Money Moves September 14, 2022 at 11:54 am

All There Is to Know about Cornerstone VC, the Black-led Company Backing Emerging Firms

Abu Mubarik September 14, 2022 at 11:54 am

September 14, 2022 at 11:54 am | Money Moves

Photo credit: sifted

Cornerstone VC is a black-led diversity investment firm co-founded by Rodney Appiah and his brothers. The company was born out of a Black-led investment company, investor group, which he co-founded in 2016.

Appiah manages the business with his two partners; his brother Edwin Appiah and Wilfred Fianko. The focus of the company is to back diverse founders. It backs founders from the black community and also prides itself on backing founders from underrepresented sectors, with the aim of addressing the unequal societal dynamics at play in VC and business, according to Sifted.

Through Cornerstone, Rodney wants to establish a leading VC company that will invest in diverse startups that unlock outperformance and deliver returns to investors. It will address the equity funding gap among entrepreneurs that are often overlooked. In doing so, it will target management teams with inherent (age, ethnicity, gender — with a focus on ethnicity for now) and acquired (education, languages spoken).

Recently, Cornerstone raised a $21 million fund to support black entrepreneurs and innovators that are underrepresented and startups led by diverse teams. The funding round was backed by Series A+ VC firm Atomico, according to EU startups.

The London-based company will invest between $250k-1 million in pre-seed and seed-stage tech startups. The company also plans to support 40 companies and allocate 40% of its money to follow-on investments. Also, Cornerstone’s angel network will receive a share of the fund’s profits via carrying participation.

“The team has committed to making sure 30% of its dealflow comes from outside of London and is already averaging 29.2% from a standing start,” Appiah said in a statement quoted by sifted. In the last three years, the firm has invested more than $1.3 million into over 20 companies.

Last year, Cornerstone in a research examined the state of venture capital for diverse founders and noted that only 1% of founders that receive seed funding identify as back, and only 3% of VC-funded founders identify as Black.

The statement further noted that of the 1 percent, only 75% of founders come from advantaged socioeconomic backgrounds, and hardly any founders come from families living on welfare entitlements.

“We are on a mission to put teams at the heart of our investment approach, believing diversity is key to driving outperformance. 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,” he said.

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