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venture capital - Page 6

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Black Owned Venture Capital, Private Equity & Angel Investment Firms

Less than 1% of American venture capital backed founders are Black and the percentage of Black people in decision making roles within the venture capital arena is not much higher. This lack of diversity within investment firms ultimately translates to a lack of diversity in the companies that they invest in.

The good news is that there are a growing number of Black owned venture capital and other investment firms run by people of color who understand that Black founders present a large and untapped market.

These investors make it a point to include Black startups in their portfolio, and in some cases, focus solely on underrepresented entrepreneurs.

Black Owned Venture Capital, Private Equity & Angel Investment Firms

Collab Capital is an investment fund leveraging financial, human, and social capital to help founders build sustainable, technology enabled businesses

Collab Capital Managing partners Barry Givens,  Jewel Solomon Burks and Justin Dawkins

Black Star Fund is an angel/venture fund that focuses primarily on early-stage technology companies.

Serena Ventures focuses on early stage companies and giving them the opportunity to be heard.

GenNx360 Capital Partners is a private equity firm that focuses its investments in industrial and business services companies in the U.S. middle market.

Daphne Dufresne-Managing Partner – GenNx360

Authentic Ventures is a seed and early stage Venture Capital Firm that believes that a strong, inclusive network of founders, operators, and investors can accomplish great things.


Lindsay Lee, Founder & Managing Partner of Authentic Ventures

Impact America Fund is an investment company that funds market opportunities that use technology to enhance the lives of all Americans.

Kesha Cash – Founder and General Partner – Impact America Fund

645 Ventures is a seed to Series A VC firm that applies a data-intensive approach to investing in top software and Internet companies.

Nnamdi Okike, Co-Founder & General Partner – 645 Ventures

Backstage Capital is a venture capital fund that invests in new companies led by underrepresented founders in the U.S.

Arlan Hamilton –
Founder & Managing Partner – Backstage Capital

Harlem Capital Partners is a diversity focused venture capital fund that invests in early stage companies focused on tech-enabled services, retail, and real estate.

Harlem Capital co-founders, Henri Pierre-Jacques and Jarrid Tingle.

Precursor Ventures operates as an early-stage venture capital firm. The company invests in seed and early-stage consumer, digital health, education, Fintech, hardware, and SaaS companies.

black owned Venture Capital
Charles Hudson, Managing Partner and Founder of Precursor Ventures

KICVentures is an investment holding company that creates, invests and manages several portfolio companies in the health-tech sector.

Dr. Kingsley R. Chin — Managing Partner & CEO – KICVentures

Fairview Capital Partners is a leading venture capital and private equity investment management firm. They implement innovative fund of funds, co-investment, and customized investment strategies for institutional investors.

JoAnn H. Price – CO-FOUNDER / MANAGING PARTNER of Fairview Capital Partners

The Bronze Venture Fund makes and manages innovative investments that align strong financial returns with positive social impact.

Stephen DeBerry – founder and chief investment officer – The Bronze Venture Fund

DiverseCity Ventures (Sacramento, CA) invests in scalable, technology-enabled companies that have a social, economic, or environmental impact and high potential for outsized returns.

black owned Venture Capital
Mariah Lichtenstern, Founder and CEO -DiverseCity Ventures

Cross Culture Ventures  invests in and develops companies that fuel shifts in cultural trends and behaviors within an increasingly diverse global marketplace.

Marlon Nichols – Co-founder/ Managing Partner- Cross Culture Ventures

Vista Equity Partners is a private equity and venture capital firm focused on financing and forwarding software and technology-enabled startup businesses.

black owned Venture Capital
ROBERT F. SMITH, Founder & CEO of Vista Equity Partners

Base Ventures is a seed-stage fund investing in technology companies.

black owned Venture Capital
Erik Moore – Founder and Managing Partner – Base Ventures

Reinventure Capital is a growth-stage equity and debt investment practice focusing on founders of color and women.

Edward Dugger III –
founding partner and President – Reinventure Capital

Syncom Venture Partners is a leading venture capital firm primarily focused on growth stage investments in emerging and underserved segments of the media and communications industry.

black owned Venture Capital
Terry L. Jones, Managing Partner – Syncom Venture Partners

Cleo Capital is an early-stage venture capital fund that invests in pre-seed and seed stage tech and tech enabled investments. 

black owned venture capital
Sarah Kunst, Managing Director at Cleo Capital

CRE Venture Capital is a venture capital firm that invests in technology-enabled startup companies.

black owned venture capital
Pule Taukobong, Co-founder & Managing Partner at CRE Venture Capital

Plexo Capital is a hybrid venture capital (VC) firm investing both in emerging VC funds and in early stage companies.

black owned Venture Capital
Lo Toney, Managing Partner at Plexo Capital

Base 10 is an early-stage venture capital firm investing in the automation of the real economy.

black owned Venture Capital
Adeyemi Ajao, Co-Founder of Base 10

lllumen Capital is a venture capital firm that invests in early-stage and start up companies.

black owned Venture Capital
Daryn Dodson, Managing Director at Illumen Capital

 

Tony O. Lawson


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Several Ways Black Businesses Can Attract Investors

Black businesses generate over $180 billion in revenue each year and create over 1 million jobs.  Also, Black women are the fastest growing segment of new entrepreneurs in the US.

Unfortunately, establishments owned and operated by Black entrepreneurs are least likely to receive funding from investors.

Ade Omitowoju of Groundwork  chats with us about the state of the investment industry and what Black businesses can do to attract investors.

SB: What opportunities exist for investors that want to fund Black owned businesses?

AO: I think there is a massive opportunity with Black businesses.  The challenge however, is that a majority of these businesses are what we would consider to be micro-enterprises or companies that generate less than $100k per year.  So the question is, how do we grow these companies and help them sustain?  Few things:

Access to business mentorship – access to accounting, tax, and legal support are prerequisites to credit access.  Why? Because a better grasp and management of the company leads to reduced credit risk.  Guiding that sister with the organic food delivery service on how to build credit to then hire additional support would be transformative in three ways;

1) that credit will help her expand faster

2) she will most likely hire someone of color and

3) her success builds wealth.

Access to capital – easy answer but harder to tackle.  Black businesses have been historically shut out from capital due to various reasons including racist lending practices (whole different conversation) and lack of attention that banks pay to the unique needs of black businesses.  If that brother had a loan to purchase another car for his on-site car washing business, the sky is the limit but he needs that lender who is willing to take the journey with him.

Access to data – platforms like Shoppe Black are revolutionary by increasing awareness of the tons of black businesses out there doing amazing things.  No longer can there be the excuse that black businesses are hard to find.  Circulating the dollar builds black businesses and builds black wealth.  The internet has the potential to magnify the impact of the black dollar.  We’ve seen it in Mound Bayu MS, Tulsa OK and Georgetown DC.  You are the new Green Book and its dope to see the potential.

SB: What do yo feel a lot of startups do wrong when trying to raise money?

AO: Being Nigerian, I see entrepreneurship from two distinct angles.  Going to the Continent and seeing what these young entrepreneurs are doing with practically no capital makes me feel that we need to rethink the way we operate over here.  An idea doesn’t always need money first, sometimes, it needs a customer, who has money.

Over here, I’ve seen brilliant entrepreneurs start companies without validating the product/market fit.  This means that they are building something before validating there is a customer base.  In the investor space we call this “playing in traffic.”  With the internet, we have a wealth of information to prove out our idea before we experiment.

I think that when you raise money, you have to show a demonstrated ability to solve a distinct problem and inefficiency in the market.  Being passionate about your idea is one thing but you have to connect the dots between your idea and a large market opportunity.

You also have to demonstrate that you have gone as fas as you can by bootstrapping.  That shows the investor that you have the grit to make it through the complex early stages to “de-risk” your business meaning that you have found a market, people buy (or want to buy) what you are selling and with a little capital, you can knock it out of the park.

SB: What are three main factors that need to be in place for a startup to be attractive to investors? 

AO: Great question.  I’ll premise this with the fact that different investors look for a different mix of factors but holistically the below three would apply:

1) Team: Demonstrated industry knowledge and expertise, proven sales and product development skills, with strong understanding of market dynamics. Do you know your customer, have a vision for how you will solve the problem, and have the right mix of people to make it happen?

2) Value Proposition: Differentiated solution leveraging best-in-class technology with evidence of customer satisfaction and a well established brand. Many VC’s don’t invest in things that are “me-too” products.

If you say you are the “Uber of XYZ”,  that may not excite an investor but if you have an idea to enter the market that Uber has created by leasing iPads for drivers to offer in car entertainment, thats a different story.

3) Market: Large market opportunity with a potential for rapid growth and validation of pathway to positive unit economics. You gotta think in billions and not millions.

Think big, dream bigger and tell us how you plan to change the game with your product and how large that opportunity is.  Also make sure that you wont be like many of these startups (unprofitable) without having a pathway to making a profit).

Even when Black owned startups cover the above mentioned bases and more, why is it still such a struggle to attract funding? (racism, ignorance, a mixture of both, something else?) Yes, there are people who think that investing in a Black company means that they are sacrificing returns but let me tell you something:

  • 77% of VC dollars are concentrated in 3 markets (California, New York, and Massachusetts)
  • 99% of that capital goes to Whites or Asians
  • 75% of these venture backed companies fail!

So, a venture capitalist can’t argue that whites and asians make better companies and are smarter because three out of four of those companies fail.  What this means is that the venture capital market is inefficient, and there is a huge opportunity in investing in the next Maci Peterson, Jewel Burks, Rodney Williams, Zim Ugochukwu, Ama Marfo and many more.

Bottom line is that Black brilliance is coming for the crown and smart investors will see the trend.

 

Adeleke Omitowoju is Principal at Groundwork, an early stage venture capital fund and accelerator based in DC. He is a proud graduate of Florida A&M University and currently advises and advocates for early stage tech entrepreneurs of color. 
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