Last Friday, the financial industry was stunned by the news that Silicon Valley Bank (SVB) had been closed down. It is the largest bank failure since Washington Mutual collapsed ten years ago, and the bank was the sixteenth largest lender in the United States.
SVB played a key role in amplifying the needs of diverse founders. The collapsed bank catered to a particular crowd of startups, venture capitalists (VCs), and tech firms.
Amid chaos and discussions about the possible upheaval that would come with the failure of Silicon Valley Bank, Ada Ventures, an early-stage venture capital firm, has some positive developments to report.
Launches operator angel programme
Ada Ventures announced that it has launched its second operator angel programme backing 20 angel investors from minority backgrounds, across seven UK regions, with up to £50,000 to invest.
Ada Ventures says the angels were selected through an open application process and scored blindly to reduce bias.
“Our second cohort is one of the most diverse angel programmes in any European or UK fund,” says Check Warner MBE, Founding Partner at Ada Ventures. “It is 65% female, 20% Black, 20% Asian, 15% LGBTQ+, and 10% have a disability. We will only solve the hardest problems we face with talent from different backgrounds and with different lived experiences.”
The second program is specifically aimed at supporting tech hubs in seven important regions across all four nations in the UK. Warner hopes that in the upcoming 2023 Budget, there will be comparable initiatives to support tech hubs located outside of London.
“To ensure that the regions have better funding and infrastructure for growth and that diverse founding teams have fair access to capital to scale their businesses. I’d also like to see R&D tax credits retained and a clearer visa system to encourage tech workers to come to the UK,” Warner says.
Attractive profit-sharing system
Ada Ventures plans to motivate angel investors with an attractive profit-sharing system that involves offering them the entire carried interest from the angel investments they make, along with an extra 10% of the carried interest from Ada Ventures’ fund, if the firm decides to invest in their angel investment.
Izzy Obeng, Forbes 30 under 30 recipient, and founder of Foundervine, a social enterprise that supports diverse tech founders, is one of the 20 Angels in the new programme. “As someone with lived experience of the challenges that ethnicity, economic background, gender, and place have on entrepreneurial opportunities, I know first-hand the impact it can have when investment decisions are more objective, transparent, and fair,” says Obeng .
Five times bigger
The VC claims that the new programme is four times bigger than the first cohort of five Angels in 2020.
Co-founder of Open Bionics, a bionics company developing affordable prosthetics for children, Samantha Joanne Payne MBE is also part of the cohort. “There is a massive amount of economic growth to be unlocked by increasing access to underrepresented founders across the regions of the nations of the UK that most London-based VCs would only dare to look at, much less do something about,” says Bristol-based Payne. “I can’t wait to start writing angel cheques with Ada Ventures’ money and my own across the South West.”
Arfah Farooq, Co-Founder of Muslamic Makers, Community Manager at Impact VC for Big Society Capital, Ada’s Angel First Cohort said: “Ada Angels catapulted me into a world that I could never imagine myself in, and by being given capital to deploy meant I was able to find incredible founders from underrepresented backgrounds to back who statistically struggle the most to get funding. I’m proud that my whole portfolio has founders from an ethnic background.”
She added, “Although the capital has come to an end and the programme, it triggered a huge interest for me in the venture sector that now I’m working in as a community manager at Big Society Capital managing a community of VCs interested in impact. I feel so fortunate to have been given this opportunity, I can’t wait to see how the start-ups develop and regardless of what happens with the startups, this was a massive life-changing opportunity for me.”
Matt Penneycard, Co-founder and Partner at Ada Ventures, said: “The pace at which the first cohort came together across DD and co-investment was unexpected. Community-driven collaboration was a big win for the angels and the companies they invested in. It was meaningful learning we baked into this new cohort’s design by including more tools and group communications to encourage this collaborative behaviour.”
