Progressive Technological Ventures: In Unwavering Pursuit of Diversity Amid Rising DEI Opposition

Black Tech Nation Ventures was founded in 2021 with a specific mission in mind – to address the lack of funding for Black founders amidst a surge of diversity initiatives in the world of venture capitalism following the tragic murder of George Floyd in 2020.

Fast forward three years and the firm’s purpose is now more important than ever as the industry faces growing backlash against diversity-focused investments.

Headquartered in Pittsburgh, this venture firm has successfully raised $50 million for its debut fund, which will be used to support pre-seed and seed-stage software startups led by underrepresented groups such as Black, women, and LGBTQ+ communities.

Some notable backers of the firm include tech giant Alphabet, First National Bank, and billionaire entrepreneur Mark Cuban.

“Initially, raising our first fund was a race, then it became a slog,” explains David Motley, a general partner at BTNV, in an interview with TechCrunch. He elaborates that in 2021, the firm experienced some success in fundraising, achieving a first close of $25 million that year. This was largely due to a surge of investors looking to support diversity-focused funds and favorable conditions for emerging managers. Thus, the firm had originally planned to close the fund by 2022 summer. However, market conditions changed, and investors began backing away from their diversity investing goals as they did in 2019.

“The pushback is real,” Motley shares. “We have witnessed a rapid decline in funding for diverse founders and Black-led venture funds. The level of funding has returned to 2019 levels.”

Although diversity pushback is not unique to the venture industry – with states like Oklahoma defunding DEI efforts at public colleges and the Supreme Court ruling affirmative action as unconstitutional in June 2020 – it certainly has an impact. Case in point, Atlanta-based venture firm Fearless Fund faced legal pressure from conservative activists for its focus on grants and funding for diverse founders, claiming it to be discriminatory.

Given these recent events, firms like BTNV may find themselves caught in the ripple effects. However, Motley explains that this change in the overall narrative around DEI does not discourage the team. Instead, it reinforces their belief in their thesis.

“The industry is structured to do what it has historically done. 2021 and 2022 were in some ways an anomaly, and then there was a return to normalcy,” Motley reflects on the short-lived surge of support for diversity-focused VCs. “Funds like ours came out of that time frame. Now, we are positioned to prove that this should not be just a moment or initiative. These investment opportunities should be taken seriously.”

With checks ranging from $250,000 to $1 million, BTNV focuses on enterprise software solutions in various sectors, including fintech, edtech, and clean tech. The firm invests across the U.S. and has a particular interest in founders based outside the coastal hubs. Since its first close, the fund has invested in 10 companies, with a presence in cities like Cleveland, Indianapolis, and Atlanta.

Motley shares that the firm hopes to extend its impact beyond its $50 million assets under management by leading the fundraise round and helping startups find additional investors. As a lead investor, BTNV aims to introduce other VC firms to companies they may not have considered otherwise. On the other hand, underrepresented founders may struggle to secure additional funding despite finding a lead investor.

The firm also collaborates with Black Tech Nation, a nonprofit organization run by BTNV general partner Kelauni Jasmyn, which has created a digital network of Black tech professionals. While the two organizations are separate entities, sharing the same name, Motley hopes that they can collaborate on events, connect talent, and even find potential founders through the network.

Despite their focus on backing underrepresented founders, Motley emphasizes that the main goal for Fund I is to produce top-tier returns that would justify raising subsequent funds. He believes that by targeting these underserved markets, they will reach their goal.

“The opportunity here is to rise above the politics of the moment and prove that it is in everyone’s best interest to support the best deals, founders, and venture funds,” Motley says. “It doesn’t matter what your political beliefs are. If we can achieve this, it will benefit everyone and our country. This goes beyond any pushback one might face for championing what we believe in.”