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A venture capital fund is providing opportunities for Black health workers by investing in Black-owned health firms.
The Jumpstart Nova fund, co-created by businessman Marcus Whitney, is aiming to financially support at least 22 Black-led startup health companies this year with 150 companies already in the running. Working alongside businesses such as Eli Lilly, HCA Healthcare and Bank of America, the investors have gathered a total of $55 million to help back these projects.
“The healthcare venture capital industry has missed out for decades on investing in America’s brilliant Black innovators, and this has been a loss for us all,” said Whitney in a statement on the Jumpstart Nova website. “Jumpstart Nova’s strong start and incredible group of limited partners validate the need to capitalize and support the vital solutions from this untapped talent base.”
Black entrepreneurs have been noticeably underrepresented in the healthcare business industry. In a recent 2021 study conducted by the United States Census Bureau, about 785,000 healthcare companies were reported. Out of these 785,000 businesses, only 35,000 of these businesses were Black-owned, meaning that not even 5% of the overall businesses are Black-led.
Whitney decided to help get Black health officials into the business industry after being inspired by the George Floyd protests. With the global outcry and the increased concentration on getting rid of racial disparities, he noticed that investors were more willing to help Black-owned businesses succeed. Whitney felt that it was his duty to take advantage of this awareness, so he co-founded the Jumpstart Nova fund.
As a Black man in the venture capitalist business, Whitney himself is operating in an industry that lacks diversity. According to a 2020 VC Human Capital Survey arranged by companies Deloitte, National Venture Capital Association and Venture Forward, only 3% of the venture capitalist participants were Black.
The following year saw a slight rise in representation. In a 2021 report by the Fairview Capital Partners, they found that the number of women and Black-led venture capitalist firms were part of an increase of about 25%. Even though there was an increase, however, the number of Black-owned firms remained small, totaling just 84 firms.
The amount of money these firms were able to raise also depicted a noticeable gap between white venture capitalists and Black venture capitalists. Whereas the white-led firms were able to get $170 million in investments, Black-led firms were able to get $100 million on average, creating a $70 million difference in opportunities.
Even with this lack of representation, Whitney took a chance and offered to invest in Cellevolve, a startup company that helps researchers create and promote gene and cell therapies. Dr. Derrell Porter, creator of Cellevolve, had a difficult time finding investors before Whitney stepped in.
“Being different or in the situation where the investor may not see themselves in you, or may not find a way to connect, that makes it harder to find capital,” said Porter in conversation with CNBC.
Now, with Whitney’s support, Cellevolve is thriving, working alongside biopharmaceutical manufacturing company National Resilience and research institute QIMR Berghofer.
“We knew these founders were ready for primetime when many doubted they even existed,” said Whitney in a statement. “Together, we are going to make a significant mark on the healthcare industry.”