What Would You Tell A Black Founder That You Wouldn’t Tell A White Founder?
In this six-part series, Moguldom tries to get inside the head of Miami tech entrepreneur Brian Brackeen, CEO of facial recognition firm Kairos. We want to know how Brian thinks, and what it takes to grow as a black tech startup founder. This is Part 5 of the series.
Silicon Valley has tried to excuse its lack of diversity by saying, “It’s the pipeline thing,” or “There’s not enough black and female engineers,” or “It’s not us.”
Historically excluded from traditional sources of venture capital, black founders have a growing network of black dealmakers and gatekeepers to draw from.
Tech founder Brian Brackeen wants to put to rest what he calls some fallacies about getting funding. “When you are doing good work and the numbers are there, you have to be willing to be told ‘no’ a lot of times,” Brackeen said in a Moguldom interview. “Your batting average is going to be lower than other folks.”
Moguldom: What would you tell a black founder that you wouldn’t tell a white founder in terms of raising capital?
Brian Brackeen: I would tell them not to believe they cannot raise capital. There is so much noise and writing around the topic that people are starting to not believe. Some will even say, “why should I even try? I’m not going to be successful.” When I look at our cap table, around 80 percent of the folks are white. The idea that you can’t raise capital from other races is simply a fallacy. That said, you need to be realistic and understand you are going to get a lot more no’s than someone else. You can’t lose heart over that.
Moguldom: No disrespect to you, but you have a “nerdy swag,” where a lot of black founders may not check the box in terms of the pattern-matching that investors are looking for.
Brian Brackeen: I wrote a piece early this year (about that) in Inc. Magazine. They were trying to put me into a particular box. Amongst the research that we found, there are more founders that are like me than otherwise. The traditional founder these days is college educated, a little older than we would imagine, oftentimes married. I believe that I represent the standard amongst this particular group. That said — particularly women, who are a double minority — it’s tough when you’re a minority. It’s even tougher when you’re a double minority. One of our investors, Arlan Hamilton is a triple minority. She’s gay, black and female. So not a single day is easy for her. That said, she has been successful in raising a small capital fund. She’s made 50 investments to date and now she’s raising her second. So, it can be done and I would offer she doesn’t have the “Carlton swag” we talked about. She is very traditional, almost has a Texan accent. But when you are doing good work and the numbers are there, you have to be willing to be told “no” a lot of times. She has gotten a lot more no’s than other folks starting a VC fund. You will be successful, but I will admit that your batting average is going to be lower than other folks.
Moguldom: Does Silicon Valley need a Jackie Robinson in tech to break out and become a unicorn? Ben Horowitz seems to buy into the theory that white folks and institutions will suddenly change once they see the first black unicorn. Greed will take over and overcome a lot of the systemic biases and racism in tech in Silicon Valley. Do you buy into this theory?
Brian Brackeen: I think Silicon Valley has a serious problem with culture independent of the Jackie Robinson phenomenon. I think if we had three, four or five Jackie Robinsons today, Silicon Valley would have the same problem as it has now. Geography plays a huge role in this problem. We are starting to see this now in Miami. Venture capital funds are being raised and invested in Miami startups. You can go through the whole cycle, here in the city. Miami is so diverse, the venture capital community is more diverse than Silicon Valley. If we had an equal number of venture capitalists in Miami, I would almost guarantee they would have better returns and better representation. Silicon Valley’s problem is much deeper than a single successful startup. I consider myself a conservative Democrat. For me, there are very few government prescriptions for the problem. Probably more ways it can get in the way than solving it. But for business, there is actually a lot that they can do. I like to see folks like Intel Captial — they have a diversity fund but the rules they apply to that fund are so difficult that folks can’t get down that funnel. So they look for someone in that business group to sign off on a product or a service first, then you go through an entire venture capital process — a process nearly impossible for people of color to get through.
Moguldom: Thirty percent or more of VC funding comes from university endowments and pension funds. As you know the investors at the endowment level are not taxing the endowment or investment returns, VC returns. Do you think something can be done at the state and federal level to help solve this big problem?
Brian Brackeen: That makes perfect sense, particularly for public pension funds and fund to funds, which is a big group here, where a pension will invest in a fund to fund and then that fund will invest into multiple capital firms under a thesis. They consider that diversity requirement. I don’t think that is out of line. Particularly because the money comes from these diverse pools from those cities and those states.
Part 1 in the Brian Brackeen series: Morgan Stanley-Backed Tech Entrepreneur Could Be Mentoring The Next Elon Musk
Part 2 in the Brian Brackeen series: Can Cryptocurrency Be Considered A Real Asset Class Or Currency?
Part 3 in the Brian Brackeen series: Do You Feel Rejected By Silicon Valley Establishment? The Huge Role Geography Plays In That
Part 4 in the Brian Brackeen series: What Is President Trump’s Endgame? We Asked A Tech Entrepreneur To Go There