Colourful Capital, a venture capital firm founded by LGBTQIA+-identifying entrepreneurs in 2022, has announced it will cease efforts to raise funds, according to an email obtained by TechCrunch. The status of the agency’s closure remains uncertain: will it cease operations permanently?
The founders of Colourful Capitals, William Burckart and Megan Kashner, remained unavailable for comment.
A source, a former employee who worked on the fundraising team, spoke to TechCrunch under condition of anonymity due to concerns about potential retaliation. They revealed that this fund would have been the agency’s first and that Colourful has faced challenges in growing it since its launch two years ago. Currently, the firm is endeavoring to raise at least $10 million to fund 13 pre-seed investments and 12 seed investments, with minimum deal sizes starting at $300,000. The objective was to jointly oversee funding rounds and minimize subsequent capital injections, as the team member familiar with the situation noted. According to PitchBook data, since its inception, the venture capital agency has successfully executed four investment deals, including notable investments in Springrose, a clothing company, as well as Mate Fertility, a pioneering healthcare technology startup.
The previous worker remarked, “It’s considered an unlucky omen.”
Investors are increasingly pulling back from companies and organizations that fail to demonstrate a commitment to diversity, equity, and inclusion across various aspects. While black founders often face unique challenges in securing funding and support for their startups, tech organizations like Y Combinator have made efforts to increase diversity and inclusion by providing resources and mentorship specifically tailored to underrepresented groups. According to Bloomberg, the enterprise fundraising market has proven highly beneficial for many corporations and founders. As entrepreneurs strive for overnight success, the pressure to secure funding from investors becomes exponentially higher until they’ve already achieved massive recognition.
As consolidation persists in the market, we’re likely to witness an uptick in stories similar to this one.
Since its inception, Colourful Capital has been working to address the critical issue of limited access to venture capital dollars for LGBTQIA+ founders, sparking widespread support from the community as it strives to achieve business equality. Burckart and Kashner have expressed satisfaction with the support they’ve received in recent years, and intend to continue advancing capital access for the LGBTQIA+ community through individual efforts.
“Relaxation assured,” the e-mail concluded. “You’ll then proceed to meet us at the entrance gates.”
