- Harlem Capital upgraded from an angel syndicate to full-fledged venture capital
- Harlem Capital closed its debut effort on an oversubscribed $40.3 million.
- Venture Capitals without diversity are missing out on opportunities
Harlem Capital upgraded from an angel syndicate to full-fledged venture capital, closing its debut effort on an oversubscribed $40.3 million.
Managing partners Henri Pierre-Jacques and Jarrid Tingle in New York City launched Harlem Capital in 2015.
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The two have since graduated from Havard Business School and hired two venture partners, John Henry and Brandon Bryant. They also hired two senior associates to help expand their portfolio.
The over-arching goal was to invest in 1,000 diverse founders over the next 20 years.
“We fundamentally believe we are a venture fund with impact, not an impact fund,” Pierre-Jacques tells TechCrunch. “The way we generate impact is to give women and minority entrepreneurs ownership.“
Capital from Fund 1- an industry-agnostic vehicle that invests in post-revenue business across the US will be used to either lead, co-lead, or participate in the $250,000 to $1 million-sized seed or a Series A financings.
Harlem Capital plans to add another 22 businesses to Fund 1.
With its first fund close, the firm becomes one of the largest venture capitals with a diversity mandate.
Venture Capitals lacking diversity miss out on opportunities
Despite an increasing amount of data exposing the gender and race gap in venture capital, minority founders continue to rake in just a small percentage of funding each year.
According to a RateMyInvestor and Diversity VC report released earlier this year, most VC invest in companies run by white men with a university degree.
Other recent data indicates startups founded exclusively by women raised just 2.2% of overall VC funding in 2018 and increased slightly in 2019.
Meanwhile, the median amount of funding black female founders raised as of 2018 was $0.
The stark contrast in funding for females versus males or white women versus black women entrepreneurs is partly as a result of lack of diversity amongst general partners at VC funds, and amongst the limited partners, who choose which firms to provide capital.
Also, another study revealed that 81% of VC firms didn’t have any single black investor as of 2018.
“There’s no rational reason why this problem exists. It persists because VC funds, in general, have been closely held and clustered around Silicon Valley. They come from particular schools with particular networks with a small headcount that doesn’t turn over frequently. Some firms have strategically added a few partners here and there, but not enough to change the organization. You need diversity funds like ourselves to get this market anywhere close to parity.” Tingle says.
“A lot of investors are frankly missing out on opportunities,” Tingle adds.
Tingle and Pierre-Jacques met through the Management Leadership for Tomorrow Program – a nonprofit organization identifying a new generation of leadership.
The duo Tingle has since built a prolific internship program at the firm. With as many as six interns admitted each quarter, the goal is to train future investors of color.
Limited partners in Harlem Capital Partners Fund I include TPG Global, State of Michigan Retirement Systems, the Consumer Technology Association, and Dorm Room Fund.