Visible Hands, a Boston VC firm dedicated to helping underrepresented founders, announced Tuesday that it has raised its first fund.
The company plans to use the $10.5 million fund to back startups founded by women and people of color. The goal is to address a major shortfall in venture capital investing, where only 1 percent of funding goes to companies with Black founders and about 2 percent to women-led companies. Investors included Bank of America, Equity Alliance, Brown Advisory, and Atento Capital of the George Kaiser Family Foundation.
The death of George Floyd in 2020 drew attention to the lack of opportunities for people of color in the investment area and many firms pledged to do better. But over time, some of those commitments have waned.
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“At this point, being two years away from it, you’re seeing now the investors who are committed and want to be in the space,” Yasmin Cruz Ferrine, general partner and cofounder of Visible Hands, said. “As we’re seeing economic headwinds, there will be a further clarifying moment of who truly is committed to this. Other emerging managers who have not clearly delineated a diversity mandate in their investment thesis have told me they raise more money without it.”
Cruz Ferrine cofounded the firm with two partners two years ago, after working in community investing at John Hancock Financial Services. Cofounder Daniel Acheampong was advising startups at MIT and had previously worked at Goldman Sachs and Summit Partners. The third cofounder, Justin Kang, had worked at two global startup accelerators and was the executive director of City Awake, a Boston Chamber of Commerce effort aimed at helping young professionals.
The Visible Hands team stood out among the many underrepresented emerging fund managers who have approached Eli Velasquez, managing partner of a group of diverse investors called the Investors of Color Network.
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“This team should be a model,” Velasquez said. “They built a great pipeline of companies that was ready for investment. They took a ‘heads down’ approach and decided to work behind the scenes to raise their fund, find great companies, and deploy their capital.”
Before raising its first VC fund, Visible Hand, which now has 17 employees, ran an accelerator program with backing from corporate sponsors to help early entrepreneurs get started. The first program last year had 911 applicants for 35 positions. Startups from that first cohort have gone on to raise another $14 million beyond Visible Hand. This year, 1,413 applied to the program.
In May, Visible Hands joined with Google to start a program dubbed VHLX to help Latino entrepreneurs build new businesses.
“We’re just getting started,” Cruz Ferrine said. “Imagine the possibilities for us and for this ecosystem. We’re geared up to grow.”
Aaron Pressman can be reached at aaron.pressman@globe.com. Follow him @ampressman.