All Raise has created a searchable list of investors from diverse backgrounds.
The venture capital world skews heavily white and male. For founders who don’t fall into those categories, that’s traditionally been a big problem when it comes to getting funding.
By Kimberly Weisul, Editor-at-large, Inc.com
Now one organization is taking steps to help. All Raise, a group of venture capitalists working for increased diversity in their industry, is launching a database enabling entrepreneurs to more easily find investors from diverse backgrounds. Called the Founders for Change Diverse Investors List, it allows founders to search for VCs by investment stage, sector, and background. All the investors on the list identify as women, underrepresented people of color, or LGBTQ. The list is the result of a partnership between All Raise and Crunchbase, along with NFX (via its tool Signal) and VCWiz, both of which help founders find investors appropriate to their companies.
Currently, only 9 percent of investing partners at U.S. venture capital firms with more than $25 million under management are women, and only 1 percent are underrepresented people of color, according to All Raise. Even after #MeToo and a rush by venture capitalists to hire women investors, 74 percent of U.S. venture capital firms have no women investors, and 95 percent do not have any investors who are underrepresented people of color.
In March, All Raise launched Founders for Change, an initiative that grew to include nearly 1,000 founders from companies of all sizes who declared they would consider VC firms’ diversity when choosing one as an investment partner. A survey of women entrepreneurs, conducted jointly by Inc. and Fast Company, found that 38 percent of female founders seek out female investors.
Finding investors who can satisfy the desire for diversity, however, has been a cumbersome process. Founders can rely on their networks, but they also have to spend a lot of time scrolling through the ‘About Us’ pages of venture capital websites. All Raise’s list remedies that issue with more than 400 angel and venture investors searchable across three categories: women, underrepresented people of color, and LGBTQ.
All Raise says members of its Founders for Change initiative are seeking diverse investors partly because it’s easier to build a diverse company from the very beginning than it is to change a company after it has become homogeneous and more established. There are other dynamics at work as well: In the survey conducted by Inc. and Fast Company, 62 percent of women who were seeking funding said they experienced bias during the fundraising process. Pitching female investors could prevent that problem.