Cornerstone VC has reached the first close of its £20m fund to invest in UK tech startup founders from diverse backgrounds.
Founded from the angel group Cornerstone Partners, the venture capital firm will focus on early-stage startups, providing seed and pre-seed funding. The fund will initially invest in sums of between £250,000 and £1m.
Cornerstone VC’s goal for the diverse fund is to invest in up to 40 companies, many of which will be based outside London to ensure funding goes beyond the UK capital.
The fund is looking to address the funding equity gap that sees founders of certain genders, ages, and ethnicities at a disadvantage when it comes to securing investments.
‘People first, software second’
“We are on a mission to put teams at the heart of our investment approach, believing diversity is key to driving outperformance,” said Cornerstone’s managing partner Rodney Appiah.
“We are looking for businesses that are intentional about team composition, can excel in high-growth environments and are truly obsessive about execution. People first, software second.”
Appiah said that the team meets more than 500 diverse founder-led businesses a year. He said the company’s data has found a “growing pipeline of high growth, innovation-led, investment opportunities led by diverse founders, particularly at pre-seed and seed stage requiring further institutional investment.”
The £20m cash injection raised for the fund was led by BGF, along with the Hg Foundation, a charity trying to remove barriers for disadvantaged people getting into tech.
“BGF is actively committed to supporting a targeted range of activities where the objective is to make a real and meaningful difference to broader representation in the investment and entrepreneurial communities,” said BGF executive chair Stephen Welton.
“We are very encouraged that the work we have done supporting female entrepreneurs has resulted in us being the most active investor in women-led scaleups in the country.”
More than half of the companies funded by Google for Startups’ most recent Black Founders Fund were from the UK in a sign of the strong diverse tech talent available in Britain.