New Black VC Firms Aim to Increase Funding for Black-Led Startups

Venture capital funding to Black startup founders hit a record number in 2021, increasing a whopping 281 percent from 2020, according to Crunchbase. But this wasn’t the case for investments in firms led by Black venture capitalists. Black investors raised less than 1 percent of all U.S. capital raised in 2021, found a new report.

Tessa Flippin, founder of Capitalize VC (Photo from LinkedIn)

In 2021, funding to Black VCs dropped to $1 billion from the $3.5 billion they raised in 2020, according to Crunchbase.

But this could change, as more Black partners are launching firms, many within the past two years.

A new report by the nonprofit Blck VC, in partnership with Silicon Valley Bank, found that more than 50 percent of Black partners who were part of the study launched new firms, and half of those were founded within the past two years.

One of those that recently launched was Cincinnati-based Lightship Capital, founded by Brian Brackeen and Candice Matthews Brackeen.

Before launching Lightship Capital, Matthews Brackeen founded the startup accelerator Hillman, now known as the Lightship Foundation, which targets underrepresented founders. Her husband and Lightship Capital co-founder, Brian Brackeen, founded and was the CEO of Kairos, a facial-recognition startup.

Lightship launched its $50 million debut fund in 2020 to fund Midwest-based minority-led startups. Its first investment was in the food-technology company FreshFry.

Pilar Johnson co-founded Debut Capital in 2020 with Bobak Emamian. Currently, the firm is raising its first $5 million funds, with $3.8 million already committed, Business Insider reported.

James Norman and Sean Green wanted to create a VC fund with a purpose. And after George Floyd’s murder in 2020, they launched Black Ops Ventures to effect change by investing in Black entrepreneurs.

Sylvester Mobley and partners launched Plain Sight in early 2021 with a focus of bringing more equity to the venture-capital industry. To achieve this, he told Business Insider, Plain Sight has underrepresented people in positions where they control the flow of capital.

Mobley, who launched the youth tech-education nonprofit Coded by Kids before starting Plain Sight, is also an entrepreneur-in-residence at the early-stage VC firm Osage Venture Partners.

Tessa Flippin launched Capitalize VC in 2021 with the goal of reducing the racial wealth gap by investing in early-stage Black founders. Before going out on her own, Flippin worked at TechNexus, where she invested in seed-stage software-as-a-service companies. She was later a VC-in-residence for Genius Guild’s Greenhouse Fund investing in Black founders. 

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