£20 million fund to back startups led by diverse teams in UK unveiled by Cornerstone VC
Atomico’s 2021 ‘State of European Technology’ report found that just over 1% of all VC funding in Europe went to teams made up solely of ethnic minorities
In comes Cornerstone VC, stepping up to change this situation. Born out of black-led angel group Cornerstone Partner, it has rolled out a £20 million fund to invest in extraordinary entrepreneurs in the UK that come from diverse backgrounds. The fund has put in place to support tech companies at pre-seed and seed stage. The ticket size is of £250,000 and £1 million and has capital reserved for follow-on funding.
The fund aims to invest in up to 40 companies, with a big proportion of them based outside of London. Cornerstone’s angel network will also receive a share of the fund’s profits through carry participation. The mission is to build a leading VC firm with a investment strategy that is diversity-led and unlocks outperformance while delivering returns for investors.
But what companies or on their radar? The VC will target management teams with inherent (ethnicity, gender, age) and acquired diversity (social capital) and address the equity funding disparity for those entrepreneurs that are far too often underestimated and overlooked by the general funding community.
The first round close of the fund was spearheaded by BGF and The Hg Foundation and Atomico also participated. Nic Humphries was among the other investors, as well as other senior partner from Hg, a leading services and software investors, other individual investors including former BVCA chair Neil Macdougall, Jamie Broderick, Stefan Ericsson, Sidumiso Sibanda, and Scott Mackin.
Managing partner at Cornerstone Partners, Rodney Appiah, said “We are on a mission to put teams at the heart of our investment approach, believing diversity is key to driving outperformance. We are looking for businesses that are intentional about team composition, can excel in high-growth environments, and are truly obsessive about execution. People first, software second.”
Stephen Welton, the executive chair at BGS said “The seed-stage tech fund complements BGF’s established minority investment for small and mid-sized growth businesses. BGF is actively committed to supporting a targeted range of activities where the objective is to make a real and meaningful difference to broader representation in the investment and entrepreneurial communities. We are very encouraged that the work we have done supporting female entrepreneurs has resulted in us being the most active investor in women-led scaleups in the country.”
And senior partner and executive chairman at Hg, Nic Humphries, concluded “Our experience has demonstrated that diversity in leadership often leads to better investment and business decisions. Diversity in the technology sector continues to be a priority for us, the businesses we invest in and is also at the heart of The Hg Foundation.”
Want to read more about diversity in UK tech? How To Improve Your Diversity Recruiting: 9 Tips