Black Tech Nation Ventures remains committed to its diversity thesis despite the increasing backlash against DEI initiatives

Black Tech Nation Ventures (BTNV) was established in 2021 with the mission of addressing the funding gap for Black founders in the wake of increased attention to diversity and inclusion efforts following the murder of George Floyd in 2020. Now, three years later, as backlash against diversity-focused investments grows, the firm’s mission is more pertinent than ever.

Based in Pittsburgh, BTNV has successfully raised its inaugural fund, securing $50 million to support pre-seed and seed-stage software startups led by underrepresented founders, including Black, women, LGBTQ+ individuals, and others. The firm boasts a roster of notable limited partners (LPs), including Alphabet, First National Bank, and billionaire investor Mark Cuban.

David Motley, a general partner at BTNV, described the fundraising journey as initially brisk, with the firm achieving a first close of $25 million in 2021. This success was fueled by heightened investor interest in diversity-focused funds and favorable market conditions for emerging managers. However, the latter half of the fundraising process proved challenging, as market dynamics shifted, and investor enthusiasm for diversity-focused investments waned. Despite these hurdles, BTNV persisted and ultimately achieved its $50 million target.

The journey highlights the evolving landscape of diversity investing and the ongoing challenges faced by underrepresented founders in accessing venture capital. Despite the headwinds, BTNV remains steadfast in its commitment to supporting diverse entrepreneurs and driving meaningful change in the tech ecosystem.

David Motley emphasized that there has been a noticeable pushback against diversity-focused investments, with funding for diverse founders and Black-led venture funds declining rapidly and returning to 2019 levels. This trend is not limited to the venture capital industry, as evidenced by actions such as Oklahoma’s decision to defund DEI efforts at public colleges and the Supreme Court’s ruling on affirmative action.

Venture firms like BTNV may face challenges stemming from this shift in narrative around DEI, with some encountering legal pressure from conservative activists who view diversity-focused initiatives as discriminatory. However, Motley stressed that these developments reinforce the importance of BTNV’s mission rather than deter the team.

According to Motley, the surge of support for diversity-focused VCs in 2021 and 2022 was somewhat anomalous, and the subsequent return to “normalcy” underscores the enduring structural biases in the industry. Nevertheless, he sees this as an opportunity for funds like BTNV to demonstrate the long-term value of investing in underrepresented founders.

BTNV’s investment strategy focuses on enterprise software solutions in sectors such as fintech, edtech, and clean tech, with checks ranging from $250,000 to $1 million. The firm actively seeks founders based outside the traditional coastal hubs and has made 10 investments since its first close, supporting entrepreneurs in cities like Cleveland, Indianapolis, and Atlanta.