Jun 11, 2015 ยท 6 minutes

Earlier this week, Intel Capital announced a $125 million fund that will be focused on backing startups run by women and minorities, including African-American, Hispanic-Americans, and Native Americans.

The purpose of the new Diversity Fund is two-fold. First, it's part of a larger Intel effort to promote more women and minorities in leadership positions in technology. At this year's CES, Intel CEO Brian Krzanich announced a $300 million investment to encourage diversity both within the company and in the technology community at large.

Intel Capital has made four investments through the fund already. On Tuesday it announced it has backed Brit Morin's e-commerce and media platform Brit + Co., in its recently announced $20 million Series A; healthcare cloud services and electronic records company Care Cloud as part of its $15 million Series C; Vessyl "smart cup" maker Mark One; and Salt Lake City cybersecurity company Venafi.

In addition to financial support, all of the companies that are part of the fund are integrating with Intel in some manner.

Intel Capital managing director Lisa Lambert will be managing the new fund. Lambert has been at Intel for close to 20 years, spending the last 15 as part of its investment arm, Intel Capital.

You've been in venture capital for a long time, most of it with Intel. Why is now the right time for a fund like this?

I think it goes back to the announcement our CEO made at CES in January. He announced a deliberate and intentful plan to diversify our workforce, and also to impact the industry by engaging the developer community, evaluating how we got to market and develop our products as we diversify our workforce, and making sure we have diverse teams in product development and marketing.

Also, though it wasn't explicitly stated, part of that equation is impacting the innovation ecosystem. The only way you can do that is engaging either in venture capital or investing. And we are doing both both because we are fortunate enough to have a venture capital arm, and not every company is lucky enough to have that.

The plan is to invest in what we think is representative of the global society. All the data points to more diversity in our country and across the globe. As these communites have more influence and more purchasing power, they should be involved in the development of products that are going to serve the market they represent.

We think it is good business. Designing products and investing in companies that Intel can partner with that serve these communities.

Sounds great, but...

But why'd it take so long? You'd have to ask our CEO about that, haha.

I actually think its quite timely given the amount of news that's been printed on the subject in the last year or so.

Due to the climate right now [in which Silicon Valley is still feeling the after effects of the Ellen Pao trial], is it of the utmost importance that something like this exists?

It think that that is happening in the landscape, but that is not our motivation at all.

Our motivation is to build products that represent our customer base, and our our customer base is represented by a lot of ethnic and other backgrounds, and obviously women are also a large part of that.

We want to build the right products that serve the market we invest in. So we are going to invest with the goal of distributing capital, which is a big issue here. There is a big funding gap between what women and minorities can receive from venture capital than what majority groups receive.

To what degree is this a passion project for you, personally, because of the nature of the fund?

That's a good question. I represent multiple groups. I'm a woman. I'm African-American. And I've been doing venture capital for 15 years, I've worked in tech for 18 years. I have a technical degree, I was a software engineer for many years.

In terms of my domain, this is something I am very passionate about. But it also happens to be relative to me as a person.

I'm grateful that I got the opportunity to lead the effort.

That is one thing that our CEO has really been committed to, having the people who lead these programs look like the communities they are pursuing. Having women investors and having minority investors was really important for a number of reasons.

One, it makes good business sense because we are credible in those communities, and, your networks tend to look like you. So we have connections in those communities and we can source deals more aptly.

But also, from a practical standpoint, if you look at the venture capital community as a whole, it is pretty homogenous in terms of demographic breakdown. I think a lot of them aren't sourcing these diverse deals because they don't have access to those networks and have those communities.

I do, so it just makes good business sense.

And it is also something that I can personally get engaged with because of my personal background. It is important to me.

You mentioned the broad swath of industries that you are initially investing in. What other industries and companies are you looking into that fit the mold of your fund?

I think the perception that there wouldn't be deal flow, and what we found is that that is most definitely not true.

In our pipeline we have big data and infrastructure, cloud computing and healthcare, media, and security.

It is as diverse as the broad ecosystem for venture capital investment. It is not a predefined set of industries or sectors. And we have lots and lots of opportunities.

We haven't been restricted in any way and I don't see any limitations. I think we do more in financial services, retail, as well as some hardcore tech companies, in the hardware and software spaces. It's been very diverse.

Hard sciences, and even manufacturing. We've seen it all.

I think there is this perception that if there are [minority or women-led] companies out there that they are in specific markets or niches. It is just not true.

We haven't been limited at all by domain.

Brit Morin is a well known entrepreneur, but do you think with a startup like Brit + Co., getting $20 million, there is some risk in having a deal like that for one of the first companies you back?

I don't think so. The reason I say that is that 100 percent of their customer base is female millennials. And if you know anything about female millennials, they've got $170 billion in purchasing power in America.

And for Intel, especially as we are trying to appeal to a more diverse base of customers, it's important to be able to communicate with this audience.

We are going to be doing some native advertising with Brit & Co., targeting this audience, and targeting and positioning technology messages to create brand recognition with this audience.

If you think about decisions being made with the Internet of Things, e-commerce, and even cell phones, they all involved more women then men. And we need to be marketing to them, and engage with how they purchase and how they use technology.

The Brit + Co. investment makes a lot of sense. It's not the pure tech, hard tech company that you'd expect Intel to invest in, but Intel is branching out.

Many of the investments in the Diversity Fund are a bit unconventional, like the Brit + Co. deal. But Lambert said that once VCs start to see results from these underserved markets, like better return on investment from women and minority led companies, they will "start to get it," in terms of the outcomes they could possibly see.

"This is my vision and my hope for this fund," she said. "That we invest in a bunch of these companies and prove this out."

[Illustration by Brad Jonas for Pando]