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You are most likely aware of the contentious lawsuit against the Black, women-owned Fearless Fund, a venture capital firm based in Atlanta focused on funding women. Fueled by an anti-diversity legislative battle trailing off the Supreme Court ruling against Harvard’s equal protection admissions clause, the same organization is now targeting the space of venture capital and diverse investing initiatives. This attack sits on the heels of a year in which venture capital investment in diversity in the area has plummeted. In 2022, women claimed less than 2% of funding. In 2021, Black entrepreneurs encompassed less than 1% in 2022, with investments decreasing in Black-owned businesses by as much as 45%.
ALSO READ: Why These Investors Vow To Fund Black Women Despite Fearless Fund Ruling
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Despite a contentious political climate, trillion-dollar asset manager Wellington Management closed on a $150 million investment in their early-stage startup fund last week. This fund focuses on groups historically overlooked by investment firms, primarily finding and supporting Latine and Black women entrepreneurs.
Created by seasoned experts in the startup space, Wellington Management has invested in over 237 startups, including Peloton, Pinterest, and Slack, batting a 47% exit achievement. The close of this fund marks Wellington Management’s resilience in the face of political showboating and policy change, showcasing that the spirit of entrepreneurship and domestic economic growth will not be shortchanged by short-sighted cultural showboating and policy threats.
ALSO READ: The Important Reason Why Venture Firms Are Beginning To Fund Latino Investors
The need for investment firms like Wellington Management is extensive. Wellington Management portfolio company and Meroxa founder DeVaris Brown stated that these kinds of investments are highly sought after — and needed — by diverse founders who are building pathways towards developing solutions for their communities alongside tracks for career advancement.
“We need more culturally applicable capital. Once the message gets out there, many founders say, ‘Look, this is a time for me to chart my destiny.’ Having people who can understand you across the diaspora is super helpful.”
ALSO READ: Diverse Founders Celebrate As California Passes First-Ever Bill Mandating Investor Transparency
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“Venture Capital is an industry predicated on networks and access,” says Jackson Cummings, Head of Wellington Venture Investments. “For decades, these networks have not been accessible to entrepreneurs from all backgrounds. From our vantage point, we see this as a market inefficiency and a differentiated opportunity to create value by partnering with ambitious and dynamic founders who, in many cases, have been historically overlooked…we see a more equitable future and one in which closing the access and resource gaps can drive long-term growth and meaningful change in the ecosystem.”
Wellington Management will take a growth approach of combining capital alongside expertise, networks, and the broader investment platform. To read the complete statement from Wellington Management, click here.