Since the killing of George Floyd, America has been attempting to have conversations about race and systemic racism. And this includes systemic racism in the corporate and venture capital worlds. Milwaukee's Northwestern Mutual wants to play a role in tackling systemic racism. Today, the Milwaukee-based company's venture capital fund, Northwestern Mutual Future Ventures will dedicate $20 million to invest in startups founded by Black entrepreneurs.
According to the press release, Black founders receive less than one percent of venture capital funding annually and Northwestern Mutual and gener8tor are committed to investing in and supporting Black entrepreneurs to help close this funding gap and advance their companies.
Northwestern Mutual Future Ventures is focused on advancing the company's investment strategy of engaging startups whose technologies have the potential to transform how people experience financial security. The investment criteria for the $20 million Black founder funding allocation is aligned with Northwestern Mutual Future Ventures' key strategic areas of focus:
- Building for consumers' changing financial preferences
- Reimagining the client experience
- The digital health revolution
- Transformational analytics and technologies
As part of this commitment, Northwestern Mutual Future Ventures partnered with gener8tor to create the Northwestern Mutual Black Founder Accelerator. The 12-week accelerator will run up to two cohorts of five companies a year and startups must be aligned to Northwestern Mutual Future Ventures' investment areas of focus. The first cohort will begin in early 2021.
Northwestern Mutual is the first major Milwaukee company to make such a major commitment. However, other individuals and organizations have made similar commitments. Back in July, Nadiyah Johnson announced a $50 million fund to invest in Minority-led startups.
There have been many major companies that have gone beyond simple statements of supports to committing actually dollars to tackle systemic racism in venture capital funding like Netflix, Amazon, Google and most recently PayPal.
And there are organizations and individuals who keeping these companies accountable like Sherrell Dorsey founder of The Plug, an online publication that reports on the Black Innovation Economy. Dorsey created a spreadsheet to track tech companies' statements and commitments to fight systemic racism. Dorsey will be a guest on an upcoming episode of 88Nine's new podcast Diverse Disruptors.
There is also the site 100kPledge, which is a public social contract and tracker for professionals and organizations committing to Black communities' economic empowerment through hiring, investment and donations.
What Northwestern Mutual is doing is a great start and I hope to see they collaborate with local groups who have been on the ground doing the work to support Black entrepreneurs and startups. I would also like to see more Black people get into venture capital. Organizations like HBCU.vc, Black Venture Institute and BLCK vc are committed to increasing representation of Black people in venture capital. According to BLCK vc, only 3% of venture capitalists are Black, with even fewer controlling the $100B+ invested annually in the U.S. Basically, who is better suited to invest in Black founders than Black investors. They know the problems and the opportunities in the communities they serve.
