Gold House launches $30 million fund to invest in entrepreneurs of Asian descent

Gold House launches $30 million fund to invest in entrepreneurs of Asian descent

Megan Ruan knows firsthand how representation can impact entrepreneurship funding. She recalled that earlier in her career she was the only black woman to have worked in a family office and managed a portfolio of venture investments.

“I’ve seen the decision making and how it differs between the people who have written checks on these different funds and the types of companies and founders that they have invested in and what a difference it has made to have a two or more underrepresented voices in the space,” Ruan told CNBC.

Now, Ruan is a General Partner at Gold House Ventures, a $30 million fund investing in Asian and Pacific Islander founders. Gold House, a nonprofit collective that advances advocacy and socioeconomic justice for APIs, announced the fund’s launch Tuesday morning.

Gold House Ventures aims to strengthen API leadership in the corporate world by empowering Asian entrepreneurs. According to an analysis by Harvard Business Review, Asian-American professionals are least likely to be promoted to management in the United States. Employees of Asian descent made up about 13% of the professional workforce but only 6% of executives, the Ascend Foundation found.

“Gold House Ventures says how do we create an index of all top Asian private companies?” said Ruan.

The fund’s investors include venture capital firms Lightspeed, NEA, Bain Capital and General Catalyst, as well as philanthropists such as the Chan Zuckerberg Initiative. Individual investors include DoorDash CEO Tony Xu, Block CFO Amrita Ahuja and YouTube co-founder Steve Chen, as well as celebrities such as Anderson .Paak, Padma Lakshmi and Daniel Dae Kim.

“Market-Oriented Social Impact”

Gold House Ventures grew out of the non-profit organization’s existing work promoting API entrepreneurship. In 2019, Gold House launched an accelerator program for API-led businesses. From the accelerator program, the organization has created a network of founders and a network of angel investors.

“We’ve always wanted to be an Asian Y-combinator, and now we’re much closer because … we also make financial commitments to these companies,” said Eric Feng, general partner at Gold House Ventures and previously general partner at the VC fund Little Perkins.

The fund identifies portfolio companies through Gold House’s accelerators and deal flow from its investor network.

Gold House Ventures describes its work as “market-driven social impact.” The fund is a for-profit initiative for its limited partners, but all fees and income from the general partners are donated to the non-profit organization.

“None of this is because it’s a donation … which we’re just going to subsidize,” Feng added. “These are great companies that are easily overlooked.”

Diversity in the Asian Diaspora

In the startup space, Asians accounted for about 25% of venture-funded founders, according to a 2020 report by Diversity VC and RateMyInvestor. By comparison, APIs make up about 6% of the US population, according to Census Bureau data.

However, the aggregate numbers obscure the challenges faced by Asian women, South Asian and Southeast Asian entrepreneurs in raising funds, Ruan said. Women-founded companies in the US received just 2.1% of venture capital dollars invested in 2021, according to PitchBook.

“A lot of people think that we’re a monolith as a community,” said Bing Chen, general partner at Gold House Ventures and president and co-founder of Gold House. “On the part of the jury as well as the founders, we make sure that we correctly reflect the diaspora representation.”

Half of Gold House Ventures’ portfolio has a female founder and a third of the portfolio is non-East Asian, according to General Partners.

“The diversity of gender and ethnicity of our founders is important, but so is the diversity of ideas related to Asians starting businesses that serve our people or community,” Feng said.

Sanzo, an Asian-inspired sparkling water company, is one of the portfolio companies that Feng is highlighting. The company’s founder, Sandro Roco, is Filipino-American and his products use Asian flavors. Sanzo announced a $10 million Series A funding round in February.

Gold House Ventures has also previously invested in Asian online grocery retailer Umamicart, investment app Pluang and cryptocurrency exchange Binance, according to Crunchbase.

For Ruan, investing in API-led companies as an API-led fund underscores the importance of minority-focused funds.

For Gold House Ventures’ investments, “We are the partner that makes the most sense to support the company because we value the population they are trying to serve, the problem they are trying to solve, and also the unique experience of the… founders really understand API entrepreneurs,” said Ruan.