Bank of America has committed to providing more than $500 million in equity investments to minority- and women-led fund managers in order to encourage diverse entrepreneurs, according to a news statement issued on Thursday.
According to Tram Nguyen, global head of strategic and sustainable investments at Bank of America, more than 60% of fund managers who can draw from the equity pool are led by women, more than 65% by Black folks, more than 20% by Hispanics and Latinos, and more than 15% by Asians.
Since the program’s inception in 2020, more than 150 funds have utilized the equity to invest in upwards of 1,000 startups, totaling $7 billion in capital, according to Bank of America. This translates into assistance for 1,500 different enterprises and employment for almost 21,000 individuals.
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“We work across our company to address critical needs in our communities, including the lack of access to capital that diverse business owners face as they start or grow their businesses,” Nguyen said in a statement.
According to Crunchbase statistics, companies led or formed by Black or Asian persons received around 0.9% of venture capital investment in 2023, while firms led or started by Hispanic and Latino individuals received approximately 0.94%.
Total venture capital dollars invested in firms fell 36% last year, owing to rising inflation and interest rates, according to CNBC’s Gabrielle Fonrouge in February.
Bank of America is also collaborating with the National Football League and the National Black Bank Foundation to help Black and minority-owned banks, according to CNBC’s Frank Holland.
“We’re very focused on supporting our fund managers,” said Nguyen. “We’re building a community, connecting them with our company and its vast network and resources, as well as with each other and the broader investment community.”