Fairview Capital’s 2020 Market Review of Woman and Minority-Owned Private Equity and Venture Capital Firms

January 1, 2021/in Study Human Capital, Research Reading

This 2020 report by Fairview Capital examines the state of woman and minority-owned private equity and venture capital firms.

The following report shares key trends and data observed by Fairview in 2020.

The universe of woman and minority-owned firms now totals over 500 and continues to grow rapidly
New firms are raising smaller pools of capital and first-time funds represent a larger proportion of the opportunity set than ever before
New firm formation activity is most significant in venture capital, a segment of private equity that has proven highly resilient
Diverse managers continue to feature a natural diverse multiplier effect at the portfolio company level, while at the same time, firms explicitly targeting woman and minority entrepreneurs are at an all-time high
The need for intentionality and genuine programmatic approaches to backing woman and minority-owned firms is at peak levels

Why is advancing the next era of venture capital important?

Venture capital is an American national treasure. It has fueled the advancement of innovation, economies, and people. It has created value, jobs, wealth, and life-changing products and services. Though venture capital as an industry may be young and as an asset class may be small, high-growth startups and their long-term investors have truly changed the world.

To continue the success of the industry’s past 50 years to the next 50 years and beyond, we must expand opportunities for people of all backgrounds to access the venture ecosystem and thrive. We must educate future leaders on best practices and help them learn from the industry’s rich history. We must help firms build strong, healthy cultures and values. We must keep the public and ecosystem informed through qualitative and quantitative insights.

By investing in tomorrow’s leaders today, we shape the next era of venture capital.

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10,000+

high-growth startups—across all 50 states and DC—raised venture funding in 2019 to build and grow their businesses.

42%

of all U.S. IPOs from 1974 to 2015 were venture-backed companies, representing 63% of the market capitalization and 85% of R&D.

2.9 million

is the average net jobs created annually between 1980 and 2010 by high-growth startups, which account for ~50% of gross jobs created in the U.S.

1,300+

U.S. venture firms are active today, managing an aggregate of $444 billion in assets.