Cincinnati-based venture capital firm Lightship Capital and general partner SecondMuse announced the launch of the largest-ever venture capital fund dedicated to investing in Midwest, minority-led startups. Lightship looks to invest in entrepreneurs that the market often overlooks or excludes, including people of color, women, members of the LGBTQIAP community, and people with disabilities.
The new $50 million fund is dedicated to backing ventures led by BIPOC (Black, Indigenous and People of Color), the LGBTQ+ community, and people with disabilities. The fund is closing $20M from SecondMuse Capital with another close in August. It 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, a General Partner at Lightship will run the fund, making it the largest initial fund run by a Black woman to date. According to Lightship, with only a handful of the thousands of existing venture capital firms led by women of color, this new fund represents the largest in history dedicated to funding ventures founded by underrepresented minorities operating in the Midwest.
“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. 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.”
Commenting on the launch of the new fund, SecondMuse Founder and Co-CEO Todd Khozein said:
“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. 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.”
Lightship Capital and SecondMuse Capital stated that they believe that their respective expertise and experience will ensure that the fund and its backed ventures will achieve unprecedented success. Lightship Capital, led by two Black investors, has a track record in backing an unusually high number of successful ventures.
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.