The burgeoning field of women and minority-focused invest firms is getting attention from major players, with early-stage VC firm Harlem Capital Partners (HCP) seen as the “go-to partner for minority founders” by TPG Capital.
TPG Capital, the PE giant with $108 billion in assets, signed agreements to buy a non-controlling stake in HCP, committing an undisclosed amount to HCP Fund I, which is reported to be $25 million.
Founded by four black Harlem residents in 2015, HCP has invested in 10 companies, including Aunt Flow, a menstrual products provider for workplace bathrooms. With a goal of lifting underserved entrepreneurs, HCP plans to invest in 1,000 black, Latino and women founders in 20 years.
- Less representation results in less funding: Women partners make up 8% of top 100 VC firms in the U.S., and only 2.3% of $130.9 billion invested went to female founders in the U.S. in 2018, according to Pitchbook and TechCrunch. Only 2% of investment professionals are black, according to a Deloitte survey, and they’ve raised the $370 million in 2018, but the percentage of capital goes to black business is yet to be recorded.
- Minority-focused investment firms is picking up steam. Notably, female black investor Arlan Hamilton’s Backstage Capital has invested $50 million in 100 companies founded by women and LGBTQ and people of color, while running late to close its $36 million second fund.
- HCP launched another high-profile partnership with KKR in May. Under the recruiting partnership, HCP will help refer its female and minority interns to KKR for career advancement.
- Karma Take: The rising wave of emphasizing racial and gender diversity in investments underscores minorities’ ability to identify and support enterprises that would otherwise remain underserved.