Cornerstone VC, a London-based venture capital fund focused on a ‘people first’ investment strategy, has launched a £20M fund.
According to the VC, the fund will focus on tech-enabled companies at the pre-seed and seed stage, typically investing initial cheques between £250K and £1M with capital reserved for follow-on funding.
The UK VC plans to invest in up to 40 companies, with a significant proportion based outside London. Further, Cornerstone’s angel network will also receive a share of the fund’s profits via carry participation.
Cornerstone VC started life as a black-led angel network founded by Edwin Appiah, Rodney Appiah, and Wilfred Fianko.
The VC’s mission is to establish a VC firm with a diversity-led investment strategy that unlocks outperformance and delivers returns for investors.
Last year, Cornerstone released a report on the state of venture capital for diverse founders: Access to Venture Capital 2021.
According to the report, only 1% of founders that receive seed funding identify as back, and only 3% of VC-funded founders identify as Black.
And of those that receive funding, three-quarters (75%) of founders come from advantaged socioeconomic backgrounds, and hardly any founders come from families living on welfare entitlements.
Rodney Appiah, the Managing Partner at Cornerstone Partners, says, “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 adds, “Contrary to perceptions around a pipeline problem, we don’t see any evidence of that. On the contrary, we meet more than 500 diverse founder-led businesses a year. Our data indicate a growing pipeline of high growth, innovation-led investment opportunities led by diverse founders, particularly at pre-seed and seed stages requiring further institutional investment.”
Stephen Welton, Executive Chair, BGF, says, “We are delighted to be backing Rodney, BGF alumni, and the team at Cornerstone VC in the launch of its ground-breaking seed-stage tech fund, which complements BGF’s established minority investment for small and mid-sized growth businesses.
“BGF is actively committed to supporting a targeted range of activities where the objective is to make a real and meaningful difference to broader representation in the investment and entrepreneurial communities. We are very encouraged that our work supporting female entrepreneurs has made us the most active investor in women-led scaleups in the country.”
Nic Humphries, Senior Partner and Executive Chairman at Hg, says, “Hg has over 20 years’ experience in partnering with and rapidly growing innovative software businesses. This experience has demonstrated that diversity in leadership often leads to better investment and business decisions. Diversity in the technology sector continues to be a priority for us, the businesses we invest in, and is also at the heart of The Hg Foundation. My colleagues and I are delighted to support the Cornerstone team, and we look forward to working together.”