Bringing a racial and ethnic equity lens to your gender lens investing

suzanne biegel
5 min readSep 28, 2020

At the beginning of the northern hemisphere summer, as people took to the streets around the world for Black Lives Matter, my phone began to ring off the hook with investors wanting to know how they could invest more intentionally with an eye to both gender, and racial and ethnic diversity and equity.

The last few months have been a time of reckoning for so many industries and sectors, and gender lens investing is no exception. Our field is grounded in principles of equity and justice. But too often in our fight to make sure that women are seen and included across the investment chain, we have failed to pay sufficient attention to other forms of diversity, be they racial and ethnic equity amongst women, or even diversity of gender identity and expression.

These questions aren’t just moral imperatives, they are economic imperatives, too. It is well known that Black and Latinx women are two of the fastest growing groups of business owners in the US. Yet according to Goldman Sachs, just 1% of all venture funding goes to Black and Latinx-led startups (of any gender), and only 3% of all venture funding goes to startups led by women (of any race or ethnicity). Indigenous women face even greater barriers when it comes to access to capital and financing. What ideas, insights, and innovations are investors missing out on by not investing in these founders?

Meanwhile in Africa, annual consumer spending is projected to reach US$2.1 trillion by 2025. What collective intelligence are investors missing out on if we don’t invest in the entrepreneurs and innovators with the deepest knowledge of those markets?

Investing with an eye to racial and ethnic diversity looks different depending on where in the world you are investing. In the UK or Canada, it will likely include investing in Black, brown, and indigenous entrepreneurs. In Africa, it will mean investing in local talent and learning from their insights into their local markets. In India, it might mean looking at class, caste, and cultural heritage.

The good news is that for investors who want to move their capital with a dual lens of gender and racial/ethnic equity, there is plenty available to invest in.

The latest edition of Project Sage, Catalyst at Large and Wharton Social Impact Initiative’s annual scan of private markets gender lens funds, found that 34 of the 138 gender lens funds in the scan also employ a racial and ethnic diversity lens. These funds cross all asset classes, including venture capital, private equity, and private debt. There are also a number of other excellent funds that we did not capture in the study, for a variety of reasons.

This isn’t the first time that Project Sage has taken notice of these funds — in 2019, we noted the rise of the intersectional venture fund. But their numbers are growing, with both more gender lens funds sharpening their focus on racial and ethnic diversity, and more funds choosing to be explicit about their dual focus.

Just as the funds in Project Sage 3.0 apply their gender lens in different ways, those that employ both a gender and a racial/ethnic diversity lens use varied criteria to evaluate investments. Some focus explicitly on Black and brown entrepreneurs, while others invest in male-led and white-led businesses if they believe there will be a positive impact through the company’s employees, value chains, or customers. For some, it’s about who is managing or otherwise leading the fund, including who is on the investment committee. For others, it’s about intentionally building a diverse ecosystem around the funds — through partners, advisors, and deal flow.

Questions you might want to ask when evaluating whether a fund is a good fit for you include:

  • Is it important to you that the businesses being invested in are woman-led? Some of the funds in Project Sage 3.0 invest in male-led businesses, if those businesses have a positive impact on racial or gender equality through their products, employment practices, supply chains, or some other criteria.
  • Do you want to invest your capital specifically in funds led by Black, brown, or indigenous women fund managers, or are you willing to invest in funds led by men or white people if there is an inclusive extended team (eg staff, advisors, investment committee) and capital is invested with a racial and ethnic diversity lens?
  • Can you use your leverage as an investor to influence funds managed by men or white people to invest more in Black, brown, and indigenous women entrepreneurs, and to build more diverse leadership teams?
  • Where does power sit in the relationship between the investors, the fund manager, and the entrepreneurs? How is the funding run? What kind of capital are they offering? How are they finding deal flow? Are those deals making it through the investment committee?

Some of the most exciting work happening at this intersection right now is amongst fund managers who are not just looking to invest in Black and brown entrepreneurs, but who are also paying close attention to what kind of capital is needed to support Black- and brown-owned businesses to grow, such as revenue-based funding or flexible debt. This is not to say that all founders need alternative financing, because we’ve all seen examples where conventional venture capital and private equity is a perfectly good tool. But the statistics tell us that there are more businesses founded and led by Black and brown founders where traditional VC/PE structures are not appropriate.

These fund managers aren’t just making bold investments. They’re building infrastructure and ecosystems that connect investors, entrepreneurs, partners, and prospective clients in new ways. They are unlocking talent and ideas that have been undervalued and under-supported for generations. And they are helping to ensure that when we work to build a world that is more equitable to women, we are building one that is more equitable to all people of all genders, races, and ethnicities.

If you’re committed to looking more broadly at both gender and racial/ethnic diversity in your investing, Project Sage is one good resource that demonstrates the opportunities to invest in line with your values. Because so many of the funds in the scan use both lenses, I’ve chosen not to name individual funds in this article, but you can find which funds employ a racial/ethnic diversity lens in the tables from page 40 onwards. You can download Project Sage 3.0 here.

Of course, the facts and stats only tell part of the story. I wish I could tell the stories I get to hear, talking to all of these remarkable fund managers. They are so dynamic, doing such innovative things, and really spotting market opportunities and backing visionary businesses.

I encourage you to go look at the websites of the funds in our scan that interest you, and learn more about their stories and the entrepreneurs and businesses they are investing in. And, perhaps, to invest in them.



suzanne biegel

Catalyst at Large and Co-Founder, GenderSmart, investor, change maker, movement building leader., @zanne2,