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ST. LOUIS — How many present-day problems could have been solved if venture capital firms had invested in underserved founders sooner, Yinka Faleti questioned.
“So many brilliant founders and brilliant companies founded by women, people of color, immigrants and LGBTQIA+ identifiers have been excluded from venture capital,” said Faleti, a partner in Ascend Venture Capital — a micro venture capital firm based out of St. Louis.
“Venture capital is a leading way to move our country forward, so we need to not close the door on half of our society. Inclusivity is what pushes progress.”
Ascend Venture Capital specializes in data-centric tech companies that either are first movers in their industry or they have the potential to create a brand new industry altogether, Faleti explained. The firm takes an idea-first approach where investors are founder blind until the end of the process.
“It’s important to know who the founder is, and we do that due diligence to ensure they are a good leader — but this approach reduces the opportunity for implicit bias,” Yinka said, noting that VC trends have historically shown white men, who control a vast majority of venture capital, investing in others who look like them.
In Ascend Venture Capital’s current portfolio, seven of the 18 companies are founded by women, people of color, immigrants and individuals who identify as LGBTQIA+, Faleti noted.
“Investing in diverse founders is not only about inequity, but it’s a business multiplier,” he said. “Research has shown that companies founded by diverse teams can outperform up to 63 percent better than companies that are not. … When we began to look at our own portfolio, we realized that the seven who are killing it have diverse founders.”
To double down on the momentum Ascend is seeing in these founders, Yinka and his team have launched a $25 million fund. A portion of that funding will go toward the seven diverse founders already in the Ascend Venture Capital profile; another portion will be reserved for companies the firm has not yet met.
Although Ascend Venture Capital is based in St. Louis, the firm invests across the country, Yinka said. He encouraged diverse founders who believe their company is a first mover to reach out on Ascend Venture Capital’s website.
Yinka Faleti’s personal journey
Entering his professional career, Faleti didn’t have venture capital as an end goal; rather, he has always desired to serve others and fight inequities, he shared.
Born in Lagos, Nigeria, Faleti emigrated to the United States when he was 7 years old. Growing up in mostly Florida and Texas, his life took a major turn when he was accepted into West Point and then commissioned as an officer in the U.S. Army, he recalled.
“I served six years active duty — stationed in Kuwait to keep Saddam Hussein from invading Kuwait again,” Faleti said. “We had a great mission and didn’t lose a single soldier. We got back to Fort Hood in August of 2001 thinking we would never go back to Kuwait again, but we were soon deployed after 9/11.”
Fast forward to 2004, Faleti decided to leave the U.S. Army and attend law school at Washington University in St. Louis. Soon after graduating, Faleti was offered a position as a mitigation attorney doing commercial and product liability litigation.
“After a few years of doing that work, I really missed service,” he admitted. “I had come back from this larger-than-life mission in the Army and knew I needed to get back to service. So I went to the state prosecutor circuit attorney office in St. Louis helping people who had been assaulted, burglarized or abused.”
Faleti got addicted to the work, he said, and began to realize that the individuals he was prosecuting looked a lot like him.
“I was on the back end, and I needed to get to the front,” he said. “I looked to the front, and saw United Way of Greater St. Louis.”
Leading the fundraising division, Faleti and his team raised $300 million over four annual campaigns — outraising United Way branches in much larger cities like New York City and Dallas. Yet, Faleti still felt like he needed to get to the root of what was causing homelessness, lack of education and violence in the first place, he shared.
In 2014, a law enforcement officer shot and killed Michael Brown, an unarmed Black teenager, in Ferguson, Missouri, a suburb of St. Louis. From that, the Ferguson Commission founded a nonprofit organization to work to racial equity. Faleti led that nonprofit.
“I’ve been blessed to have had the opportunity to do a lot of hard things — I’ve repelled off cliffs, jumped off tanks, but this was some of the hardest work I’ve ever done,” Faleti said. “Because how do you undo generations of systemic inequity in education, health care, criminal justice and so on? You cannot undo it in a year or five or 10. It’s long-term generational work.”
With many of Faleti’s challenges leading back to the Missouri capitol, his next step was to get to Jefferson City. Faleti launched his campaign in 2019 for Missouri Secretary of State — receiving an endorsement from Kansas City Mayor Quinton Lucus.
Watch Yinka Faleti share his story as he campaigned for Missouri Secretary of State, then scroll to keep reading.
“It was a phenomenal experience that led me to interact with individuals from across the state,” he said. “… While I sit here, you know that I am not Missouri Secretary of State, so as we were wrapping up the campaign, I thought, ‘What do I do with this new network and all I’ve gained from this journey?’”
Faleti’s answer: go into venture capital.
“I began to see the intersectionality — venture capital is simply a tool that generates wealth for founders, for employees and for the communities in which those companies are grounded,” Faleti said. “I began to see how venture capital can be leveraged to make impact at scale.
“The first 250 years of this country have been marked by gross economic inequity. It’s pretty obvious when you look at the folks who are white compared to folks who are African American or Latinx,” he continued. “Venture capital has the power to make the next 250 years much more economically equitable. That’s why I joined Ascend Venture Capital.”
This story is possible thanks to support from the Ewing Marion Kauffman Foundation, a private, nonpartisan foundation that works together with communities in education and entrepreneurship to create uncommon solutions and empower people to shape their futures and be successful.