Today, we’re announcing Impact America Fund (IAF) II: a $55 million venture capital fund.
This is likely the largest fund ever raised by a sole Black female general partner. It’s an important milestone, especially in a year marked by expansive calls for social and economic justice, but it's really only the beginning.
We’re building toward a future where every person of color in the US can participate in the economy fully and on their own terms. That’s obviously not true today: systemic racism has its finger on the scale, artificially narrowing the economic choices of millions of people across the country.
Systemic racism is the largest market inefficiency of our time and we’re betting big on its disruptors. We believe that the next generation of market leaders will be those companies who recognize this problem and disrupt it by deploying technology where an injustice intersects with a multibillion-dollar market opportunity. Our goal with this fund is to find them and accelerate their growth between Seed and Series B.
We’ve already begun investing out of IAF II — we didn’t wait to complete fundraising. Our portfolio companies are in sectors as diverse and interwoven as the communities we serve:
They’re spurring the sustainable growth of small businesses by increasing the bookings and income of hair stylists (Mayvenn), offering new options for community-driven financing (SMBX), and tackling the segregated procurement practices that stifle the growth of diverse suppliers (ConnXus, our first exit from this fund, continues this work at Coupa). They’re helping individuals access small loans for cash shortfalls (SoLo Funds), build credit from rent payments (Esusu), and earn a college degree (Upswing). And they’re reshaping the care economy by helping deliver affordable services that prioritize the vital role of caregivers in areas such as home health care (CareAcademy), supplemental benefits (CareCar), childcare (Winnie), and mental health (MindRight).
80% of the companies we’ve already invested in are led by a person of color. 70% of them are Black-led. And while explicitly focusing on the diversity of founders is important work, it’s not our strategy.
The diversity of our portfolio is a reflection of our focus on the inherent impact of these companies and the lived experience of their teams. We look for business models where the forces that drive business success also increase ownership, opportunity, or other forms of empowerment. And we search for founding teams who are familiar with those problems — and joys! — in the daily lives of low and moderate income communities of color.
Because we’re focused on impact at scale. In venture capital, “impact” is often associated with “small,” “mom and pop,” or “charity.” And the larger national collective imagination also undervalues companies that serve low and moderate income communities. We reject these expectations.
Companies can be both profitable and purpose-driven. They can grow quickly while caring about their customers, their workers, and our communities. Consumers want ethical, inclusive products; workers want to work at responsible, humane companies. We’re focused on the companies that are built this way from the start.
These companies locate their opportunities within the biggest systemic challenges. They analyze retention rates and CAC but lifetime value is more than a spreadsheet calculation for them. They don’t shy away from the hard stuff and as a result, they’re poised to fundamentally change their industries. We think this is the ultimate expression of the entrepreneurial spirit.
The rich diversity of the 67 Limited Partners who invested in IAF II agree with our approach. We are backed by several foundations, including the John D. and Catherine T. MacArthur Foundation, Ford Foundation, California Wellness Foundation, W.K. Kellogg Foundation, and Surdna Foundation. We are also joined on this mission by the clients of large wealth managers such as Cambridge Associates, Veris Wealth Partners, Caprock, Trillium Impact Partners, and Monticello Associates. And UBS made its commitment through their CRA portfolio, which is aligned to the firm’s broader efforts aimed at making access to capital more inclusive.
With such a diverse group of LPs, we’ve learned a lot together through this fundraise, accelerated by a turbulent 2020. We’ve had rigorous yet still joyful conversations about the roles we each play in this battle for economic equity and as a result, we’ve developed a degree of trust beyond conventional, institutional expectations. We’re grateful for every partner committed to our mission and we’re certain our portfolio companies, and the communities they serve, will benefit from this collaboration.
Ultimately, this is bigger than us or our LPs. We’re a small part of a diverse, dedicated movement, and we can’t celebrate this successful fundraise without acknowledging how they’ve stepped up to help by:
- Committing capital early and for the long haul (particularly LPs in IAF I & II)
- Introducing us to mission-aligned LPs looking for an innovative investment strategy
- Introducing us to founders and other emerging fund managers for mutual aid
- Supporting our founders or opening the door for us to co-invest together
- Providing steadfast, warm, and wise counsel when we did something well and, more importantly, when we’ve fallen short
- Sharing their platforms so we could tell our story, those of our companies, and most importantly the communities they’ve chosen to empower.
This is what gives us hope in these deeply challenging times. There’s never been a more diverse, committed group of people motivated to do what’s right, say what’s wrong, and to build a better future.
We see it all around us. You keep us determined and hopeful.
Kesha, Brittany, Kaiton, Melissa, Stefanie & Yui
The Impact America Fund Team