SoftBank Launched $100M Fund to Invest in Founders of Color
This Wednesday, SoftBank launched the $100 million Opportunity Growth Fund, which “will only invest in companies led by founders and entrepreneurs of color”, said SoftBank’s COO Marcelo Claure, according to AXIOS.
In response to protests across the U.S. sparked by the killing of George Floyd by police and to stand against inequality and racism, SoftBank has invested in businesses led by people of color.
“The Opportunity Growth Fund will be the biggest fund providing capital to black Americans and people of color,” said Claure. “We believe in these founders.”
The firm announced that it “will not take a traditional management fee” on the Opportunity Growth Fund and will invest in “companies that use technology to disrupt traditional business models.”
Similarly, Bank of America announced a $1 billion, four-year program that “addresses economic and racial inequality”.
Roughly 50% of gains from the investment will be reinvested into future programs with similar aims. SoftBank will donate a portion of the gains to organizations that “create opportunities for people of color.”
The firm also acknowledged that it needs to “do better at hiring underrepresented groups for open roles at SoftBank and our portfolio companies, especially for leadership and board seats.” To redress the imbalance of power, it announced the creation of a diversity and inclusion program.
Claure will oversee the fund alongside Shu Nyatta, a managing partner at the firm’s Innovation Fund. The company also named two black Silicon Valley executives Stacy Brown-Philpot and Paul Judge as its “founding members” and “fund advisors”.
“Founders and entrepreneurs of color have so much potential, but they face unfair barriers that white founders don’t face,” said Claure. “This is our opportunity remove those barriers for a new generation of founders.”