In nearly 80% of cases, startups that receive funding from venture capital firms are run by white owners — and a 2021 study of the venture capital industry found that only 3% of investment partners have Black founders.
Dan Conner, the founder of Ascend Venture Capital, told St. Louis on the Air that the numbers are “completely lamentable” but also reflective of the opportunities that investors are missing.
That’s why Ascend announced the creation of a $25 million opportunity fund targeted at companies whose owners come from underrepresented groups in the industry.
“No geography or demographic has a monopoly on brilliance. It crops up anywhere, in any circles,” Conner said on Wednesday. “The fact that transformational businesses are getting started in these areas, and are getting underfunded, is terrible.”
Conner pointed out several possible reasons for the overwhelming proportion of white-owned startups in the venture capital space. Venture fund investors, he observes, can be so reliant on looking for patterns of success that they miss the bigger picture.
“We tend to seize on past successes,” he said, “And then try and look for the same situations in the future. That just leads to making the same investments over and over.”
For Conner, what’s needed are new people with great ideas, and those founders and their companies don’t necessarily look like the juggernauts that have dominated Silicon Valley —- at least, not yet. Ascend itself also has a new partner: Yinka Faleti, whose previous roles include St. Louis assistant prosecutor, political candidate and leader of the Forward Through Ferguson.
“Venture capital is such a huge part of creating the future of wealth, and either equity or inequity in our society,” Faleti said. “This resonates with me personally, because I understand that there are so many stones that are not met or not turned over, and where there are brilliant folks with incredible ideas that will transform our society for the better.”
Lisa Morales-Hellebo, the CEO of Refashiond OS, a data and logistics startup in which Ascend is an investor, said that she had been repeatedly overlooked by other venture capital firms before landing the deal.
“This venture community, that I've seen over my 27 years in tech, tends to be followers, not leaders, not disruptors,” she said. “What they're missing out on is massive.”
“St. Louis on the Air” brings you the stories of St. Louis and the people who live, work and create in our region. The show is hosted by Sarah Fenske and produced by Emily Woodbury, Kayla Drake, Danny Wicentowski and Alex Heuer. Avery Rogers is our production assistant. The audio engineer is Aaron Doerr.
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