Cornerstone VC raises £20m for diversity-focused tech fund
New investor Cornerstone VC has held a first close on £20m for its first fund, which aims to back UK entrepreneurs from diverse backgrounds.
Cornerstone VC was born out of Cornerstone Partners, an angel network for diverse founding teams in the UK. The fund will focus on tech-enabled companies at the pre-seed and seed stages, typically investing initial cheques of between £250k and £1m with capital reserved for follow-on funding. It plans to invest in up to 40 companies, with a significant proportion based outside of London. Cornerstone’s angel network will also receive a share of the fund’s profits via carry participation.
Cornerstone VC will target management teams with inherent diversity (such as age, gender or ethnicity) and acquired diversity (social capital). It aims to address the equity funding gap for entrepreneurs who are “too often overlooked and underestimated by the wider funding community”, it said in a statement.
“We are on a mission to put teams at the heart of our investment approach, believing diversity is key to driving outperformance,” said Rodney Appiah, founder and managing partner. “We are looking for businesses that are intentional about team composition, can excel in high growth environments and are truly obsessive about execution. People first, software second.”
Cornerstone VC is led by Rodney Appiah, alongside partners Edwin Appiah and Wilfred Fianko. Rodney co-founded Cornerstone Partners in 2016, is a non-executive director of UKBAA and Conduit Connect, and was formerly an investor at BGF and Foresight Group. Recent investments from the team’s pre-seed angel portfolio include ByRotation, Passionfruit, Hutch and MoonHub.
“Contrary to perceptions around a pipeline problem, we don’t see any evidence of that,” Appiah added. “We meet more than 500 diverse founder led businesses a year and our own data indicates that there is a growing pipeline of high growth, innovation led, investment opportunities led by diverse founders, particularly at pre seed and seed stage requiring further institutional investment.”
Growth capital investor BGF and The Hg Foundation, a grant-giving charity with a mission to remove barriers to education and skills in technology, both led the first round close alongside VC fund Atomico. Other investors include Nic Humphries and several senior partners from software and services investor Hg, as well as other individual investors including former BVCA Chair Neil Macdougall, Scott Mackin, Jamie Broderick, Stefan Ericsson and Sidumiso Sibanda.