Exclusive: Primary Venture Partners Launches Its DEI-Focused Factor Fellowship

At least, that seems to be true from my point of view: I definitely get less DEI talk than I used to, and of course it doesn’t “come up” as often. At the same time and more broadly, there is growing conservative resistance to DEI as some states ban DEI initiatives. While the conversation about DEI may be politicized, the data certainly shows that there is a lack of diversity in the business world, especially in the technology sector.

There are all kinds of data to swim in. On the VC side, for example, only about 17% of decision makers are women, according to PitchBook data. On the startup side, nearly 80% of funding and about 75% of deals went to all-male founding teams, according to 2023 PitchBook data. In 2023, venture capital dollars for Black founders reached $705 million, the first time since 2016 that figure did not reach $1 billion per Crunchbase. If you ask McKinsey, the way to make startups and enterprises more diverse comes down to a “systematic, business-led approach.”

That’s the kind of thinking Primary Venture Partners appears to be considering, as the New York-based firm is now launching its new Factor Fellowship, along with several other New York-based venture firms. Fortune only learned. The Factor Fellowship is not housed under Primary, but under a new non-profit organization called Factor. It is a program designed to connect diverse early-career professionals with New York startups so they can gain important operational experience. Factor is also backed by AlleyCorp, Harlem Capital, Zeal Capital and the New York City Economic Development Corporation’s Venture Access Alliance.

“There’s just no two ways about it,” says Primary partner and CEO-in-Residence Lisa Lewin. “A business is incredibly exciting, but it has very high walls, both on the side of the operator and on the side of the investor.”

The fellowship is looking for people who have already worked in areas that are transferable to a startup, such as sales, operations and product. The program then guides fellows through what it takes to work (and win) at a startup, organizing events and mentorship opportunities.

“Our sweet spot includes people from underrepresented backgrounds,” says Lewin. “They’ve been out of college for about three to 10 years and have shown incredible skills, but they haven’t really had their first shot at a specific venture-backed startup yet.”

Primary partner Cassie Young said the goal is to “find the people who may not have been able to find their way into that startup ecosystem in the first place.” The program’s focus on finding talented operators also reflects Primary’s beliefs about what it takes to create good VCs.

“The best way to build the venture pipeline is to go direct, or get great operators into the startup ecosystem,” Young said.

Elsewhere in New York, AlleyCorp is teaming up with Management Leadership for Tomorrow to launch Peerless, a pitch competition aimed at underrepresented founders. The prize at the end? A million dollars.

“We really wanted to give these founders the power to say, ‘Take this risk,’” says Desiree Almodovar, operator-in-residence at AlleyCorp and who helped found Peerless, which will hold its first competition on June 20 .

“I think a lot of underrepresented founders right now – because of the (general) environment and the VC environment of the moment – ​​are feeling very disillusioned and feeling like ‘everyone’s turning their backs on us,’” says Almodovar.

That begs the question: what does it actually mean for these programs to be sustainable and ultimately successful? Lewin is direct: “Success is measured by the number of fellows who get their first job within six months of completing the program.” According to Almodovar, “success looks like putting more underrepresented founders in front of investors writing checks… and actually creating innovation,” she said.

We don’t talk about DEI as much as we used to. But if something was important before on principle, isn’t it always important? Yes, but you can only do something about it if people keep talking about it and taking action.

“We will not be silenced,” Almodovar said. “We’re not going to let you say this isn’t important, and we’re going to say again that this is really important.”

See you tomorrow,

Allie Garfinkle
Twitter: @agarfinks
E-mail: [email protected]
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Joe Abrams curated the deals section of today’s newsletter.

VENTURE OFFERS

– Magnus Metala Tel Aviv, Israel-based developer of a digital metal alloy casting system has raised $74 million in Series B funding. Entrance capital And Target worldwide led the round and was joined by Caterpillar Companies, Tal Ventures, Deep Insight Companies, Awz companies, Lumir Venturesand others.

– VulnChecka Boston, Massachusetts-based cybersecurity company has raised $8 million in seed funding Sorenson Capital and others.

– Auxa Healtha New York City-based AI-powered benefit navigation platform, has raised $5.2 million in seed funding. Zeal Capital Partners led the round and was joined by an existing investor AlleyCorp and new investor K50 companies, Laconia Capital GroupAnd Chaac Ventures.

– Langdoka Berlin, Germany-based AI platform designed to improve employee productivity while protecting corporate data has raised $3 million in seed funding. General catalyst And La Famiglia led the round and was joined by Y-combinator and others.

PRIVATE ASSETS

– Proemionsupported by Battery companiesagreed to acquire Trendminera Hasselt, Belgium-based industrial analytics company, for €47 million ($50 million).

– ABOUT Healthcaresupported by Rubicon Technology Partnerspurchased Sharpness, a Tampa, Florida-based AI-powered operations management platform for healthcare systems. Financial terms were not disclosed.

OTHER

– Knorr-Bremse agreed to take over the North American conventional railway signaling business Alstoma Saint-Ouen-sur-Seine, France-based developer of rail transportation equipment and services, for approximately €630 million ($671 million).

FUNDS + FUNDS OF FUNDS

– GEF Capital Partnersa Washington, DC-based private equity fund, has raised $325 million for its second fund focused on companies providing solutions to climate change and pollution.

PEOPLE

– a16za Menlo Park, California-based venture capital firm Jennifer Li as general partner.

– Vibrant businessesa Chicago, Illinois-based venture capital firm Alex Behar as lead investor. He used to be there Cultivation sandbox.

– RTX Companiesthe Arlington, Virginia-based corporate venture capital arm of RTX Shalei Holway as head of portfolio development. Previously, she served as a Senior Advisor to the Biden Administration Small Business Administration’s Small Business Investment Company program.