At Capchase, we believe that truly innovative ideas come from diverse perspectives. When everyone on a team comes from the same background, creativity and problem-solving become bottlenecked.
That’s why in 2021, we created an initiative to set aside $100M to be exclusively used for funding female- and minority-led startups. These founders have been historically underrepresented, and face higher scrutiny when raising capital despite that they often have some of the most innovative and successful companies.
Today, we’re proud to announce that we’ve surpassed our goal of deploying all $100M of that capital to these underserved founders.
Why we created this initiative: The state of funding today
We created this initiative in 2021 because we saw a tremendous imbalance in the distribution of capital to certain founder groups, and we felt we were in a position to help.
Funding for startups led by women and people of color has always been disproportionately low. However, the economic downturn in 2022, which saw a decline in venture capital investing by over 50%, further exacerbated the issue. In the United States, female-founded startups received only 2% of total venture capital funding in 2022, while minority-founded companies received a mere 1.8%.
In Europe, the problem is even worse: female-only teams in Europe secured just 1% of total capital, and minority-founded startups raised just 0.7%.
Why diversity matters
While inequality in the financing world is unfortunate on its own, it also has an impact on a company’s bottom line. Diverse teams are proven to be more successful than homogenous ones—especially when they’re under the helm of a female or minority leader.
On average, startups founded by women have a lower median burn rate than male-founded startups—which has positive implications for the startup's health, longevity, and growth potential, especially during a time when capital is harder to acquire. We’ve also found that the fastest-growing companies have 10% more women in their senior leadership teams than their peers, according to an internal analysis of over 500 early- and growth-stage SaaS businesses.
Additionally, a study from McKinsey & Company has shown that companies in the top 25% for racial and ethnic diversity are 36% more likely to have superior financial returns, while TechWire reports that companies with diverse executive teams have 19% more revenue and are 43% more likely to achieve higher profits compared to similar companies that lack diversity.
How data-driven lending decisions can level the playing field
We base our funding decisions solely on our applicant’s revenue, subscription, and financial performance. This data-driven approach ensures founders are given an equal opportunity to receive funds, grow their businesses, and retain equity—the numbers speak for themselves, and we’re able to deploy capital without the inherent bias typically found in traditional funding processes.
We’ve also utilized a proprietary AI technology to increase the speed at which funds are deployed. In many cases, founders can access their funds in as little as 48 hours.
Customer spotlight: Alchemy Vision
One powerful example of a founder who used our initiative to overcome the typical barriers to entry and secure funding is Flora Azucena, CEO of Alchemy Vision.
Using non-dilutive funding from Capchase, Flora was able to accelerate her business’s growth and focus on advancing her personal and professional mission to equip medical staff with the tools they need to improve patient care.
"As an immigrant, woman, and founder, it's no secret funding can be more difficult to receive. Capchase understands deploying capital to diverse founders can create greater opportunities for individuals and innovation…The financing provided by Capchase allows our team at Alchemy Vision to focus on our mission of supporting patient care and practice growth, as well as my personal mission to teach, lead, and inspire the medical staff providing care in this noble profession.”
— Flora Azucena, CEO of Alchemy Vision
The mission continues: How we plan to keep providing support
Capchase's commitment to supporting female and minority-founded startups doesn’t stop here.
In 2023 and beyond, we plan to continue supporting diverse perspectives and underrepresented groups by using our data-driven approach and proprietary technology to determine a startup’s eligibility.
We also commit to continually improving our processes and providing ongoing support to our existing customers so underrepresented founders have all the tools they need to realize their visions and grow their businesses.
Get funded with Capchase
We’re always looking to support innovative founders, regardless of their background. If your company has good fundamentals, we’d love to hear from you.
Get non-dilutive financing to help fund your next growth initiative with Capchase Grow, or accelerate your sales cycles and increase your ACV with Capchase Pay, a B2B BNPL solution built for SaaS companies.
