Ten Leading VCs Team Up On A $50 Million Fu

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Ten Leading VCs Team

Up On A $50 Million
Fund To Back
Underrepresented
Investors

Alex Konrad Forbes Staff

Venture Capital
Covering venture capital, software and startups

Screendoor’s 10 founders teamed up across VC firms to

launch a fund-of-funds to back emerging fund managers
from underrepresented backgrounds. SCREENDOOR

Would-be venture capitalists looking to raise a

n
fund for the first time often face a chicken-and-
egg problem: to raise money, they’re expected to
demonstrate a track record of promising startup
investments; to build such a portfolio, they need
to raise money.

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It’s a challenge felt even more by emerging fund

managers from underrepresented backgrounds,
say Homebrew partners Satya Patel and Hunter
Walk. “What we heard over the last few years as
we got approached by new managers hoping to
raise funds was that were plenty of
opportunities for them to get counsel or
mentorship, but what they really needed was
capital,” Patel says.
Now, Patel, Walk and eight other general
partners at established VC firms are trying an
experiment: raise their own fund together,
across firms, to bring the resources of some of
the industry’s elite limited partners into
emerging funds faster. Called Screendoor, the
fund is a $50 million-plus investment vehicle
that will look to back up to 15 underrepresented
investors raising their first institutional fund, all
while providing formal and informal training
and support without drawing carry or fees.

The ten partners behind Screendoor include

Aileen Lee of Cowboy Ventures; Eva Ho of Fika
Ventures; Kirsten Green of Forerunner
Ventures; Chris Howard and Leah Solivan of
Fuel Capital; Patel and Walk at Homebrew;
Kanyi Maqubela of Kindred Ventures; Charles
Hudson of Precursor Ventures; and Shauntel
Garvey of Reach Capital. The institutions
investing in Screendoor include the investment
arms of Davidson, Duke, Harvard, Michigan,
Princeton and Virginia; The James Irvine
Foundation; and investment firms Hall Capital
and Sapphire Partners.

By pooling the capital in a fund-of-funds like

Screendoor, such institutions can invest and
build relationships with new fund managers
they wouldn’t otherwise be able to back, Walk
says, as first-time funds often raise amounts too
small for a university endowment or large
foundation’s VC strategies. Every limited
partner in Screendoor is an investor in at least
one of the firms represented by Screendoor’s
founders, meaning Screendoor’s partners can
use their own reputations as a bridge. “This can
be a training ground for emerging managers to
scale ahead of direct relationships with some of
these larger institutions,” Walk says.

And while Screendoor’s own general partners

are VCs themselves and thus potential co-
investors and peers, the investors they back will
not be asked to share deal flow or more
information than they would with a typical LP.
Screendoor will make investments through a
rotating investment committee of three, starting
with Patel, Hudson and a representative of its
limited partner The James Irvine Foundation.
“Screendoor promises access to talented
emerging managers and allows us to begin a
relationship with these investors ahead of their
first institutional raises.
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“We’re participating not just as capital partners

but will contribute time as well, alongside the
hands-on mentorship Screendoor managers will
receive,” Jesús Argüelles, the foundation’s
director of investments, said in a statement.
“Over time I hope we’ll build direct relationships
with many of these firms.”

Screendoor is launching as a wave of new funds

and initiatives are picking up in the venture
industry, historically slow to major change but
galvanized over recent months since the death
of George Floyd. Those include the launch of
funds from Zane Venture Fund and Collab
Capital in Atlanta; a new fund from Harlem
Capital in New York; MaC Venture Capital in
Los Angeles; and Sixty8 Capital in Indianapolis,
among others. And other programs, such as a
new scout program launched by BLCK VC with
Lightspeed and Sequoia, have looked to inject
more investors into the ecosystem.

But such progress has been incremental at best,

still a relative drop in the bucket compared to
billions raised by traditional funds. That has
shut such investors out of what Patel calls
Silicon Valley’s “virtuous cycle,” in which
investors back tech companies that in turn
churn out more successful angel and venture
investors as they exit. “The unfortunate part is
that virtuous cycle has been inaccessible for
large portions of the population,” Patel says.

Screendoor hopes to help set up its own virtuous

cycle of underrepresented investors backing
underrepresented founders who elevate
underrepresented employees. But it doesn’t
presume to have all the answers. Screendoor’s
organizers will “open-source” their process for
any other groups looking to emulate or improve
upon it, Patel and Walk say; they also plan to
expand Screendoor’s investor group with future
funds.
Screendoor is in talks with some prospective
fund managers already, but the group haven’t
made any commitments yet. Interested
investors will be able to apply via open
application on the fund’s website; what
constitutes an underrepresented background or
first institutional fund is flexible. “Anybody who
believes that they are bringing something to the
ecosystem that is currently underrepresented by
the way capital has flown within venture, they
have a chance to tell us about that,” says Walk.

And while Screendoor’s partners aren’t taking

fees or carry in the fund, it’s not intended as
charity. The fund will hire a full-time analyst or
similar role to manage its portfolio and
structured training and advice offered by its
partners. And with those partners’ own LPs
backing Screendoor, everyone involved expects
a financial success. “The investors in the fund
aren’t investing out of charity, they expect
industry-beating returns here,” Patel says.

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Alex Konrad

I'm a senior editor at Forbes covering venture

capital, cloud and enterprise software out of
New York. I edit the Midas List, Midas List
Europe, Cloud 100 list and 30… Read More

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