02 MAR 2020

Don’t Call it a ‘Pipeline Problem’

Announcing Goldman Sachs’ Launch With GS Black and Latinx Entrepreneur Cohort

by Margaret Anadu
Head of Goldman Sachs’ Urban Investment Group
and Launch With GS Lead Investor

Here’s a phrase I’d like to see retired: pipeline problem. As in, the reason that only one percent of venture capital dollars go to Black and Latinx entrepreneurs is because there simply aren’t enough Black and Latinx founders out there. You hear the same excuse when it comes to why the number is just below three percent for women-only teams.

I can tell you from my fifteen years of experience investing in areas overlooked by most investors that the opportunities are definitely there. To take just one example, Black women are starting businesses at the fastest rate in the United States – and are receiving under 0.1 percent of all venture funding.

That’s a number that should shock you. For investors, it should also get you excited. As the head of the Urban Investment Group at Goldman Sachs, through which we’ve invested over $1 billion in opportunities led by people of color, and as one of the lead investors for Launch With GS, it’s my job to drive capital where talent is abundant but access to capital is not. And let me just say this: That is an incredibly compelling investment strategy. 

In the 18 months since we started Launch With GS, our commitment to invest in businesses with diverse leadership, we’ve invested $230 million globally, backing businesses with game-changing ideas, innovative products and cutting edge technology. Our returns-driven investment thesis spans geographies and sectors – from a software provider in Atlanta, to a fintech company in Bengaluru and a pediatrics clinic in Shanghai. Along the way, we’ve heard from more than 7,000 entrepreneurs and investors, whose insights continue to shape the initiative.

But our ambition is to do much more. We started Launch With GS with the clear conviction that diverse leadership teams perform better. We knew there was opportunity in what is essentially an underinvested asset class. But we also knew that the forces behind that lack of investment were complex. The gap is about relationships, networks, biases, resources – the entire structure of the global funding ecosystem.

That’s why today, we’re announcing our first Launch With GS Black and Latinx Entrepreneur Cohort to connect growth-minded founders with the very best of Goldman Sachs. Over the course of 8 weeks, we’ll pair emerging companies with leaders at the firm who are experts in their fields – whether that’s an enterprise software investor, fintech research analyst, or a consumer retail-focused investment banker. And just as importantly, we’ll connect these companies to the Goldman Sachs network, including Fortune 500 companies that could be their customers, and leading start-up advisors who could help support their growth.  

I’m an investor. I get excited by meeting ambitious people who are building great companies. Launch With GS is about connecting those founders to Goldman Sachs, a recipe that for more than 150 years has led to some pretty extraordinary successes. Launch With GS is already a part of that history. With the Black and Latinx Entrepreneur Cohort, this is one more step toward building an inclusive future.

To learn more visit:  www.gs.com/black-latinx-entrepreneur-cohort