Improving Access to Capital for Diverse Founders & Managers | #𝗦𝗔𝗟𝗧𝗡𝗬 | Summary and Q&A

TL;DR

This panel discussion focuses on the importance of improving access to capital for diverse founders and managers, addressing the low percentage of AUM managed by diverse managers and the lack of proportionate capital received by black and latinx female founders.

Key Insights

• 🔠 The need for improving access to capital for diverse founders and managers is evident from low percentages of AUM managed by diverse managers and disproportional capital allocation to black and latinx female founders.
• 🛤️ Allocators should reassess traditional track record requirements and focus on skills and alternative ways of assessing managers' potential.
• 🏛️ Bank of America's program demonstrates the power of institutional support in generating commercial returns and building the next class of diverse asset managers.
• 🔠 The industry should expand its efforts to support diverse founders, not only in venture capital but also in credit, fixed income, and other capital structures.
• 👻 It is vital to distinguish between impact-focused investments and commercial investments in diversity, allowing diverse fund managers to focus on building successful businesses.

Transcript

foreign New York conference and thank you for joining our panel discussion today on improving access to capital for diverse Founders and managers my name is Vaughn Crowe I'm one of the managing Partners at Newark Venture Partners I'll be your moderator this evening Newark Venture Partners is a seat stage B2B investment firm um national student stag... Read More

Questions & Answers

Q: How does Cambridge Associates address the issue of track records for managers who may have taken a different route to venture capital or private equity?

Cambridge Associates aims to invest equitably by reassessing traditional requirements in due diligence. They focus on skills and networking opportunities to assess managers' potential and use extensive contacts and data to validate their track records.

Q: How does Bank of America's investment in diverse managers contribute to increasing access to capital?

Bank of America's program allocates capital to early-stage funds managed by diverse managers, which, in turn, supports diverse founders. The program aims to be catalytic and disruptive, generating a triple layer of effect by supporting diverse managers, diverse founders, and diversifying the industry.

Q: How does Morgan Stanley's Multicultural Innovation Lab find and support underrepresented founders?

The Multicultural Innovation Lab actively seeks out underrepresented founders in women-led and multicultural-founded early-stage companies. They provide capital, resources, and mentorship to help these founders grow their businesses and connect them with the broader market.

Q: Can access to capital for diverse founders and managers become a sustained effort rather than just a moment in time?

The panelists believe that the industry's commitment to increasing access to capital for diverse founders and managers is sticky, with efforts made to make it a long-term focus. They emphasize the value of diverse strategies, the potential for competitive returns, and structural changes to ensure continued support.

Summary & Key Takeaways

• The Knight Foundation study shows that only 1.4% of total US-based AUM is managed by diverse managers, highlighting the need for improved access to capital.

• Despite record-breaking venture investments, black and latinx female founders did not receive proportionate capital to start their businesses, according to Crunchbase.

• The panelists, representing Newark Venture Partners, Morgan Stanley, Cambridge Associates, and Bank of America, discuss their approaches to supporting diverse founders and managers and the importance of creating equitable opportunities.