Juneteenth 2021: Progress Update & Reaffirming our Commitment

Art by Lo Harris

Female Founders Fund is a part of the growing number of venture capital firms, startups, and corporations recognizing Juneteenth as a company holiday. Juneteenth commemorates the end of slavery in the United States on June 19th, 1865, reminding us how far we’ve come and how far we have to go. This year’s celebration comes after a year of nationwide protests against police violence sparked by the murder of George Floyd. Black Lives Matter is not only about the police as an isolated institution, it’s about systemic racism. Black lives and livelihoods are threatened daily by discrimination and structural inequity across every facet of society.

As we observe Juneteenth, we are focusing on what we can do on our part and reflecting on progress. Change requires conscious action from individuals in the choices they make on behalf of themselves and the organizations they represent.

At Female Founders Fund, we have a sincere commitment to progress and today we reaffirm our commitment.

It’s no secret there’s a diversity problem in venture capital and tech, especially within leadership roles and the capital going to women of color. For context, US startups overall raised a record $143B in 2020, $3.2B went to startups founded solely by female founders, with the remainder $140B going towards companies led by men.

Female Founders Fund was founded in 2014 to address this inequity in the ecosystem with the goal of proving it is possible to generate top-tier returns by investing in under-represented founders. Women — especially women of color — are still vastly underrepresented and funding has largely been inaccessible to Black and brown women. Although total investment to Black and Latinx women-founded companies was slightly higher in 2020 than 2019 ($715M vs. $687M), Black and Latinx women founders received less than half a percent (0.43%) of VC investment in 2020, down from a share of 0.67% in 2018–2019.

To put this into perspective: According to Project Diane, as of December 2020, only 93 Black women and 90 Latinx women had secured $1 million or more in funding for their business. Over 2,300 female founders have raised $1M+ of venture capital funding, according to Crunchbase and Pitchbook.

We believe that investing in women building the future generates superior returns. We are dedicated to the mission of democratizing opportunity and access to capital for all women — especially Black and Latinx women who continue to experience this inequity the most. This is both a socially beneficial conviction and smart business.

It’s not just about changing one part, adding one Black or brown investor and or one diverse founder, and it’s certainly not about empty promises. We believe in order for real change to take place, it requires auditing the whole structure of the system — acknowledging and reversing bias and oppression. We also know it takes time and perseverance.

Together, we have to change the whole system — starting with our role in it and bring others along in the journey.

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. Last year we shared our portfolio diversity and you can see the most up to date statistics below (here is last year’s data).

We continue to believe that you cannot change what you do not track, and we encourage other VCs to do the same.

We have a sincere commitment 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 as we said before, it’s hard to address these kinds of inequities if you’re not prepared to discuss them openly, and with the facts. We believe an accurate picture is represented by both dollars invested (equity invested) and number of companies invested.

So here our our latest numbers across all our funds:

Last year, by dollars/equity invested, 59% of our total capital deployed had gone to White founders, and 41% had gone to founders of color with 8% to Black founders and 5% to Latinx founders. By company, 69% of our companies were led by White founders, and 31% had gone to founders of color with 6% to Black founders and 2% to Latinx founders.

We are proud of our progress in the last twelve months — below you can see a side by side comparison of our progress. By dollars/equity invested, 33% of our total capital deployed in the last twelve months has gone to white founders, and 67% has gone to founders of color with 20% to Black founders and 32% to Latinx founders. By company, 29% of the companies we invested in over the last twelve months are led by white founders, and 71% has gone to founders of color with 29% to Black founders and 29% to Latinx founders.

Additionally, last year we outlined four actions we would take to drive more equitable outcomes especially for Black female founders. While this is still just a start, we are excited to share our progress.

1. Scout Investments: We acknowledge that Family & Friends rounds are not accessible to everyone, so our Scout investments are for Black and or Latinx founders who are raising capital very early. Last Juneteenth, we committed to making 2–4 Scout Investments for promising pre-seed Black and Latinx founders. Over the last 12 months, we backed three exceptional Black/Latinx founders: Saron Yitbarek, of a stealth startup, Babba Rivera of Ceremonia, and Beatriz Acevedo of Suma Wealth. Historically, these opportunities would have been too early for our investment mandate, but we are inspired by the products these founders are building and are excited to continue to support their growth from the earliest stage. Our goal is to provide similar portfolio level support throughout their journey and potentially lead a larger investment in a seed round. We continue to remain committed to backing exceptional Black and or Latinx female founders with these catalyst checks, if you have an idea email us at pitches@femalefoundersfund.com.
2. Entrepreneur in Residence: We feel lucky to have brought on Kimberly Wilson, Founder and CEO of HUED, as our first ever EIR. HUED is a healthcare engagement solution tailored to address the healthcare needs of Black and Latino communities. HUED connects diverse patients with culturally competent healthcare providers to increase the quality of care. Over the last 8 months, it’s been our pleasure to work alongside Kimberly and support Hued’s mission.
3. Community: In 2020, we held 4 virtual Office Hours for Black and Latinx female founders in partnership with 645 Ventures, Harlem Capital, Backstage Capital, and Serena Ventures; where we met with over 75 early stage founders. In 2021, we are proud to have supported multiple organizations that advance racial equity in our industry like HBCUvc and Black Girl Ventures.
4. Representation across all platforms: Beyond investing and supporting founders, as a fund we have been intentional in setting representation goals across all of our work — The Two Percent podcast guests, our speaker series, our content etc; and ensuring accountability across all of these efforts. We strive to feature at least 50% women of color in FFF events and via the content we put into the world.
5. Tracking: We are committed to continued transparency and commit to releasing our portfolio statistics annually by race, ethnicity, and gender. We will measure, track, and report our progress yearly by June 19th, and will continue to encourage other funds to track portfolio diversity and create a plan to drive progress.

As we reflect on our mission and role in driving a more equitable future, we will continue to listen and learn. On Juneteenth, and every day, we can — and must — do better. It’s time for all of us to audit and reflect on these systems — our individual belief systems, our political systems, and our organizational systems — to face, with honesty, the disadvantages, bias, and oppression that is pervasive. Black lives matter, Black founders matter, Black investors matter, and we are more energized than ever to continue fighting for diversity in tech and VC.