Business Diversity

Five Years Ago, I Set Out To Prove A VC Firm Could Invest With A Diversity Thesis. Here’s Where We Are Today.

Illustration of Black Founders looking at startup rocket

By Henri Pierre-Jacques

In 2017, I started compiling a list of Black and Latino founders who had raised $1 million of VC funding as there wasn’t any aggregated list online. I simply wanted to know who the top diverse founders were as they were the founders I, as a venture investor, wanted to serve.

So I started pooling data from all over the internet.

Then my firm, Harlem Capital Partners, started raising for Fund I in 2018 and LPs kept asking, “But are there enough Black and Latino founders to have a diversity thesis?”

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Now this was more than just curiosity as I had to prove we could find diverse founders across the country to invest in.

So I doubled down and made my research into a formal report produced by HCP and we’ve been doing it ever since. We just released Harlem Capital’s 2021 Diverse Founder Report in partnership with Crunchbase.

This is our first report collaborating with Crunchbase, which enabled us to expand the list from 277 companies to 870 companies that have raised $1 million or more as well as show yearly fundraising trends. It is our mission at Harlem Capital to serve these founders at the earliest stages and I’m excited that we represent 28 companies on this list.

  • Check out Harlem Capital’s airtable to see the full list of 870 companies included in the analysis. Read the firm’s full report and blog post here.

We found there are now almost 1,000 Black and Latino founders that have raised $1 million or more in venture funding.

Henri Pierre-Jacques of Harlem Capital

Among the other highlights in our report:

  • The 870 companies on the list have raised $28.8 billion of capital (this includes all companies ranging from 1995-2021) with a median raise of $5.5 million
  • Total capital raised increased from $2.7 billion in 2020 to $8.2 billion in 2021, with Latinos representing 60 percent of the capital raised.
  • 33 percent of the companies on the list are women and 67 percent are men, though women only receive 20 percent of funding
  • Men have raised 1.8x more than women and Black men have raised 2.3x more than Black women when it comes to median capital raised
  • Latino men have the highest median raised: $7.5 million

This year’s top industries are software, fintech, and healthcare, representing 34 percent of all companies founded.

This year’s report included more data than ever before thanks to our partnership with Crunchbase. We are big believers that “data drives decisions.” This new data will hopefully help more funds find incredible founders as well as more founders know they aren’t alone.

We didn’t have the data to prove our diversity thesis five years ago, but now the data is more clear than ever. Black and Latino founders are in the early innings of what we believe is an asset class: diversity investing.

These groups are still underfunded, especially Black women, yet they have still created $100 billion or more in value. I predict this list will represent $1 trillion in value by 2030.

Henri Pierre-Jacques is managing partner of Harlem Capital, a venture capital firm changing the face of entrepreneurship. Harlem Capital invests $1 million to $2 million into early-stage diverse-led startups based in the U.S., Africa and Latin America. Startups can apply for funding here.

Illustration: Dom Guzman

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