Sixty8 Capital holds first close of USD20m fund to support diverse founders
Sixty8 Capital, an Indianapolis-based, seed-stage venture capital (VC) firm supporting Black, Latinx, women and LGBTQ+ led startups, has held the first close of its new USD20 million venture fund.
Investors include The Indiana Next Level Fund, 50 South Capital, Bank of America, Eli Lilly and Company, First Internet Bank and the Central Indiana Community Foundation. Led by Managing Director Kelli Jones, Sixty8 Capital is industry-agnostic and will focus initially on seed investments between the coasts, with an emphasis on the Midwest. Sixty8 Capital is powered by Allos Ventures, one of Indiana's most active VC firms, with Allos' Paul Ehlinger serving as venture partner.
Sixty8 Capital will seek to invest in 25 to 30 pre-seed and seed-stage companies with initial equity cheques of USD250,000 to USD500,000 per company, reserving additional funds for follow-on rounds. Investment will focus on undercapitalised founders and innovators who too often miss out on critical funding, since 90 per cent of venture capital goes to people who look like and live near investors. The firm's investment thesis focuses on uncovering potential among diverse founders whose access to capital is limited by race, gender, sexual orientation or proximity.
"We believe there is an opportunity to truly level the playing field when it comes to capital access for diverse founders in any industry, said Kelli Jones, Sixty8 Capital's managing director and the first-ever Black, female VC in the state of Indiana. "There is a USD4 trillion missed opportunity when we don't put a focus on diverse founders. Venture capital has a significant opportunity to change the trajectory of SMBs and micro-enterprises by helping them build products and services that utilise tech and have the opportunity to scale."
Opportunities for such investments are readily apparent. Black founders are at the helm of just 1 per cent of venture capital-funded startups, and startups with all-female founding teams saw a declining share of all VC dollars invested last year with just 2.4 per cent. Sixty8 Capital has already identified one of its first investments: Qualifi, an Indianapolis-based SaaS platform that helps recruiters improve their hiring efficiency and effectiveness.
"Sixty8 Capital's support goes beyond the investment. The team will play an active role in advancing management teams, optimising marketing and sales, and assisting with acquisitions, as well as strategising for a potential exit," says Darrian Mikell, Qualifi's chief executive officer and co-founder. "We're similarly aligned in terms of the impact we want to have on the world. Being able to collaborate with them on strategy and leverage their decades of experience is invaluable. Kelli, specifically, has been a champion for Qualifi since the very beginning. She always made us feel confident that we would succeed. Having Sixty8 Capital as an investor is a signal to the broader VC community that Qualifi is a startup worth watching."
Indianapolis-based pharmaceutical company Eli Lilly and Company sees its investment in Sixty8 Capital as an ideal fit for Lilly's Racial Justice Initiative, which focuses on several areas of impact including healthcare access, supplier diversity and jobs within the communities in which Lilly operates.
"We are excited to support Sixty8 Capital on its mission to uplift underrepresented founders and innovators," says Philip Johnson, senior vice president and treasurer, Eli Lilly and Company. "Diverse and historically underrepresented founders struggle to obtain capital to form and build their businesses. Lilly's investment in Sixty8 Capital is representative of our broader efforts to use our financial and human capital to create lasting change that makes life better for people in the communities we serve."
According to Jones, Sixty8 Capital's managing director, founder outreach is an essential part of the fund's strategy.
"We have to help lift the veil on how these founders can connect with VCs," she says. "Even if we don't invest now, we can still listen. We can give them feedback on their pitch. Some of them have been bootstrapping for two or three years, trying to start a company while working full-time jobs. Some of them are even turning a profit. Maybe they're not quite ready to fundraise, but we can help them get there. Or maybe now is the right time for Sixty8 Capital to invest, and that founder will have the chance to show everyone how far they can take their idea, regardless of whether it's in SaaS, media, CPG, or ecommerce. We want to find the diverse founders that traditional VCs are overlooking."
Sixty8 Capital's name stems from the generational, class and political events of 1968, a watershed year in the civil rights movement. Digital product agency Innovatemap convened a team of diverse thoughts and minds, including Tyler Hill, Head of Design at Pattern89, to create Sixty8 Capital's brand identity.