General Mills is investing $15 million in two venture-capital funds aimed at boosting financial backing for women and people of color in the food business.
A small percentage of venture-capital funding goes to companies with founders who are female, especially women of color. With that disparity in mind, the Golden Valley-based company's own venture-capital arm, 301 Inc., announced the investment in Fearless Fund and Supply Change Capital on Wednesday.
"We experience firsthand the expertise and passion of the diverse and female founders within our 301 Inc. portfolio, and yet there is a systemic gap for minority food entrepreneurs looking for early-stage venture-capital funding," Doug Martin, General Mills' chief brand and disruptive growth officer, said in a news release.
Just 2% of venture-capital funding last year went to companies founded by women, according to PitchBook. A Harvard study found "women make up approximately 11% of investing partners at VC firms, and only around 13% of venture-capital dollars go to startups with a woman on the founding team."
A Crunchbase report found 2.4% of venture-capital funds went to Black and Latino founders between 2015 and 2020.
"Venture capitalists play a critical gatekeeping role in deciding whose ideas, products and innovations get a chance to shape our modern economy and society," the Harvard report said.
Johnny Tran, senior business development manager at 301 Inc., said it was important to invest in venture funds rather than directly in startups to have the biggest impact.
"Our expertise in scaling businesses is often not the perfect fit for early-stage founders who are still validating concepts and laying their foundations," Tran said. "By creating an ecosystem of complementary partners, like these two funds, we can start to close that opportunity gap, reach a wider network of entrepreneurs across geographies and build deeper connections than we could on our own."
Fearless Fund and Supply Change Capital are both run by women and will use the 301 Inc. investment to support founders from underrepresented groups.
Fearless Fund focuses on early-stage funding for businesses led by women of color. Its food investments include a vegan burger chain and a business pioneering cultured meat alternatives.
"Access to capital is one of the most prominent hurdles to women of color reaching their potential as founders, despite having an excellent track record in building successful businesses built on great ideas," Arian Simone, general partner and co-founder of Fearless Fund, said in a statement.
Supply Change Capital invests in "diverse founders across the supply chain in technology, sustainable ingredients and high-integrity brands."
"As the multicultural consumer population in the U.S. grows, we are focused on unlocking change in the venture ecosystem to infuse women and people of color with the capital they need to shape our future food landscape," Noramay Cadena, co-founder and managing partner of Supply Change Capital, said in a news release.
301 Inc. says 80% of its investments since June have gone to female- and minority-led startups in the past year. Those include PetPlate, Everything Legendary and GrubMarket.
Martin, who took over the reorganized innovation team at General Mills in December, said closing the racial and gender funding gap "means more great innovation in our food system — from new concepts to emerging food technologies — and more inclusive cycles of opportunity for entrepreneurs, companies and communities."