter, Black Investors matter.