Ten Leading VCs Team Up On A $50 Million Fund To Back Underrepresented Investors
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Ten Leading VCs Team Up On A $50 Million Fund To Back Underrepresented Investors
Ten Leading VCs Team Up On A $50 Million Fund To Back Underrepresented Investors
Would-be venture capitalists looking to raise a fund for the first time often face a chicken-and-egg problem: to raise money, they’re expected to demonstrate a track record of promising startup investments; to build such a portfolio, they need to raise money.
It’s a challenge felt even more by emerging fund managers from underrepresented backgrounds, say Homebrew partners Satya Patel and Hunter Walk. “What we heard over the last few years as we got approached by new managers hoping to raise funds was that were plenty of opportunities for them to get counsel or mentorship, but what they really needed was capital,” Patel says.
Now, Patel, Walk and eight other general partners at established VC firms are trying an experiment: raise their own fund together, across firms, to bring the resources of some of the industry’s elite limited partners into emerging funds faster. Called Screendoor, the fund is a $50 million-plus investment vehicle that will look to back up to 15 underrepresented investors raising their first institutional fund, all while providing formal and informal training and support without drawing carry or fees.
The ten partners behind Screendoor include Aileen Lee of Cowboy Ventures; Eva Ho of Fika Ventures; Kirsten Green of Forerunner Ventures; Chris Howard and Leah Solivan of Fuel Capital; Patel and Walk at Homebrew; Kanyi Maqubela of Kindred Ventures; Charles Hudson of Precursor Ventures; and Shauntel Garvey of Reach Capital. The institutions investing in Screendoor include the investment arms of Davidson, Duke, Harvard, Michigan, Princeton and Virginia; The James Irvine Foundation; and investment firms Hall Capital and Sapphire Partners. pg slot
By pooling the capital in a fund-of-funds like Screendoor, such institutions can invest and build relationships with new fund managers they wouldn’t otherwise be able to back, Walk says, as first-time funds often raise amounts too small for a university endowment or large foundation’s VC strategies. Every limited partner in Screendoor is an investor in at least one of the firms represented by Screendoor’s founders, meaning Screendoor’s partners can use their own reputations as a bridge. “This can be a training ground for emerging managers to scale ahead of direct relationships with some of these larger institutions,” Walk says. pg slot
And while Screendoor’s own general partners are VCs themselves and thus potential co-investors and peers, the investors they back will not be asked to share deal flow or more information than they would with a typical LP. Screendoor will make investments through a rotating investment committee of three, starting with Patel, Hudson and a representative of its limited partner The James Irvine Foundation. “Screendoor promises access to talented emerging managers and allows us to begin a relationship with these investors ahead of their first institutional raises. |
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