Deploying capital into untapped talent through a $50MM venture fund
It was 2013 and I was a young, solo, woman, first-time founder trying to raise capital in the Midwest for a legal tech product that was going to transform the way attorneys were preparing and filing court documents, starting with bankruptcy. I went coast-to-coast pitching my big idea but the questions I got rarely consisted of the product and team. I was asked about my engagement ring and when I planned to start a family, where my technical co-founder was, and what my fiancé did for a living. I applied for accelerators, attended tech events, sent thousands of cold emails and Twitter DMs, traveled on credit card points, and acted like I was “just in town” every time an investor said yes to a meeting. I even drove Gary Vaynerchuk from the airport to his hotel to pitch him in six minutes when he flew into Columbus, Ohio for an event. For eight solid months, I did everything I could to help my business grow faster and I never got funding.
Despite failing to raise capital, I didn’t stop building my company. I bootstrapped my way to launch in 2016, grew 14% month-over-month for 3 years, and was acquired in 2019. Shortly after the acquisition, I began angel investing and mentoring women and underrepresented founders. It became clear to me that I wasn’t the only one facing these biases and Black founders and women of color had it much worse than me.
In 2020 alone, only 2.3% of all venture capital went to women founders and less than 1.0% to startups with a Black founder.
That year, I met with thousands of founders, just like me, who had ambition and grit but no connections. Founders shared demos of impressive products, revenue numbers, and customer testimonials but had no wealthy family safety net to help the business grow. I made angel investments in nine companies through Let’s Start Up Ventures with systematically marginalized founders but knew that if I wanted to make a bigger impact in the startup ecosystem as a whole, I had to think bigger.
The Overlooked Journey
Brandon Brooks and I met on a Clubhouse stage in 2020 talking about the lack of transparency in venture capital and the need for more diverse fund managers. What started as weekly check-ins through Twitter DMs turned into regular phone calls about forming a fund together and six months later, we signed the operating agreement to be founding partners on a journey to invest in the next generation of diverse startups through Overlooked Ventures.
Overlooked Ventures is a venture capital firm focused on supporting and investing in early-stage companies with one or more historically ignored founders and provide them with capital, resources, and connections to scale their business. Filed as 506(c), Overlooked Ventures Fund I is $50MM pre-seed/seed-stage fund investing in 80–100 industry-agnostic startups in tech, tech-enabled, and D2C, with check sizes between $150–250K.
We’ve all seen the stats. Morgan Stanley says venture capitalists are leaving more than $4 trillion on the table by not investing in diverse founders. But according to a recent Kauffman Fellows study, companies with diverse founders actually perform 30% better.
“When companies invest in diversity and inclusion, they are in a better position to create more adaptive, effective teams and more likely to recognize diversity as a competitive advantage. Diverse teams are more innovative — stronger at anticipating shifts in consumer needs and consumption patterns that make new products and services possible, potentially generating a competitive edge.” — McKinsey, D&I Report 2020
But even so, funding for traditionally ignored founders is still dropping.
- 86% of VC funding in 2020 went to all-male founding teams (AllRaise)
- Only 2.3% of women founders received venture funding in 2020 (HBR)
- Investment in women founders dropped by 22% in 2020 (Crunchbase)
- Only 0.67% of Black founders received funding in 2020 (Crunchbase)
- Only 0.27% of total funding went to Black women and 0.37% went to Latinas in 2020 (ProjectDiane)
Diverse funders will fund diverse founders
A diversity report by West River Group says that diverse founding teams create more innovation and better business outcomes resulting in higher performance over the long-term. But not only does the founding team matter, you also have to look at the venture investing team. Diverse fund managers tend to invest in diverse teams. In fact, this 2020 report shows that firms with a woman partner had 9.7% more profitable exits and 20% higher net IRR in the global emerging markets.
The solution sounds simple right? Institutional investors and private equity should back emerging fund managers with women and Black general partners to see higher returns. But we can’t ignore the historical system issues in venture.
Historical systematic discriminatory policies and practices were foundational in creating Black Americans’ unequal access to financial services (Goldman Sachs)
This is where the work comes in. Black founders don’t have the privilege of gathering a friends and family round to get their idea off the ground. In fact, the net worth of a typical white family ($171,000) is nearly ten times greater than that of a Black family ($17,150) (Brookings)
To change the game, we have to fight the odds and fund systemically marginalized founders when they need it most — from day one.
This is why we’ve been intentional about selecting our advisors, all of whom have aligned mission and values to ours. We’re also intentional about who we will be bringing in as LPs, and who we fund. This purposeful belief is part of our Overlooked Advantage
The Overlooked Advantage
We roll-up-our-sleeves. As successful bootstrapped founders ourselves, Brandon and I know what it takes to get on the ground and work for founders.
The experience we have ranges from pitch help for future rounds to specific marketing and sales strategy and so much more. And if we don’t know the answer, we aren’t afraid to open our network and find someone who does through our extensive Founder’s Network of 100+ investors, operators, experienced professionals as well as our Advisory Board for the fund which includes seasoned VCs and startup mentors: Eric Bahn of Hustle Fund, Marie Rocha of Realist Ventures, McKeever “Mac” Conwell of Rarebreed Ventures, Saba Karim of Techstars, and Katelin Holloway of Seven Seven Six.
“I’m bringing my bootstrap mentality to help startup management teams optimize marketing and sales, recruit and retain team members, and assist with fundraising networks. Overlooked Ventures is more than just a venture capital fund. We’re working to get founders funded, while also giving them all the tools and advice they need to achieve their goals.” — Janine Sickmeyer, Founding Partner at Overlooked Ventures
We’re just getting started
*We have filed as a 506(c), which allows us to market and raise publicly.