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As Wall Street’s interest in proptech has waned somewhat in recent months — a new, industry-focused venture fund has emerged to help those in real estate have a hand on the helm.
Twenty Five Ventures (25V) has created the 25V Diversity Fund, a technology venture capital fund built to back early-stage and startup initiatives led by Black, Latinx, Asian, LGBTQ+ and/or women entrepreneurs. It will also open its funding rounds to real estate agents, brokers and those working within the industry.
“We look for founders and limited partners who demonstrate grit and tenacity,” said 25V Founder Maximillian Diez in a statement. “And we find those qualities quite frequently among entrepreneurs who belong to marginalized communities.”
At 20 years old, San Francisco-born and raised Diez fell into the role of fund manager for Arthur C. Zief, a prominent San Francisco attorney. He built upon his opportunity to land leadership positions at Redfin and UpNest. He also served on the executive team that completed a buyout of the U.S.-based Movoto by OJO Labs. At the time of acquisition, Movoto reported 24 million monthly visits.
The San Mateo-based 25V Diversity Fund, a 10-year fund, will help reveal to the industry opportunities shrouded by traditional venture capital community bias. According to Crunchbase, Black and LatinX-founded proptechs have raised $15 billion since 2015 — a scant 2.4% of all venture capital raised in that same time period.
Global consulting firm McKinsey confirmed in a 2018 report Delivering through Diversity, which looked at 1,000 companies in 12 countries, that companies with greater than average ethnic diversity on executive teams return greater profitability.
Relative to gender diversity the report stated “top-quartile companies on executive-level gender diversity worldwide had a 21 percent likelihood of outperforming their fourth-quartile industry peers on EBIT margin, and they also had a 27 percent likelihood of outperforming fourth-quartile peers on longer-term value creation, as measured using an economic-profit (EP) margin.”
The “25” in 25V stems from the fund’s initial 25-point analysis of companies. However, the number is largely symbolic as the group now considers a broader list of performance metrics.
“Investing in diverse founders benefits everyone and creates opportunities where other funds do not,” Diez said.