Black-led venture capital firms raised more funds than ever before in 2024, with a median fund size of $20 million, and an average of $59 million, according to BLCK VC’s newly released State of Black Venture Report 2025.
Still, that is far below the industry’s $50–$100 million median for fund sizes. And the average was skewed by a single (unnamed) $500 million outlier. In addition, deal activity among those funds declined sharply.
The paradox reflects both resilience and risk: Black GPs are demonstrating fundraising momentum, but a tighter market and structural inequities are reshaping how — and whether — that capital gets deployed.
The report, based on a national survey of 117 Black investors and professionals in-depth interviews, paints a nuanced picture. It captures a moment when political backlash against diversity efforts has weakened institutional resolve, while broader venture activity has slowed to its lowest levels since 2019.
Some Black-led VCs are finding success and raising vehicles at or above industry norms.
Slauson & Co., for instance, closed a $100 million second fund in 2024 to back overlooked founders across fintech, future of work, and consumer sectors. Cherryrock Capital, led by Stacy Brown-Philpot and Saydeah Howard, earlier this year raised a $172 million first fund to back growth-stage startups led by underinvested founders. Zeal Capital Partners followed, clinching an $82 million Fund II in May, more than tripling its assets under management in five years.
And newer entrants like The Equity Alliance, launched by Dick Parsons and Kenneth Lerer, are making headway with smaller but oversubscribed funds. The duo in 2022 wrapped a $28 million first fund to invest in diverse-led funds and early-stage ventures. The firm drew backing from big names including Ronald S. Lauder, Scott Kapnick, Schusterman Family Investments, Bank of America, and Ford Foundation.
Others are finding success diversifying into alternative funding models, such as revenue-based finance and venture debt. Several respondents to the Black VC survey emphasized the potential of revenue-based finance to enable greater equity and ownership by founders while realizing returns more quickly.
“The difference is, our returns come faster, and the companies we support don’t have to sacrifice long-term ownership for short-term growth,” says Ebony Utley of Ensemble Innovation in the report.
Many Black-led funds, however, remain under-resourced.
In 2023, most Black-led funds were active at the seed and pre-seed stages. By 2025, fewer firms reported investing at all, and none made initial investments beyond Series A. More managers may be at the table, but they are writing fewer checks.
One high-flyer, Arlan Hamilton’s Backstage Capital — which has raised about $30 million since its founding in 2015 to back underestimated entrepreneurs — has gone quiet.
The contraction also extends to talent. Early-career representation is shrinking, with fewer Black professionals under 35 entering venture. That narrowing pipeline raises long-term concerns about sustained representation and mobility across the asset class.
LP mandates
Limited partner behavior remains a central factor. Among the LPs surveyed, 44% reported mandates to invest in managers of color, 22% had mandates specific to women-led funds, and a third had no mandate at all. Capital most often comes from US-based pensions, endowments, family offices, and corporate funds — but commitments remain inconsistent, and only a third of institutions enforce accountability or track outcomes.
As the political backlash against diversity continues, some emerging manager programs are shifting their focus from diversifying their managers to capture overlooked opportunities, to “GP stakes” strategies that seek to invest in up-and-coming fund managers.
As one emerging manager put it: “It’s not just about getting the first check. It’s about whether they’ll come back when we’re raising Fund II.”
That tension reflects what many Black managers describe as a pattern of episodic engagement: LPs express interest or respond to public pressure, but long-term support remains uneven. Without anchor commitments and repeat backers, emerging managers struggle to scale beyond small, early-stage funds.
For some managers, discipline in deal pacing has become a differentiator. Washington, DC-based Zeal Capital Partners, for example, invests in diverse founders across three trillion-dollar markets: financial technology, employment pathways, and health equity. The firm’s $82 million Zeal Fund II attracted a mix of institutional and mission-driven backers, including Citi Impact Fund, M&T Bank, MassMutual, Wells Fargo, Zaffre Investments, and Spelman College.
“Zeal’s momentum with new and returning LPs comes from consistency and clarity, proving that a focused mandate across three trillion-dollar markets can deliver competitive returns,” Nasir Qadree, founder and managing partner of Zeal Capital Partners, told ImpactAlpha. “In this market, we’re prioritizing quality over quantity, deploying with conviction to build a portfolio that endures.”
That perspective echoes the report’s findings: in today’s venture climate, fund managers are under pressure to show staying power by being selective, not prolific. Under-deployment can create drag on fund performance, especially when smaller funds are forced to ration checks and miss opportunities in competitive later-stage rounds. At the same time, over-indexing on early-stage deals without sufficient reserves leaves managers exposed in a down market.
For LPs, the implications are equally stark. Mandates without systems for accountability risk becoming symbolic cover rather than catalytic change. The report urges LPs to allocate long-term, catalytic capital to emerging Black-led funds, provide anchor commitments, and revisit frameworks for assessing risk and readiness.
Looking ahead
Despite the headwinds, the report highlights opportunities for Black-led funds to expand their role in the ecosystem. Collaborative investment models, cross-border opportunities in Africa and the Caribbean, and flexible instruments such as revenue-based financing are gaining traction. Adoption of generative AI tools across due diligence and deal sourcing also signals an evolving toolkit.
The central question is whether the momentum in fundraising will translate into durable institutions. If Black-led funds can convert capital raised in 2024 into disciplined deployment and sustainable returns, they will strengthen their position as long-term allocators. If not, the “fewer deals” trend risks stalling a decade of progress.
As BLCK VC notes, progress requires more than statements of intent. It will take LPs, GPs, and ecosystem partners aligning around durable structures, consistent resourcing, and transparent accountability.
“Black investors continue to lead, despite constraint, despite backlash,” writes Kareema Thomas of Black VC in the report’s intro, which calls for more structured, sustained, and accountable action on the part of investors. “We welcome those who understand what is at stake to step forward with us.”
The paradox of “more money, fewer deals” is less a contradiction than a call to action: proof that capital is flowing, but a reminder that sustaining momentum will require deeper commitments across the venture stack.
