Local venture fund raises $20M to invest in diverse startups

Sixty8 Capital, an Indianapolis-based, seed-stage venture capital firm supporting Black, Latino, female and LGBTQ-led startups, announced Monday the first close of its new $20 million venture fund.

Investors include The Indiana Next Level Fund, 50 South Capital, Bank of America, Eli Lilly and Co., First Internet Bank and the Central Indiana Community Foundation.

Led by managing director Kelli Jones, Sixty8 Capital is industry-agnostic and will focus initially on seed investments between the coasts, with an emphasis on the Midwest. Sixty8 Capital is being operated in partnership with Indianapolis-based Allos Ventures, one of Indiana’s most active VC firms. Allos principal Paul Ehlinger serves as Sixty8 Capital venture partner.

Founded by Jones in early 2020, Sixty8 Capital will seek to invest in 25 to 30 pre-seed and seed-stage companies with initial equity checks of $250,000 to $500,000 per company, reserving additional funds for follow-on rounds.

Investment will focus on undercapitalized founders and innovators who too often miss out on critical funding, since 90% of venture capital goes to people who look like and live near investors. Sixty8 Capital’s new fund is focused on uncovering potential among diverse founders whose access to capital is limited by race, gender, sexual orientation or proximity.

“We believe there is an opportunity to truly level the playing field when it comes to capital access for diverse founders in any industry,” said Jones, one of the first Black, female venture capitalists in Indiana. “There is a $4 trillion missed opportunity when we don’t put a focus on diverse founders. Venture capital has a significant opportunity to change the trajectory of [small and mid-sized businesses] and microenterprises by helping them build products and services that utilize tech and have the opportunity to scale.”

Jones, the co-founder of Black Hatch Fund—a venture capital fund and accelerator that supports Black tech entrepreneurs—joined Allos Ventures, one of the biggest and best-known venture capital firms in Indiana, last August. Don Aquilano, who co-founded Allos in 2010, and Jones promised—when Jones joined Allos—there would be more announcements regarding Jones and Allos to come.

Jones and Allos came together through “mutual outreach,” Jones said.

“We have known Kelli for some time and have admired and supported her work in both tech ecosystem and diversity programming,” Aquilano told IBJ. “Her experience and network will only enhance our Allos platform and further benefit our portfolio.”

Jones, an Indianapolis native who graduated from Indiana University Robert H. McKinney School of Law and Tennessee State University, has worked in the tech industry for more than a decade.

In recent years, there have been increasing complaints from diverse entrepreneurs and business owners that capital firms are controlled mostly by white people who invest primarily in other white business operators.

Black founders are at the helm of just 1% of venture capital-funded startups, and startups with all-female founding teams saw a declining share of all VC dollars invested last year with just 2.4%, according to the Crunchbase startup database.

Sixty8 Capital has already identified one of its first investments: Qualifi, an Indianapolis-based SaaS platform that helps recruiters improve their hiring efficiency and effectiveness.

“Sixty8 Capital’s support goes beyond the investment. The team will play an active role in advancing management teams, optimizing marketing and sales, and assisting with acquisitions, as well as strategizing for a potential exit,” Darrian Mikell, Qualifi’s chief executive officer and co-founder, said in a written statement.

Indianapolis-based pharmaceutical company Eli Lilly and Co. sees its investment in Sixty8 Capital as an ideal fit for Lilly’s Racial Justice Initiative, which focuses on several areas of impact including healthcare access, supplier diversity and jobs within the communities in which Lilly operates.

“We are excited to support Sixty8 Capital on its mission to uplift underrepresented founders and innovators,” Philip Johnson, Lilly senior vice president and treasurer, said in a written statement. “Diverse and historically underrepresented founders struggle to obtain capital to form and build their businesses. Lilly’s investment in Sixty8 Capital is representative of our broader efforts to use our financial and human capital to create lasting change that makes life better for people in the communities we serve.”

Outreach will be an essential part of the Sixty8 Capital’s strategy.

“We have to help lift the veil on how these founders can connect with VCs,” Jones said. “Even if we don’t invest now, we can still listen. We can give them feedback on their pitch. Some of them have been bootstrapping for two or three years, trying to start a company while working full-time jobs. Some of them are even turning a profit. Maybe they’re not quite ready to fundraise, but we can help them get there. Or maybe now is the right time for Sixty8 Capital to invest, and that founder will have the chance to show everyone how far they can take their idea, regardless of whether it’s in SaaS, media, [consumer package goods] or ecommerce. We want to find the diverse founders that traditional VCs are overlooking.”

Sixty8 Capital’s name stems from the generational, class and political events of 1968, a watershed year in the civil rights movement. Local digital product agency Innovatemap was hired to help create Sixty8 Capital’s brand identity.