Venture Capital Funds and the Gap

Venture capital (VC) funds have a gender and ethnic gap because venture capitalists are not making investments on women and multicultural entrepreneurs. Women who own a business receive less than 4 percent of venture capital money. Entrepreneurs of ethnic or racial minorities are also less likely to receive an investment. By leaving out women and minorities, firms are missing out on millions and profitable business opportunities. Most venture capitalists are men and angel investors are too. Fortunately, there are options out there that entrepreneurs can seek that will help them get access to funding.

VCs for Women and Minorities

Women and minority focused venture capitals provide financing to those businesses who are in the early stage and have growth potential.

Pipeline Angels

Pipeline angels are passionate about women owned businesses and are determined to close the funding gap. They help women invest in other women of all ages and professions. Pipeline Angels is a national network and have invested more than $1.7 million in women ventures.  Their network has over 300 members who receive training via their angel investing boot camp before funding startups.

There are some criteria you need to present at one of their pitch summits to secure funding through Pipeline Angels.

  • At least one cofounder is a woman
  • The company must be for-profit
  • Have a mission that is social or environmental
  • Must be based in the US

Harlem Capital

Harlem Capital plans to invent in 1,000 diverse founders over the next two decades. They look for products that match the marketing and operational expertise they offer as well as tech-enabled products.

The following are the criteria you need to receive Harlem Capital funding:

  • Revenue of $100,000 or higher
  • One full time founder and a solid management team
  • A product or service that solves a business problem
  • Market size potential
  • 4 to 7-year timeframe for investment realization

Aspect Ventures

Aspect Ventures help people get access to capital by using people who have a high level of influence. Some companies they have funded include BaubleBar and TheRealReal.

Aspect Ventures do not list their criteria publicly, but you can get that information by getting in touch with them on their website.

SoGal Ventures

SoGal Ventures are the first female-led millennial venture capital firm. They are set out to meet the capital needs of minorities, especially millennial women and Gen Z women.

The following are some of the criteria needed for funding:

  • Based in US or Asia
  • Millennial or Gen Z woman
  • Company is building the future of how we live and maintain health

There are more requirements that can be found by contacting SoGal Ventures.

Founders First Capital

Founders First Capital leverages its capital to close the wage gaps. They have flexible financing and fund service-based companies that are led by minorities, military veterans, or woman founders. Their application process is easy and fast and allow companies to get up to one million dollars in funding in just a few weeks.

The following are some of criteria needed for Founders First Capital:

  • Service-based companies (such as subscription models)
  • US based
  • Have growth potential
  • Have existing B2B contracts with recurring monthly revenue
  • Are open to receiving additional funding down the line

Ada Ventures

Ada Ventures seeks companies that are going to change the world, have bold ideas, and see the world from a new perspective. Their focus is to discover and build the ideas and invest to support the founders. 

The criteria for Ada Ventures are as follows:

  • The type of market the company operates in
  • The proposed business model
  • The value it brings to customer

Benefits of Venture Capital

Venture capital can be beneficial to many companies which include some of the following:

  • Networking – the firm will network your firm with other firms that they have an investment with
  • Validity and credibility – an investment by a venture capital tells the market that an investor thinks your business has value
  • Your business will grow faster and be successful

Although there continues to be a gender gap for funding, there are various ways women and minority focused companies can still get funding. Be sure to read the criteria and requirements ahead of time and see which one is right for you.