The venture capital industry has been around for a relatively short period of time, but it has already seen profound change. There have been many developments in the venture capital industry in the last few years or so. Newer venture capital firms like Xfund are taking a radically different approach to the firms that have come before. Many newer firms are looking at founders with different educational backgrounds, offering more opportunities to women and people of color, connecting with universities, and mentoring the founders of the businesses they fund. Read on to learn more about new developments in the venture capital industry.
Some Venture Capital Firms are Seeking Founders with a Liberal Arts Background
Traditionally, venture capital firms preferred to work with founders that have an extensive background in computer science. At the very least, venture capital firms used to look for founders that had a business management background. It was often difficult for people who had liberal arts backgrounds to even get meetings with venture capital firms. These days, this is no longer the case.
Founders with liberal arts backgrounds may still have a more challenging time getting funding, especially from older venture capital firms. However, it is now possible for them to get the funding their businesses need. This is especially true when it comes to the newer venture capital firms that are more open to founders from non-traditional backgrounds.
More Women are Getting Funding
In the past, only a small minority of the start-ups that received venture capital funding were founded by women. While the majority of funded start-ups were still founded by men, more female-founded start-ups have been receiving funding from venture capital firms. In fact, many venture capital firms now make a point of looking for female-founded start-ups that they can consider for funding. It should also be noted that many venture capital firms are now hiring women, who may be more receptive to start-ups that were founded by women.
More People of Color are Getting Funding
Just as more female-founded start-ups are receiving funding, more start-ups founded by people of color are getting funded. And with female founders, people of color had reduced access to venture capital firms in the past. While this problem certainly has not been completely solved, things are getting better for people of color who are seeking funding from venture capital firms. Many venture capital firms are making a point of considering start-ups founded by people of color. This is especially true of start-ups created in the last few years.
Many New Venture Capital Firms Have a Connection to a University
Another interesting development in venture capital is that many firms now have a connection to a university. Some universities even have their own venture capital firms. Even venture capital firms who are not officially affiliated with a university often have an agreement in place that allows them to consider start-ups from local institutions students.
Mentorship to Founders
In the past, many venture capital firms simply provided funding and business guidance to founders. However, many newer venture capital firms are also providing personal mentorship to the founders they support. This is more common with venture capital firms that work with very young founders like college students.
The Future of Venture Capital
Recent developments in venture capital mean that the industry will be more inclusive in the future. Women and people of color will have opportunities that they may not have had in the past. Even founders from different educational backgrounds will have venture capital opportunities that they likely would not have had a few years ago.