Illumen Capital is increasing its support for fund managers and founders from underrepresented communities.
As an impact fund of funds, the company has previously supported ways to address racial bias in investing. Yesterday, the firm founded by Darrin Dodson announced it had raised a $32.75 million Catalyst Fund to once again support emerging fund managers and founders, particularly those from underrepresented backgrounds. did.
This news comes at a difficult time for many diverse funding managers and founders, with less financial support than ever before. Black founders raised less than 1% of venture capital funding last year, according to Crunchbase, and the group's funding continued to trend downward in the first half of the year.
“We're seeing increased bias in terms of economic uncertainty, political polarization, ongoing inflation concerns,” Dodson told TechCrunch. He added that it is also having an impact in the venture field, where billions of dollars of capital still exist. They go to the same people.
When asked about the funding, Dodson said the firm was fortunate to have “established deep relationships” with limited partners who are “committed to supporting the next generation of VC and PE managers.”
The company says it has approximately $285 million in assets under management. Finally, we raised $168 million Fund II in 2023 to also address racial and gender bias in investing.
Dodson said the Catalyst Fund is a complementary strategy to the first two funds. “While our Fund I and Fund II focused on more established managers, the Catalyst Fund prioritizes first-time managers and early-stage founders,” he continued. “This is an intentionally small vehicle, and we are fortunate that two of our Fund II lead investors, the Ford Foundation and the Health Forward Foundation, supported this latest fund.”
The fund hopes to invest at least 65% of its capital in first-time venture managers and up to 35% of its capital as direct co-investments in companies raised through active funds. “At least 90% of the fund is likely to be domestically concentrated,” Dodson continued. “In emerging markets, it’s up to 20%.”
The fund said it will generally target executives working in the fields of education, health and wellness, financial inclusion, climate change and sustainability.
Dodson hopes to roll out the fund within the next year and a half. “We see our Catalyst Fund as exploiting market inefficiencies,” he said. “Through the Catalyst Fund, we hope to demonstrate the essential value of supporting diversely led funds and uncover the best and brightest among the next generation of venture managers.”