It’s time for LP to take on more responsibility in the fight for economic equality

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past decade saw black founders raise a vanishingly small portion of venture capital funding. How to solve a problem? This question is always answered with the same answer: allocate more capital to black entrepreneurs.

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But it hasn’t happened yet. In fact, black founders get less than 1.5% all venture funds, whether it’s a bull market or a bear market. So what’s going on?

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It may be time to focus this discussion on limited partners (LPs), especially since they are at the very top of the venture capital power structure. According to McKeever Conwell, founder RareBreed Venturesif LPs don’t allocate more money to various funds or managers, then in some sense there will always be a shortage of capital that can – and probably will – be distributed among the different founders.

At the institutional level, the burden of change falls on those who have the power to implement it. Supporting different foundations means supporting different thinkers and their networks. it is necessary, then to pressure LPs to support more funds that prioritize diversity, support different funds and managers, and create dedicated funds to invest in different founders.

“Reward actual behavior, not intention.” Kerry Schrader, co-founder of Mixtroz

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The amount of capital allocated to various persons must increase, and LPs must first care and rehash their core values ​​to ensure economic fairness.

“There will always be reasons to wonder how much they really care,” Conwell said. But we’ll see in time.

Mandate of Responsibility

LPs have the power and flexibility to require that at least a portion of their capital be allocated to various founders because fund managers owe them as the source of their money, Esosa Johnson, co-founder of Black Women Talk Tech, told TechCrunch.

“Their feet didn’t push into the fire,” she said of the fund managers. “After all this time, they should be held there.”


Credit: techcrunch.com /

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