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Minority Report

VC firms are becoming more diverse--but does that mean more funding for minority-owned businesses?

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This story appears in the October 2004 issue of Entrepreneur. Subscribe »

Businesses led by women and minorities have long lagged in the race for venture capital-and this past year was no different. In 2003, women led companies accounted for a scant 4.2 percent of all VC dollars, according to a 2004 report from Growthink Research in Los Angeles and Re:invention Inc. in Chicago. Similar numbers are not even available for minority-owned businesses, though experts estimate that they grabbed an equally small slice of the venture pie.

But in the microcosmic world of VC education, an interesting shift is taking place that may change those stats in coming years. The latest class of the Kauffman Fellows Program, an educational program based in Shawnee Mission, Kansas, that's designed to educate and train future VCs and leaders of high-growth companies, is the most diverse to date. Of the 14 fellows, eight are minorities: two are black, five are Asian, and one has a Middle-Eastern background. Three of the fellows are women.

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