Colorful Capital, which was founded in 2022 to invest in founders who identify as LGBTQIA+, will end its attempts to raise a fund, according to an email obtained by TechCrunch. It’s unclear if the company will close permanently.
Colorful Capital 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 company’s first and that Colorful had struggled to raise the money since it was founded two years ago. At the time, the company was trying to raise at least $10 million for 13 pre-seed deals and 12 seed deals with check sizes starting at $300,000. The idea was to co-lead deals and also write follow-on checks, said the employee familiar with the matter. PitchBook shows that the company has made four investments since its founding, including in clothing company Springrose and health technology company Mate Fertility.
“It’s unfortunate,” said the former employee.
This news comes amid a broader pullback by investors from companies and organizations focused on some level of diversity, equity and inclusion. Black founders are seeing a drop in funding, while tech organizations like Girls in Tech and Women Who Code have had to close. The venture capital funding market has been tough for many companies and founders, especially emerging fund managers, Bloomberg reported. Unless you’re already a big, flashy name — or rising in the AI space — the stakes to get money from investors and LPs have gotten much, much higher.
“We will see more stories like this as the market continues to consolidate,” the former employee said.
During his tenure, Colorful Capital authored white papers on the lack of venture capital flowing to LGBTQIA+ founders and garnered support from the broader community to reach out to venture capital, the email said. Burckart and Kashner wrote that they were proud of the support they have received over the past few years and that they would continue to work to improve capital access for the LGBTQIA+ community in an individual capacity.
“Rest assured,” the email concluded, “you will continue to see us on the front lines.”
