By CultureBanx Team
- Impact America Fund II raised $55M, the largest amount ever raised by a Black solo female fund manager
- In 2020, impact investing is expected to grow to more than $300B
The global need to address access to capital inequities is greater than ever and it lies with putting women and investors of color in the forefront. This is where Kesha Cash’s Impact America Fund II (IAF), a $55 million venture capital fund, the largest amount ever raised by a Black solo female fund manager, is poised to disrupt the traditionally vanilla-laced investor sector. When the venture capitalists calling the shots start to diversify, so will the capital commitments to founders of color who are shifting the business paradigm and building economically solvent companies.
Why This Matters: With impact investing on the rise lots of capital has poured into social impact venture capital funds and businesses. McKinsey forecasts impact investing to grow to more than $300 billion this year. Social impact companies need fund managers like Cash along with her team, who are ready to put capital into more than just benchmarks on a spreadsheet. “We believe when companies design their operations, products, services and strategies to be inclusive of the most marginalized, low income Black people, they will build a more creative, competitive, effective business model that attracts and serves a diverse universe of customers over the long term, Cash told CultureBanx.”
Social impact companies need fund managers like Cash along with her team, who are ready to put capital into more than just benchmarks on a spreadsheet
Deloitte surveyed 203 VC firms, representing more than $149 billion in assets on their talent management practices and the results for women and people of color weren’t great. Currently, Black employees only make up about 3% of the total venture capital workforce, with hispanic or latino VCs making up 4%. Those percentages are even more bleak when broken down to positions that actually make investment decisions.
Social impact companies need investors with expertise in developing and establishing a viable business model, basic operations, along with a solid capital structure. In The World Economic Forum’s “Global Risks” Report they determined it’s vital for global economic stability to address the inequity in access to capital. The need for growth stage impact investments is extremely high. Cash believes “diverse managers will over-index on investing in Black and brown founders and/or solutions that create value for Black and brown stakeholders (workers, small business owners, suppliers, and community members). Inclusive ecosystem development will take time, but the work is happening each and every day.”
Situational Awareness: Capital commitments to socially responsible companies will expand as the VC’s calling the shots start to diversify. The demographics of most venture backed startups reflects the venture capitalists that fund these companies, meaning change has to be a top down approach. Yes, it is possible for these companies to meet the financial challenges and goals the people backing them set out, while achieving the desired social returns. If nothing else, look no further than Cash’s IAF to really understand just how powerful impact investing is.
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