Colorful Capital, which launched in 2022 to focus on investing in LGBTQIA+-identifying founders, will end its attempts at raising a fund, according to an email seen by TechCrunch. It’s unclear if the firm is shutting down for good.
Colorful Capital’s co-founders, William Burckart and Megan Kashner, declined to comment.
A former employee who used to work on the investment team and asked to remain anonymous for fear of retaliation told TechCrunch that this fund would have been the firm’s first and that Colorful has been struggling to raise it since it launched two years ago. At that time, it was trying to raise at least $10 million to do 13 pre-seed deals and 12 seed deals, with check sizes starting at $300,000. The idea was to co-lead deals and cut follow-on checks, too, the employee, who was familiar with the matter, said. PitchBook shows that since its launch, the firm made four investments, including into clothing company Springrose and health tech Mate Fertility.
“It’s unfortunate,” the former employee said.
This news comes amid wider investor pullback from businesses and organizations focused on some element of diversity, equity and inclusion. Black founders are seeing a dip in funding, while tech organizations like Girls in Tech and Women Who Code have had to shutter. The venture fundraising market has been tough for many firms and founders, especially emerging fund managers, Bloomberg reported. Unless one is already a big, splashy name — or raising in AI — the stakes to get money from investors and LPs have become much, much higher.
“We’re going to start seeing more stories like this as the market continues to consolidate,” the former employee said.
During its time, Colorful Capital wrote white papers about the lack of venture capital dollars flowing to LGBTQIA+ founders and garnered support from the wider community as it sought to achieve venture equity, according to the email. Burckart and Kashner wrote that they were proud of the support they’ve received in the past few years and that they would keep working on advancing capital access for the LGBTQIA+ community in individual capacities.
“Rest assured,” the email concluded. “You will continue to see us on the front lines.”