Fellowship Spotlight: DVRGNT Ventures
In their career as a product professional, B. Pagels-Minor observed a clear disconnect between the geographies represented among the talent carrying out the work and the geographies receiving considerable VC investments. They launched DVRGNT Ventures as a way to tackle this particular inequity in the landscape, and their uniquely intersectional lens and experience positions them to expand equity in other ways as well.
Identifying an Inequity in VC Funding
“Through my own professional experience as a product leader,” B. reflects, “I came to the conclusion that virtually all of us in the teams I worked with at Apple and Netflix were from the Midwest or the middle of the country. We weren’t from the major cities that traditionally get VC investment.” B. and the folks they were working with—engineers, product people, program managers—were from Middle America, Asia, and Africa, and the majority were from so-called “fly-over states.”
On their website, DVRGNT shares data that illuminates the disconnect between who’s doing the work and who’s getting the funding. They elevate that 44% of the 2829 companies founded in 2022 were in the Midwest, South, and Mountain West (which account for about 38 of the 50 United States), but that these regions continue to be disproportionately overlooked when it comes to investment. “This overarching understanding of how the data works was really this clarifying point for me of how I came to my thesis.” With DVRGNT, B. is investing in tech-enabled start-ups in Middle America. As more and more people are migrating away from large urban areas and the coasts, the need for resources in the Midwest, South, and Mountain West will only increase in the coming years.
DVRGNT’s Strategy
DVRGNT is a $10M pre-seed and seed stage fund that invests in tech-enabled startups in middle America. The fund focuses first on companies in Middle America, but once they’re there, the next most crucial consideration is the founders. “When you’re doing pre-seed and seed investment, so much of what you’re doing is having a supreme amount of confidence in the founders who are actually running the company.”
Because being a founder is such a challenging and isolating pursuit, B. is looking for founders who have grit, which requires a solid foundation, a strong network, good character, clear focus, and endurance. And because the Middle America founders DVRGNT is investing in are likely to experience systemic challenges accessing funding, B. is also seeking highly collaborative people who are exceptional at harnessing powerful partnerships, and who know how to be incredibly capital efficient.
“Great partnerships can help founders expand their brand more effectively and more quickly,” they emphasize. Finally, they’re looking for people who possess such inspirational leadership that other people feel motivated to work toward their vision. “If you’re in a startup—especially in tech—virtually everyone has an opportunity to go work for other companies that might be more stable or offer more benefits or money. So you have to have someone who is so inspirational and encouraging and talented that they can convince other people to come work for them for virtually nothing.”
A Unique Ecosystem
When asked about what sets DVRGNT apart from other funds, B. points to the rich ecosystem they’ve cultivated. This starts inside of DVRGNT and reaches far beyond the walls of the company. As an award-winning national and international speaker on topics like product-market fit, building great teams, and allyship across difference, B. is able to bring a breadth of experience and network that really helps in getting the work done. “The number one way to get pre-seed and seed companies to Series A is to have product-market fit,” B. underscores. “I’ve worked for over a decade helping some of the world’s best companies achieve this across many different types of products.” And when you add B.’s advisors into the equation—including the dean of the business school at Washington University of St. Louis and general counsel for one of the largest companies in the country—DVRGNT’s ability to support founders increases exponentially.
“When I decided to launch this firm in 2022,” B. shares, “I first interviewed dozens and dozens of other VCs. ‘We do it differently, we have our secret sauce, and we don’t really play well with others, is basically what I kept hearing.” They were puzzled by this individualistic mentality, instead doubling down on a more collective approach themselves.
“We’ve started this ecosystem of VCs that are directly in our investible states. As VCs that are in states outside of the traditional VC ecosystem, they also get less funding, so they’re much more into collaboration. We share deal flow; we share LPs; we really try to encourage each other.” It makes sense that B.’s priority of founders who collaborate well is a reflection of their own commitment to leveraging partnership in order to fortify their work. “We’ve also started to partner with VCs with a much larger reach, who might have an international presence, who like to partner with us to understand a little more about the Middle America ecosystem.’’
Outside of VCs, DVRGNT has also invested in building relationships with accelerators and incubators around the country. “I started off with Gener8tor, one of the largest accelerators in Middle America,” they share. “We became a strategic partner to them, becoming mentors to their programs, consulting, whatever it took to get that deal flow.” As a result, Gener8tor introduced DVRGNT to several other accelerators. “So if we have a founder who we think is great, but maybe isn’t investible yet, we’re able to hand them off to one of these accelerators or incubators.”
DVRGNT also nurtures relationships with local and state governments. “Because we’re investing in founders whose products have a unique impact on their community, they can get government funding, so we’re trying to also figure out ways to connect those companies with those resources.”
Leveraging an Intersectional Lens
“I’m probably so good at product-market fit because I don’t live in one area, thinking about things in a very linear fashion; I think about all aspects. I have all these different experiences that allow me to have empathy for all these different people in all these different communities.”
“As far as we can tell,” B. reflects, “I’m the very first openly trans VC lead in the world. Being so diverse means that I can speak so many different languages. I was assigned female at birth, so I understand the challenges going on with women. Because I’m trans, I understand general LGBTQ+ environments. Because many guys think I’m a boy even though I’m not a boy, I get access to their spaces. I’m Black, I’m Southern, and I now live in California.”
B. purports that, in addition to a lack of racial, ethnic, gender, and/or socioeconomic diversity in VC, there’s also a lack of industry representation outside of finance. “Beyond the fact that I have experience as an operator, I also just don’t have any of the bad habits that exist in traditional VC. Because I don’t have some network that’s already baked in, my assumption is that everyone can potentially add value. And that’s one of the reasons why, even as we’re still getting ourselves together and establishing ourselves, we’ve already had so much more impact even than some VCs that have a better pedigree than we have.”
Creating a More Reflective VC Landscape
In looking back to the early days of DVRGNT, B. remembers, “When I started to hire employees, the first applications I got were all Ivy League White guys.” They decided they would just wait it out a bit until the applicant pool reflected more diversity. And it worked. “Now my team is reflective of the communities in which we invest, because they live in the regions where I invest. They’re young, hungry, diverse folks who are looking to be GPs.”
Not only is B.’s team diverse, but everyone on it also has access to equity in the fund. B. takes issue with how often unpaid interns and fellows are working “like crazy” toward a fund’s goals, but never getting a piece of the pie. “My goal is really to help generate a new generation of folks who can be LPs in funds like mine.” To serve this goal, DVRGNT hosts an LP AMA (Ask Me Anything) on the third Thursday of every month. If people have any interest in investing in VC, they can sign up through DVRGNT’s Eventbrite page, and join a group of GPs from other companies that B. brings together to have their questions answered—no matter how simple.
“My personal mission is to generate 1000 LPs who look like me, who look like my team, who look like my really cool VC friends. We can actually be the change and we can tremendously impact which companies get funding just by being more aware that we can.”
Participating in the VCI Fellowship
“I wanted to win at VC, so I’ve done VC university; I just finished VC Lab, and now I have the VC Include Fellowship,” B. says. “And I will tell you, the VC Include Fellowship is so different.” B. reports that, while they accomplished something in all the other programs, they didn’t always necessarily understand why they did that thing or if they did it right. This is where they see VCI separating ourselves from the pack.
“I remember in my very first session with VC Include. I asked a question I’d had for six months, and the speaker actually answered it and unlocked something I didn’t realize I didn’t really understand.” B. was then able to go back, apply that new learning, and be better in their work. “I think that’s a tremendous difference in this program.” They feel that VCI is much more impactful than other programs when it comes to fortifying the most crucial, foundational elements of a firm.
“Every other program I’ve heard of doesn’t really connect you to LPs,” B. adds. “The fact that VC Include actually makes sure that you get introduced to LPs makes it the number 1 program in my mind. How else are you gonna make this happen if someone doesn't actually help unlock those doors for you?”
It is truly our pleasure to help B. get answers and make connections that will further close the gap in VC funding between Middle America and the rest of the United States.
