Northwestern Mutual is pledging to invest $20 million in Black-founded startup companies in Milwaukee and across the nation.
The life insurance company says it will aim to provide money and access to young firms that focus on financial technology, improving customer experiences, digital health — including wearable devices, and data analytics.
Craig Schedler, of Northwestern Mutual Future Ventures, says venture capital (VC) efforts usually talk about the importance of proprietary deal flow.
"And with proprietary deal flow frequently comes very closed networks and so your network far too frequently ends up looking like you. And, that sort of becomes this circle of people investing in people that look like them," he said during a Startup Wisconsin Week forum. "When the vast majority of VCs are white males, you can quickly see how that starts to resemble what your portfolio looks like. So, this is one way for us to publicly commit to change that."
Schedler says the program will start early next year and include two groups of five recipients each year.
Northwestern Mutual says it's also partnering with the local startup accelerator firm gener8tor to launch a Black founder accelerator.
Even with the announcement, estimates are Black business founders only receive about 1% of venture capital funding in the U.S. So, most have to rely on other funding sources.
Milwaukee Common Council President Cavalier Johnson praises the new local partnership. He says it holds the potential to “not only level the economic playing field in Milwaukee, but to uplift Black businesses, job access and neighborhoods.”