“They kind of shrugged it off”: Dean Foley calls on Aussie VCs to commit 3% of their $1.6 billion windfall to First Nations founders

First Nations founders

First Nations entrepreneurs presenting at the Barayamal Demo Day 2019. Source: supplied.

With more than $1.6 billion committed to Aussie VCs this year, one entrepreneur is calling on Australian funds to commit to investing at least 3% in First Nations founders.

Dean Foley, a Kamilaroi man, self-proclaimed ‘Indigipreneur’ and the founder and chief of the Barayamal Indigenous startup accelerator, has been doing a bit of digging, finding that little to no VC capital is ending up in the pockets of First Nations business owners.

Now, Foley is calling on investors to commit a minimum of 3% of those funds to First Nations entrepreneurs.

In a post on LinkedIn, in which he tagged the likes of Square Peg, Blackbird Ventures, Rampersand and Mike Cannon-Brookes’ Grok Ventures, Foley explained that he has often found VCs are unaware of just how many First Nations entrepreneurs there are in Australia.

While he knew Indigenous entrepreneurs were not high on the priority list, he was still disturbed by what he found, he said in the post.

“I wasn’t expecting VC firms to outright not invest anything in Indigenous ventures.”

Speaking to SmartCompany, Foley also notes a “lack of empathy” among some investors.

“They kind of shrugged it off,” he says.

Foley believes the focus thus far has been on promoting other diversity targets — for example, investing more into women-led startups.

For him, that smacks of an agenda to improve their image, rather than anything else.

“They were more worried about a public campaign to raise more money for their funds — which they did — instead of genuinely working towards solving a real problem,” he says.

Win-win

Square Peg’s close of its mammoth $600 million fourth fund earlier this week shone a light on just how much money has poured into the venture capital sector in Australia in 2020.

All up, funds secured at least $1.6 billion for investment into Australian startups.

Pressure has been building for Aussie VCs to increase their focus on diversity, and the past few months has seen many implementing new measures — or promising to — to that effect.

It was this that prompted Foley to run a quick straw poll, quizzing VCs on exactly how much they’re investing into “the traditional owners and original innovators” in Australia, he explains.

“The number one challenge First Nations entrepreneurs face, especially those who are operating from an Indigenous entrepreneurship perspective, is access to capital,” Foley says.

And, heading up Barayamal, Foley has a front-row seat to the innovations going on behind these businesses.

Encouraging VCs to invest here “seemed like an awesome win for everyone”.

A missed opportunity

This is not a new problem, but it’s a prevailing one. According to Foley, that largely comes down to the fact First Nations Australians have been “locked out” of the economy for some 200 years.

That means they control “little to no” part of the country’s wealth.

It comes down to poor policies, the people who control the funds, and some good old-fashioned negative bias, he explains.

“First Nations people are more likely to get funding if they are operating from a Western entrepreneurship perspective and don’t mention if they have Aboriginal or Torres Strait heritage,” Foley observes.

As VC funds head into 2021 with pockets full of institutional cash, he’s calling on them to “stop talking about diversity and put their money where their mouth is”.

A 3% commitment is in line with the 3% employment target of government organisations and large institutions, Foley notes.

And, while he accepts VCs have a fiduciary duty to their own backers, their investments are inherently high-risk.

Failing to include First Nations entrepreneurs is “a missed opportunity”, he says.

He hopes some of the large institutional investors would also appreciate a 3% allocation to the First Nations space is “a good and necessary investment for all, that could deliver invaluable returns”.

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