London-based Cornerstone VC announced on Wednesday that it has launched a £20M (approximately €23.91M) fund to back ‘exceptional entrepreneurs in the UK from diverse backgrounds’.
The round was led by BGF and The Hg Foundation. Atomico, one of Europe’s leading VC funds focusing on Series A and beyond, also participated.
Investors also include Nic Humphries and several senior partners from Hg, as well as former BVCA Chair Neil Macdougall, Scott Mackin, Jamie Broderick, Stefan Ericsson, and Sidumiso Sibanda.
Capital utilisation
According to a statement from Cornerstone VC, the fund will invest in tech-enabled companies in pre-Seed and Seed rounds with an initial ticket size between £250K (€299K) and £1M (€1.19M). It will also reserve capital for follow-on funding.
With this new fund, Cornerstone VC aims to back 40 startups, the majority of which will be headquartered outside of London. Via carry participation, Cornerstone’s angel network will also receive a portion of the fund’s profits. The company calls this an ‘original “twist” on the traditional VC model’.
Rodney Appiah, Managing Partner at Cornerstone, says, “We are looking for businesses that are intentional about team composition, can excel in high growth environments and are truly obsessive about execution. People first, software second.”
“Contrary to perceptions around a pipeline problem, we don’t see any evidence of that. We meet more than 500 diverse founder-led businesses a year and our own data indicates that there is a growing pipeline of high growth, innovation-led, investment opportunities led by diverse founders, particularly at the pre-Seed and Seed stage requiring further institutional investment,” adds Appiah.
Cornerstone VC: Everything you need to know
Born out of black-led angel group Cornerstone Partners, an angel network for diverse founding teams in the UK, Cornerstone VC is a venture capital fund focused on a ‘people first’ investment strategy. It invests at the pre-Seed and Seed stage in UK technology businesses. The firm aims to establish itself as a leading VC with a diversity-led investment strategy that unlocks outperformance and generates returns for investors.
Founded in 2016, the firm is led by Rodney Appiah, Edwin Appiah and Wilfred Fianko. Some of its recent investments include ByRotation, Passionfruit, Hutch and MoonHub.
Building on its research report, Access to Venture Capital (2021), the firm says it will focus on management teams with inherent (such as age, gender or ethnicity) and acquired diversity (social capital), and try to close the funding gap for entrepreneurs that are too often overlooked and underestimated by the funding community.
Brief about the investors
Founded in 2011, BGF claims to be the most active investor in the UK. It has invested £3B in close to 500 startups. The firm is a non-controlling minority equity partner with investments based on long-term objectives shared with the management teams it supports.
The Hg Foundation is a charitable organisation that provides grants with a clear emphasis on technology and education. The firm aims to assist those who may otherwise face access barriers in acquiring the skills necessary for employment in the technology sector.
Founded in 2006, Atomico has partnered with over 100 teams, including Klarna, Supercell, Graphcore, Compass, MessageBird, Masterclass, Attentive Mobile, Pipedrive, and Hinge Health. The firm’s team of founders, investors and operational leaders have been responsible for global expansion, hiring and marketing at companies from Skype and Google to Twitter and Uber. It has $5B in assets under management.
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