(Photo) Yinka Faleti speaks during the Democratic Drive In Rally hosted by the Democratic Club of Queeny and Lafayette at Queeny Park in Ballwin on Saturday, Oct. 24, 2020. Faleti is running for Missouri Secretary of State against incumbent Jay Ashcroft during the general election on Nov. 3
Of the thousands of companies venture capitalists invested in last year, just one-fourth were led by women. Only 2% had Black founders.
Dan Conner and Yinka Faleti see that dearth as an opportunity. Conner, general partner at Ascend Venture Capital in St. Louis, recently hired Faleti to manage a new fund that will invest in firms led by founders from underrepresented groups. Those include women, ethnic minorities, immigrants and LGBTQ persons.
Faleti brings a diverse background to the job. A native of Nigeria and a West Point graduate, he’s been a prosecuting attorney, United Way executive and executive director of the group Forward Through Ferguson. In 2020, he ran unsuccessfully for Missouri secretary of state.
A series of conversations with Conner convinced him that the private investment world could address the same issues of fairness and opportunity that had been important throughout his career. “I began to see the power of venture capital as a lever to help ameliorate economic inequity,” Faleti said.
Ascend wants to raise $25 million for its Opportunity Fund, and Conner hopes to begin making investments next month.
He said he decided to launch the new fund after realizing that of the five most promising companies in Ascend’s current portfolio, four are led by diverse teams. The 7-year-old firm has made a total of 18 investments, with $18 million under management.
The venture capital industry remains overwhelmingly white and male, but Ascend isn’t the only firm making an effort to diversify. After George Floyd’s murder sparked a wave of anti-racism protests in 2020, several firms launched funds aimed at underrepresented founders. Among them are Backstage Capital in Los Angeles and Lightship Capital in Cincinnati.
Large Silicon Valley investors also are moving to diversify both their staffs and their portfolios, but change happens slowly. Just 16% of partners at venture capital firms are women, 3% are Black and 4% are Hispanic, according to an industry survey.
And in a business built on networking, venture capitalists tend to invest in founders who look and think like them. “It’s crazy how little opportunity has been unlocked when it comes to women and minority entrepreneurs,” said Maryam Haque, executive director of Venture Forward. Her organization is a 2-year-old nonprofit dedicated to making the industry more inclusive.
