There’s about to be an influx of available funding for Black, Brown, and Women-led startups in Minnesota. gener8tor, GREATER MSP, and a trio of anchor investors — Allianz Life Insurance Company of North America, Allina Health, and Xcel Energy — have announced the launch of the MSP Equity Fund.
Members from each of the main organizations (partners in the Forge North startup coalition) officially announced the MSP Equity Fund during a press conference earlier this morning. The new $50 million-targeted fund was described as the first of its kind in the country — a fund of funds designed to invest around race, place, and gender — and will initially be bolstered by a $10 million investment by Allianz. The other two anchor investors, Xcel Energy and Allina Health, have also committed “seven figure” amounts, but specific financial details weren’t announced. The MSP Equity Fund will invest in 10 or more funds that will in turn commit to a dollar-for-dollar investment into Black, Brown, and Women-led businesses in Minnesota or businesses willing to move to Minnesota.
No announcements were made as to what VC funds would be receiving funding, but representatives did say that early talks had been conducted with funds that have “strong cultural fit” from a diversity of sectors. The group also said funds with a “strong track record of return” would be a focus.
To learn more about the MSP Equity Fund, read the release below.
MINNEAPOLIS-SAINT PAUL, MN. – As part of ongoing efforts to close equity gaps for Black, Brown and Women entrepreneurs, partners in the Forge North startup coalition announced today the launch of the MSP Equity Fund – a $50 million venture capital fund of funds powered by gener8tor and GREATER MSP and anchored by major investments from Allianz Life Insurance Company of North America, Allina Health, and Xcel Energy.
The MSP Equity Fund is the first known venture capital fund of funds in the country designed to invest across race, place, and gender. The fund will invest in 10 or more different venture capital fund managers – backing local funds and attracting new funds to Minnesota. In turn, these funds will commit to investments in Minnesota startups led by Black, Brown, and Women entrepreneurs across industries.
“We believe the MSP Equity Fund will serve as a game changer for our state,” said Al Cornish, General Partner of the MSP Equity Fund. “Our founding investors are helping position Minneapolis-Saint Paul as the epicenter of venture capital and startup resources for Black, Brown, and Women founders. We invite others to join us.”
The MSP Equity Fund advances all three economic development goals set by Forge North, a regional coalition of more than 100 startups, investment firms, accelerators, corporations, and others. It advances racial equity, increases early-stage venture capital, and will generate stronger partnerships between Minnesota-based corporations and startups.
“Our vision for the Greater Minneapolis-Saint Paul region is to lead the world in inclusive economic growth,” said Peter Frosch, CEO of the GREATER MSP Partnership. “Venture capital is a key driver for job creation and business growth, and this fund represents a major step forward.”
Venture capital funds provide critical early investment for the most high-growth companies across the country. While U.S. venture capital investment reached a watershed level of $300 billion in 2021, just 1.2% of U.S. funding went to Black entrepreneurs, according to Pitchbook. Latino entrepreneurs received only 2.1% of funding in 2021, according to Crunchbase. Women entrepreneurs received only 2% of venture capital investment, according to Pitchbook. Similar performance within Minnesota constrains economic growth, limiting job creation and wealth building for Black, Brown and Women entrepreneurs.
“Our balance sheets should reflect the demographics of the communities we serve,” said Troy Vosseller, Co-Founder of gener8tor. “The MSP Equity Fund seeks to produce best-in-class financial returns by investing in a diversified pool of venture capital funds while helping to provide more equitable access to capital for Black, Brown and Women-led startups in Minnesota. I applaud Allianz Life, Allina, and Xcel Energy for walking the walk as it relates to diversity, equity and inclusion.”
“We recognize the importance of entrepreneurs and startups within our local community and see them as an important contributor to driving innovation, as well as in supporting job growth and attracting talent within our community,” said Jasmine Jirele, President and CEO, Allianz Life. “This is just one of the ways Allianz Life is committing to building a more equitable Minnesota.”
“Building an equitable and diverse business climate is essential for our region to thrive. It benefits all companies and communities when we lay the groundwork to foster innovation and job growth in Minnesota.” said Bob Frenzel, Chairman, President, and CEO, Xcel Energy. “We’re pleased to support the MSP Equity Fund that will build a stronger economy where all are able to grow and succeed.”
Additional institutions are expected to join as investors in the coming months with the fund closing later this year.
The MSP Equity Fund is part of a larger portfolio of work to address systemic issues for entrepreneurs in Minnesota. Additional Forge North coalition projects focus on angel investments, corporate partnerships, and support for startup incubators and accelerators. Organizations like gener8tor are advancing new solutions, such as the gBETA Medtech accelerator with cohorts focused exclusively on Black founders.
To learn more about the MSP Equity Fund, visit www.mspequityfund.com.