An Indianapolis-based seed-stage venture capital firm has closed on a $20 million fund. Sixty8 Capital says the fund will support Black, Latinx, LGBTQ+ and women-led startups, particularly in the Midwest. Managing Director Kelli Jones says the fund is designed to not only help diverse founders grow their businesses, but also “lift the veil” on how venture capital works and how it can potentially impact the small business and micro-enterprise community.
In an interview with Inside INdiana Business, Jones said the firm wants to show the opportunity that is out there for diverse startups.
“There’s a potential $4 trillion in buying power that we’re missing when we don’t invest in diverse entrepreneurs,” said Jones. “We’re missing out on increases on our bottom line between 30% and 35% when we don’t have diverse teams. We’re missing out on new innovations and products that are built for communities that may not be understood by traditional VCs and then we also see just the number of exits that happen when you’re looking at diverse entrepreneurs and you see an almost a 2-3 point increase between white male founders and diverse founders.”
Sixty8 Capital says it plans to invest in 25 to 30 pre-seed and seed-stage companies with initial funding between $250,000 and $500,000 per company. The firm says its investments will focus on “uncovering potential among diverse founders whose access to capital is limited by race, gender, sexual orientation or proximity.”
The firm has already begun its efforts with its first investment in Indianapolis-based Qualifi, a Black-led Software-as-a-Service company focusing on helping recruiters improve their hiring efficiency. Co-founder and Chief Executive Officer Darrian Mikell says the firm’s support goes beyond the investment.
“The team will play an active role in advancing management teams, optimizing marketing and sales, and assisting with acquisitions, as well as strategizing for a potential exit,” Mikell said in a news release. “Being able to collaborate with them on strategy and leverage their decades of experience is invaluable. Kelli, specifically, has been a champion for Qualifi since the very beginning. She always made us feel confident that we would succeed. Having Sixty8 Capital as an investor is a signal to the broader VC community that Qualifi is a startup worth watching.”
The venture fund was created with support from the Indiana Next Level Fund, 50 South Capital, Bank of America (NYSE: BAC), Eli Lilly and Co. (NYSE: LLY), First Internet Bank (Nasdaq: INBK), and the Central Indiana Community Foundation.
Jones says having such a large group of investors says a lot about Indiana and the broader Midwest.
“That’s them saying, you know, ‘We believe in not only diversity, but also investing in diversity and ensuring that founders are getting the support they need,'” said Jones. “But I think even better is there’s a unique opportunity for strategic partnerships, potential opportunities to look at supplier diversity as we’re funding different companies. So, it really impacts the entire train when it comes to seeing diversity.”
Jones says the firm plans to make eight to 10 investments per year and is currently looking for Black, Latinx, women and LGBTQ+ founders to apply for funding. You can learn more by clicking here.
Jones says the firm wants to show the opportunity that is out there for diverse startups.