Announcing New VC Partner Challenge

A Call for Venture Capitalists

Bridging the gap between diverse founders and the capital they need to grow highly profitable ventures

This week we announced our new VC Partnership Challenge and shared the partners who are already stepping up. 

In the current investing ecosystem, the majority of VC firms are made up predominantly of white males, and studies have shown the companies they tend to invest in are overwhelmingly founded by white men. 

With only 3% of VC funding going to women-led startups and less than 1 % going to startups led by Black or Latinx founders, DivInc is challenging the VC community to a partnership that can change these statistics. 

Wild Basin Investments, Next Coast Ventures, Notley Ventures, Golden Section Venture Capital, Moonshots Capital, and Ecliptic Capital are all partnering with DivInc to lead the way. These DivInc VC partnerships are designed to address the pervasive inequality in the world of venture capital by providing financial support to DivInc, a 501c3 nonprofit organization, so it can expand its startup accelerator offerings, and by VCs providing concrete support to help DivInc’s portfolio companies grow their startups. 

“We recognize that to truly make the startup ecosystem more diverse, we need to help build out the pipeline. Supporting and working directly with DivInc and early-stage founders help more underrepresented entrepreneurs have the opportunity to become VC ready. I think all VCs in Austin, and throughout Texas, have an opportunity, and perhaps a responsibility, to actively participate in helping more underrepresented entrepreneurs succeed.”

- Rosa McCormick, Managing Partner of Wild Basin Investments

These new partnerships with VCs allow DivInc to offer continued, structured support to their startups for an additional 24 months after they complete the accelerator programs.

“We know that even when people of color and women founders get in the door and in front of investors, they’re held to some kind of different standard. Most times, they have to overcome higher perceptions of risk and trust, than their white, male counterparts. Much of this is grounded in bias. At the end of the day, we want to create mutually beneficial relationships between DivInc, diverse founders and VCs. It's about creating real and equitable opportunities for greater success for the founders, be it mentorship, network connections or direct investment. These partnerships are about making things happen.”

- DivInc CEO, Preston L. James, II

Our new partnership with Next Coast Ventures, for example, includes three core programs: (1) financial support to DivInc, (2) sustained three months, 1:1 mentorships designed to help founders achieve specific, identified strategic objectives and milestones, and (3) access to the firm’s network to assist with fundraising, recruitment, and strategic introductions.

As a challenge to other VCs, Wild Basin Investments has committed up to $25,000 to match the next 10 VC general partners to join DivInc’s Founders Circle for a minimum donation of $2,500 each. This dollar for dollar match will drive these collective donations to $50,000, which will sponsor 20 underrepresented startup founders in DivInc’s accelerator program!

If you’re up to the challenge and want to support underrepresented founders in Austin, contact Monica Morales, VP of Development, at

What’s been broken between VCs and diverse founders? 

Merriam-Webster defines venture as an undertaking involving chance, risk, especially a speculative business enterprise. When combined with capitalism a venture must be willing to take a chance based on incomplete information. In the cases of the currently broken relationship between Venture Capitalism (VC) and diverse founders, lack of knowledge (or incomplete information and understanding) has been the number one hurdle. The cause of that disconnect is most often attributed to unconscious (or even conscious) bias built into the VC system. We’re forced to ask ourselves, are founders being assessed on facts or impressions, assumptions, and bias? 

If VC's don’t agree that there is currently a  problem in the system, then they can’t really succeed in helping to create an impactful and lasting solution. People are invariable and complex. Relationships require positive honesty and attention in order to work toward a long term outcome,  and it’s the investor’s responsibility to nurture those dynamic intricacies with potential investment portfolio companies.

Entrepreneurs know the most common way of doing things is not necessarily the most innovative. When there is an existing company performing well, addressing a problem, and leading the market, it’s not out of the norm for diverse founders to challenge that position. This is either because the company is not properly serving people of color, or they have a large hole in their solution that presents a tremendous opportunity. 

This should be the motivating factor for VC's to investigate this opportunity further rather than an excuse to tell the founders why they won’t win against the 10-ton behemoth. The reality is, most of the large competitors have very small percentages of if any people of color in leadership or on their product teams. There is a reason those currently leading industries don’t see the opportunities we, people of color, see, and they won’t until we’ve made it relevant. This is where DivInc intends to mend this broken relationship in partnership, in collaboration with VCs who are willing and ready to go.

What’s our vision for the future through these partnerships?

Visionaries live in a universe that orbits around what could be. Founders imagine that through innovation, we are primed to transform entire industry segments, markets, and even society. These entrepreneurs typically are talented, dogged, persistent, and creative. They form the core of the economic growth engine. But, their strengths can also be their weaknesses. Their belief in the vision can obstruct their appreciation of the details and processes necessary to make it happen. Their optimism can lead to over-promising and under-delivering. Persistence and perseverance, qualities vital for success, can kill a venture if the visionary surrenders good judgment to his will to succeed. That's why a potentially game-changing developmental step in the life of a start-up is the assembly of VCs to complement as well as counterbalance the founders, collaborating to build the next rocket growth venture together.

In addition to crucial start-up capital, the best VCs provide three additional kinds of capital: social capital, in the form of access to networks they can tap for recruiting or business services or partners; intellectual capital in terms of providing insight from their experiences that will help the founder navigate complex situations and anticipate challenges and crises; and interpersonal capital, or a willingness to serve as a sounding board and/or mentor to the founder. We envision a community of VCs who sit on the same side of the table with the startup founders through their evolution over time with the understanding that each stage of the relationship requires a more complex mix of personal and professional skills in both the founder and the VC. 

Learn more about our founders and our work!

DivInc FY 2019-2020 Impact Report