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According to an email seen on TechCrunch, Colorful Capital will stop trying to raise a fund. The company launched in 2022 with the goal of focusing on investing in LGBTQIA+ founders. It’s not clear if the company is closing down permanently.
William Burckart, Megan Kashner and the co-founders of Colorful Capital declined to comment.
Former employee who worked on the investment team, but asked to remain anonymous out of fear of retaliation, told TechCrunch this fund would have marked the first for the firm and that Colorful had been struggling to raise since it launched in 2012. It was then trying to raise $10 million for 13 pre-seed and 12 seed deals. Check sizes started at $300,000. An employee who was familiar with this matter said that the idea was to cut follow-on check and co-lead the deals. PitchBook shows the firm has made four investments since its launch. These include clothing company Springrose, and health tech Mate Fertility.
The former employee said, “It is unfortunate.”
This news comes amid a wider investor pullback away from businesses and organizations that focus on diversity, equity and inclusivity. Black founders have seen a decline in funding while tech organizations such as Girls in Tech, and Women Who Code had to close. Bloomberg reported that the venture fundraising market is difficult for many companies and founders particularly emerging fund managers. The stakes for getting money from investors and LPs are much higher unless one is already a big name, such as , or raising in AI.
The former employee said, “We’re going see more stories like these as the market continues its consolidation.”
According to the email, Colorful Capital published white papers during its tenure about the lack venture capital dollars flowing towards LGBTQIA+ entrepreneurs and received support from the larger community in its quest to achieve venture equity. Burckart and Kashner said they were proud of all the support they received over the past few years, and that they will continue to work on improving capital access for the LGBTQIA+ communities in their individual capacities.
The email concluded with “Rest assured.” “You will continue seeing us on the frontlines.”
