Colorado’s first black-owned and black woman-led venture capital firm recently partnered with the state with the goal of expanding access to capital to diverse entrepreneurs.
The New Community Transformation Fund – Denver received $5 million from the Colorado Venture Capital Authority in the fund’s first closing round.
Launched in July, the fund aims to invest in early- to mid-stage businesses owned and operated by entrepreneurs of color.
“We understand that great investments recognize undervalued, undervalued, emerging markets, and founders of color often fit that bill,” said founding partner and managing director Danielle Shoots.
She described the fund’s vision as one of “a more equitable economy,” with its team committed to “making venture capital available to founders who experience barriers to funding.” Its mission also includes generating above-market returns.
Last year, Colorado ranked No. 7 in the US for its total number of venture capital deals and its total amount of capital invested in those deals, the Colorado Office of Economic Development and International Trade reports.
“In 2021, venture capital funding in Colorado shattered previous records, and we want to see more Coloradans benefit from that growth,” said Thea Chase, chair of the Venture Capital Authority’s Board of Directors.
Colorado is home to 674,741 small businesses, with 1.2 million employees, according to the state’s 2021 Small Business Profile by the US Small Business Administration’s Office of Advocacy. Racial minorities owned 7.4% of those businesses.
The New Community Transformation Fund – Denver is looking for founders located and operating in Colorado — or are willing to relocate — who want to build diverse workforces and expanding.
“As a businessperson, I know what it’s like to build something from the ground up, which is why I’m proud that this exciting partnership boosts entrepreneurship and innovation in Colorado,” said Gov. Jared Police on Oct. 27 when the partnership was announced. “We are continuing to support entrepreneurs to grow and diversify Colorado’s strong economy, as we build an economy that works for all.”
The fund’s limited partner investors in Denver include Bank of America and the Colorado Housing and Finance Authority. Its first close was announced on Oct. 13, with Bank of America among the five initial investors to dedicate a combined total of $10.6 million.
“By accelerating the flow of capital into funds that invest in Black-African American, Hispanic-Latino, other under-represented minority- and women-led businesses, we can help level the playing field and drive greater job and creation,” said Raju Patel, president of Bank of America Colorado.
The New Community Transformation Fund – Denver aims to raise a maximum of $50 million by next year.
“Smart investing means investing in founders of color,” Shoots said.