Velveteen Ventures: A New force in Midwest Venture Capital Prioritizes Purpose and Diverse Founders
A newly launched venture capital firm,Velveteen Ventures,is poised to reshape the landscape of early-stage investment,notably for founders frequently enough overlooked by traditional funding sources. Founded by Betsy Fore, a trailblazer who previously became the first Native American woman to secure a series A investment for her own company, Velveteen is focused on backing innovative companies across key sectors while concurrently addressing the significant underrepresentation of Native American and other diverse entrepreneurs in the venture ecosystem.
Addressing the Funding Gap for Underrepresented Founders
For years, data has highlighted a stark disparity in venture capital funding. According to a recent report by Crunchbase, less than 3% of all venture funding in 2023 went to founders from underrepresented ethnic backgrounds. The numbers for Native American founders are even more discouraging, often falling below measurable thresholds in standard datasets. This lack of access to capital hinders innovation and economic growth within these communities.
Fore’s personal experience navigating this challenging environment fueled her desire to create a firm that actively champions inclusivity. “Instead of limiting myself to building a single company, I realized I could amplify my impact by empowering dozens of founders with the potential to create truly transformative businesses,” Fore explained. She also runs a nonprofit dedicated to mentoring and providing opportunities for Native American entrepreneurs, recognizing that access to networks and guidance are crucial components of success.
Investment Strategy: Balancing Profit with Purpose
Velveteen Ventures is currently raising its inaugural fund and anticipates investing between $500,000 and $4 million in seed and Series A stage companies. the firm’s investment thesis centers around four core areas: healthcare, climate technology, consumer products, and community-focused ventures. This focus reflects a growing trend in venture capital towards “purpose-driven” investing, where financial returns are considered alongside positive social and environmental impact.
Rather than solely chasing the highest potential ROI,Velveteen aims to identify companies that are not only financially viable but also address critical societal challenges. For example, in the climate tech space, they might prioritize companies developing lasting agriculture solutions or innovative carbon capture technologies. In healthcare, they could focus on companies improving access to care in underserved communities.
A Midwest-Centric Approach
While many venture firms concentrate their investments on coastal hubs like Silicon Valley, Velveteen Ventures is deliberately rooted in the Midwest. Fore believes that significant opportunities exist outside of these established ecosystems, and that a regional focus allows for a deeper understanding of local market dynamics and a stronger connection to the communities they serve. This strategy aligns with a broader movement to democratize venture capital and distribute investment dollars more equitably across the country.
Fore noted the positive reception from potential investors, stating that she’s found that Limited Partners (LPs) are actively seeking out firms like Velveteen. “We’ve been fortunate to attract support from institutions that recognize the potential for strong financial returns and a positive impact in the Midwest,” she said.
The Velveteen Team and Commitment to Indigenous Communities
Velveteen Ventures boasts a diverse leadership team. Karla brollier, of Native descent from Patagonia, will spearhead the firm’s climate investments, bringing valuable expertise in sustainable technologies. Katherine Stabler, a seasoned attorney with decades of experience in private funds, joins as Chief Operating Officer, providing crucial operational and legal guidance.
Demonstrating a deep commitment to her heritage, Fore has pledged that a portion of the fund’s carried interest (a share of the profits) will be allocated to Native American tribes. This innovative approach ensures that the success of velveteen Ventures directly benefits the communities it seeks to empower.
“We’re not simply building a venture fund; we’re building a legacy,” Fore stated. “We believe that profits and purpose are not mutually exclusive – they are intrinsically linked.” Velveteen Ventures aims to prove that investing in diverse founders and purpose-driven companies can generate both ample financial returns and lasting positive change.