Yale Philanthropy Conference 2023: “Advancing Justice” - Funding Social Innovation: New Models in Venture Philanthropy
I had the pleasure of organizing a panel on new models in venture philanthropy for the annual Yale Philanthropy Conference. With Ony Obiocha (CTNext) moderating the conversation, we heard from Sergio Marrero (Blue Ridge Labs @ Robin Hood Foundation), Dr Kimberly Osagie (Echoing Green), and Aaron Walker (Camelback Ventures). Consistent with the conference theme of “Advancing Justice,” the panel discussed barriers faced by underrepresented entrepreneurs, the work that the panelists’ organizations do to lower those barriers, and the gaps that remain. To share a few reflections from the panel:
It takes an ecosystem to solve a problem. It’s no secret that female and BIPOC entrepreneurs are woefully overlooked and underfunded. The most recent data shows that just 2.5% of VC capital goes to female-only founding teams and black entrepreneurs receive less than 2% of VC funding (and that number is dropping). Given the complexity and severity of the problem, there is no silver bullet. Start-ups need access to different types of financing, wrap-around services (HR, legal, technical assistance), and advice. No one organization can provide all of these services effectively: it takes a village.
As goes the leader, so goes the team. Simply providing capital is not enough; organizations working to support underrepresented entrepreneurs must also be thinking about the ways it can support founder well-being. To this end, Echoing Green offers a “secular chaplain” to its fellows as a resource to ensure they are getting the non-financial support they need.
To maximize impact, think “systems change.” Instead of searching for the next unicorn, Sergio Marrero is thinking of ways to empower 10,000 New Yorkers to start their own businesses and grow their income from five figures to six. Camelback Ventures takes it one step further with its Capital Collaborative: an initiative that teaches white grant-makers to diversify their networks and make their grant-making processes more equitable.
Funders should routinely re-evaluate their approach. As entrepreneurs are instructed to continually learn and adapt, so too should funders. On the panel, Kimberly Osagie referred to the “death valley curve,” a period in the start-up lifecycle in which seed capital and funder excitement have been depleted, and the company struggles to enter the next stage of growth. While Echoing Green had traditionally provided $80,000 seed grants to start-ups, after observing the “death valley curve” the organization has recently begun deploying larger, follow-on funding to its portfolio companies.
At one point in the conversation, Kimberly turned to Aaron and mentioned that one of the entrepreneurs in the Echoing Green portfolio had once been a Camelback Ventures fellow. Even though Echoing Green, Camelback, and Blue Ridge Labs each take a different approach to empowering underrepresented entrepreneurs, it’s incredible to see how the organizations work together to make it possible for female and BIPOC founders to defy the odds. Remember, it takes an ecosystem.