Lightship Capital Fund: Largest-Ever VC Fund to Invest in Midwest, Minority-Led Startups

We’re proud to announce the launch of The Lightship Capital Fund: the largest-ever VC fund to invest in Midwest, minority-led startups. It is also the largest initial fund run by a Black woman.

June 26, 2020

Today, just 1% of VC-backed founders are Black. For far too long, implicit bias and systemic racism have created startling inequities in the VC and startup world—favoring white, male founders, and leaving behind so many other brilliant minds and ideas. Today, alongside our partners Candice Matthews Brackeen and Brian Brackeen of Lightship Capital, we take the first step to combat this injustice with the launch of the Lightship Capital Fund. 

The Lightship Capital Fund will be the largest-ever VC fund to invest in Midwest, minority-led startups. It will also be the largest initial VC fund run by a Black woman to date. The fund will focus on investing in underrepresented minorities: BIPOC (Black, Indigenous and People of Color), LGBTQ+, and people with disabilities. Entrepreneurs operating in regions like the Midwest are often overlooked for meaningful capital and support. Aggressively working to close these funding gaps will create the opportunity to both reconcile and profit from a trillion-dollar marketplace failure. 

“The Lightship Capital Fund has the potential to be one of the greatest economic opportunities of this generation, as systemic racism has led to the majority of VC investment being allocated to white male founders, ” said SecondMuse Founder and Co-CEO Todd Khozein. “By investing in remarkable underrepresented founders in the Midwest, where the least VC competition exists and the best exit outcomes are yielded, Lightship Capital has identified the formula for a highly impactful, highly profitable venture fund.”

This is a $50 million fund, which is closing $20M from SecondMuse Capital with another close in August. The fund will invest in ventures in five sectors: artificial intelligence (AI), consumer packaged goods (CPG), sustainability, e-commerce, and healthcare. All ventures will be based or have a presence in the middle of America, which includes any location outside of the three most overserved regions in the United States: Silicon Valley, New York City, and Boston. 

Candice Matthews Brackeen, Founder and Managing Partner of Lightship Capital best summed up why tackling this issue head-on isn’t only the right thing to do, it’s also good for our industry:“The venture capital market has failed BIPOC, and ultimately, itself. There are incredible deals that are being overlooked, and all VCs who aren’t intentionally diversifying their portfolio who aren’t exploring deals in every community,  are just not going to see outsized returns,” said Lightship Capital General Partner Candice Matthews Brackeen. “We’re proud to partner with SecondMuse, whose decade of experience in building resilient and inclusive economies will help de-risk the fund and set the backed ventures up for long-term success.”

“Sometimes the events and special people all come together at a pivotal moment, the most opportune time, to make change. This is a time of great change, and yet it offers an opportunity to change how we select and fund the CEO’s and companies of the future,” said Lightship Capital General Partner, Brian Brackeen. “With this $20 million commitment to our fund, SecondMuse is creating an equitable future for us all. If we are right, our returns will show the world that these founders in the Midwest can’t be ignored.”

Both SecondMuse Capital and Lightship Capital are General Partners in the fund.SecondMuse Capital is the financial management arm of SecondMuse, investing in businesses and real estate that help create new economies that are growing, resilient, and inclusive. Based on a decade of experience in building economies and supporting entrepreneurs around the world, SecondMuse Capital strategically influences and deploys capital.  Lightship Capital, led by two Black investors, has a track record in backing an unusually high number of successful ventures.  

Our hope for the fund is to make the VC world accessible to all founders and to provide much-needed funding that allows minority-founded startups not only to survive, but to thrive, and to create a more equitable future.

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