Andreessen Horowitz invested in hot startup Party Round through a new fund backed solely by Black investors

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  • Andreessen Horowitz raised a second Cultural Leadership Fund and is investing out of it.
  • The fund, which is backed entirely by Black limited partners, invested in the startup Party Round.
  • CLF’s backers have included Will Smith and Nas, and now historically Black colleges are LPs as well.

Andreessen Horowitz is investing out of a new fund backed entirely by Black investors, Insider has learned.

The venture capital firm is now investing out of its second Cultural Leadership Fund, which aims to connect fast-growing tech companies with prominent figures in culture and entertainment. Through the new fund, which is managed by the firm’s partner Chris Lyons, Andreessen Horowitz, also known as a16z, has backed the hot startup Party Round, which builds tools for startups to manage their fundraising.

A person with direct knowledge of the new fund told Insider the size of the new fund is consistent with the previous $18 million CLF Fund I that a16z raised three years ago. To date, CLF has invested in over 65 startups across multiple industries, including consumer, enterprise, crypto, fintech, healthcare, and biotech.

“While the Black community has historically played an important role in helping shape and grow some of the biggest social networks (Facebook, Twitter, Snap), we didn’t benefit from early equity participation in those companies and thus failed to capture the economic upside from our involvement,” said Lyons in a blog post announcing the close of the fund in June. “CLF is helping to change that.”

A spokeswoman for a16z declined additional comment.

While the Cultural Leadership Fund invests in startup founders from all backgrounds, its investors — known as limited partners — are all prominent Black business people in industries ranging from technology to film. The first fund’s limited partners included actors Will Smith and Jada Pinkett Smith, musicians Nas and Chance the Rapper, and executives Charles Phillips and Edith Cooper.

The fund’s LPs, alongside other Black entertainers and cultural figures, have also made more than $30 million of direct investments into a16z’s portfolio, Lyons wrote. For instance, the audio-chatroom startup Clubhouse’s Series A round included political commentator Angela Rye and author Shaka Senghor among the list of participants.

Andreessen Horowitz also announced a number of endowments at historically Black colleges and universities as limited partners in CLF Fund II. By opening up participation to those endowments, the firm is aiming to support their financial growth and to provide additional resources to HBCU students — along similar lines as Base10 Ventures’ Advancement Initiative, which also counts HBCU endowments as LPs.

All of the management fees from CLF as well as its carried interest — that is, its share of the returns from its portfolio companies — go to nonprofits that work to increase the number of Black employees in tech.

To date, the fund has donated more than $1.5 million in CLF management fees and carry to its nonprofit partners, which include Management Leadership for Tomorrow, Per Scholas, and SMASH.