Colorful Capital, a venture capital firm focused on investing in LGBTQIA+-identifying founders, has paused its fundraising efforts for a new fund
It is uncertain whether the organization is permanently ceasing operations.
William Burckart and Megan Kashner, the co-founders of Colorful Capital, declined to respond.
TechCrunch was informed by a former employee previously employed on the investment team and requested anonymity due to concerns about retaliation. The employee stated that Colorful has been experiencing difficulty in raising the fund since its inception two years ago. At that time, the organization endeavored to raise a minimum of $10 million to execute 13 pre-seed and 12 seed deals, with check sizes commencing at $300,000.
The employee, who was acquainted with the matter, also stated that the intention was to co-lead transactions and issue follow-on checks. According to PitchBook, the organization has made four investments since its inception, including investments in health technology company Mate Fertility and apparel company Springrose.
The former employee regretted it, stating, “It is unfortunate.”
This information is released in a broader investor backlash against businesses and organizations prioritizing diversity, equity, and inclusion. Funding for Black founders is declining, and tech organizations such as Girls in Tech and Women Who Code have been compelled to cease operations.
Bloomberg reported that the venture fundraising market has been challenging for numerous firms and founders, particularly emerging fund managers. The criteria for obtaining funding from investors and LPs have significantly increased unless one is already a prominent, well-known figure or is investing in AI.
The former employee stated, “We will begin encountering an increasing number of similar stories as the market consolidates.”
According to the email, Colorful Capital wrote white papers regarding the lack of venture capital funding available to LGBTQIA+ founders. It received backing from the broader community in its pursuit of venture equity.
According to Burckart and Kashner, they are proud of the support they have received in recent years and are committed to continuing their efforts to improve capital access for the LGBTQIA+ community in their capacities.
Rest assured,” the email concluded. “We will persist in our presence on the front lines.”
