Illumen Capital Doubles Down on Support for Underrepresented Fund Managers and Founders
A New Catalyst Fund with a $32.75 Million Raise Aims to Address Racial and Gender Bias in Investing
In the midst of a challenging time for diverse funding managers and founders, Illumen Capital is doubling down on its commitment to supporting emerging fund managers and founders from underrepresented communities. The impact fund of funds has announced the raise of a new $32.75 million ‘Catalyst Fund’ to continue addressing racial and gender bias in investing.
The Problem of Bias in Investing
According to Crunchbase, Black founders raised less than 1% of venture capital funding last year, with that group on track to see a continued decline in funding. Daryn Dodson, founder of Illumen Capital, spoke to TechCrunch about the issue: "During times of economic uncertainty, political polarization, and concerns of ongoing inflation, we’ve seen biases increase." These biases are also playing out in the venture space, where billions of capital is still being allocated to the same people.
A Complementary Strategy
The Catalyst Fund is a complementary strategy to Illumen Capital’s first two funds. "Whereas our Fund I and Fund II focused on more established managers, the Catalyst Fund prioritizes first-time managers and early-stage founders," said Dodson. The fund was intentionally designed as a smaller vehicle, with anchor investors from Illumen Capital’s previous Fund II, including the Ford Foundation and Health Forward Foundation, backing the latest fund.
Investment Focus
The Catalyst Fund hopes to invest at least 65% of its capital into first-time venture managers and up to 35% in direct co-investments into companies sourced through any of its active funds. Dodson noted that "at least 80% of the fund will likely be focused domestically, with up to 20% in emerging markets." The fund will look at managers working in education, health and wellness, financial inclusion, climate, and sustainability.
Market Inefficiency
Dodson hopes to deploy the Catalyst Fund within the next year and a half. "We see our Catalyst Fund taking advantage of a market inefficiency," he said. "With the Catalyst Fund, we hope to demonstrate the intrinsic value of backing diverse-led funds, and identify the best of the next generation of venture managers."
Support for Underrepresented Communities
The Catalyst Fund is a testament to Illumen Capital’s commitment to supporting underrepresented communities in the venture space. By prioritizing first-time managers and early-stage founders from these communities, the fund aims to address the systemic biases that have led to disparities in funding.
A Catalyst for Change
The Catalyst Fund has the potential to be a catalyst for change in the venture space. By investing in diverse-led funds and identifying the best of the next generation of venture managers, Illumen Capital is taking a proactive approach to addressing racial and gender bias in investing.
Impact and Sustainability
Illumen Capital’s focus on impact and sustainability is driving its commitment to supporting underrepresented communities. The Catalyst Fund is designed to prioritize first-time managers and early-stage founders from these communities, with the goal of creating a more equitable and sustainable venture space.
Conclusion
The Catalyst Fund is a significant step forward for Illumen Capital and its mission to address racial and gender bias in investing. With a $32.75 million raise, the fund has the potential to make a meaningful impact on the venture space. As Dodson noted, "We see our Catalyst Fund taking advantage of a market inefficiency." By prioritizing diverse-led funds and identifying the best of the next generation of venture managers, Illumen Capital is demonstrating its commitment to creating a more equitable and sustainable future for all.
About Illumen Capital
Illumen Capital is an impact fund of funds that has previously supported ways to address racial bias in investing. The firm was founded by Daryn Dodson and has approximately $285 million in assets under management. Its previous Fund II raised $168 million in 2023, with a focus on addressing racial and gender bias in investing.
About Daryn Dodson
Daryn Dodson is the founder of Illumen Capital. He has previously spoken about the issue of bias in investing, noting that "during times of economic uncertainty, political polarization, and concerns of ongoing inflation, we’ve seen biases increase." The Catalyst Fund is a testament to his commitment to addressing these issues.
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Conclusion
The Catalyst Fund is a significant step forward for Illumen Capital and its mission to address racial and gender bias in investing. With a $32.75 million raise, the fund has the potential to make a meaningful impact on the venture space. As Dodson noted, "We see our Catalyst Fund taking advantage of a market inefficiency." By prioritizing diverse-led funds and identifying the best of the next generation of venture managers, Illumen Capital is demonstrating its commitment to creating a more equitable and sustainable future for all.
Final Thoughts
The Catalyst Fund is a testament to Illumen Capital’s commitment to supporting underrepresented communities in the venture space. By prioritizing first-time managers and early-stage founders from these communities, the fund aims to address systemic biases that have led to disparities in funding. As the venture space continues to evolve, it will be essential for companies like Illumen Capital to lead the way in creating a more equitable and sustainable future.
Additional Resources
- Impact Investing: Learn about the growing trend of impact investing and how it’s shaping the venture space.
- Diversity and Inclusion: Discover strategies for promoting diversity and inclusion in the workplace, including training programs and employee resource groups.
- Venture Capital: Stay up-to-date on the latest news and trends in the venture capital industry, including funding rounds and notable exits.
