Self-described as the Nation’s first student-led venture capital fund. The Roberto C. Goizueta Center for Entrepreneurship and Innovation at Emory University’s Goizueta Business School has developed and officially announced the new fund. The goal of the fund is to provide money only to Black, Latino, and Native American entrepreneurs across the country. The funding vehicle comes as a growing number of organizations have begun new attempts to fight structural racial inequities in the nation’s corporate environment since early last year. It is necessary to take action. According to a press release, the fund was founded after students saw a gap in venture capital funding, with underrepresented minority founders obtaining less than 3% of venture capital investment in the United States.
Their research found that in Black, Latino, and Native American populations, persistent low wealth means fewer opportunities for personal or friends-and-family investment for companies. Furthermore, Black businesses face a roughly 20% greater incidence of loan rejection than white entrepreneurs.
Only 1% of VC-backed founders are African-American, and less than 2% are Latino. Furthermore, Black entrepreneurs frequently fail to secure venture capital funding.
The Goizueta Business School facilitated the creation of the new $1 million fund, which will allow students to research hundreds of minority entrepreneurs and decide if the investment can be offered. The first investments from the fund ranging from $5,000 to $50,000 are expected to occur in 2022.
Plans call for students to source between 100 and 200 companies each year and conduct due diligence. The fund will make investment recommendations to the Peachtree Investment Committee, consisting of Goizueta faculty, staff, and alumni According to reports, the fund will invest in companies that have at least one Black, Latino, or Native American founder. In addition, a founder must own a majority of the company’s stock.