This article has been updated.
Venture capital firm Andreessen Horowitz is launching the Culture fund — a new $15 million venture fund — that is partnering exclusively with Black celebrity investors in an apparent attempt to address Silicon Valley’s diversity issues, which are particularly bad in VC, the Wall Street Journal reported.
Actor and producer Will Smith, Golden State Warriors basketball player Kevin Durant, and Essence publisher Richelieu Dennis have already signed on to the fund as limited partners.
Although investors will profit if the funds perform well, Andreeseen Horowitz said it won’t collect the proceeds it would normally generate from fees and carried interest. Instead, it is donating investment returns to nonprofits that aim to develop the Black community’s engagement in tech, according to the report.
That’s good news for Arlan Hamilton, founder and managing partner at Backstage Capital, a venture capital fund dedicated to minimizing funding disparities in tech. Backstage invests in high-potential founders of color, women, and/or LGBT. The fund has invested in almost 80 companies and raised almost $5 million.
In May, Backstage Capital launched the $36-million About Damn Time fund to invest exclusively in businesses backed by Black female founders.
Hamilton tweeted, “People are asking my opinion. Um…I LOVE it. Do more of this.”
https://twitter.com/ArlanWasHere/status/1029064401440186369
Take a bow @ArlanWasHere !!! U helped make this happen. U C the future and make it better. So proud @aquaai is one of your 100! Hugs from Norway!
— Liane Thompson (@lianethompson) August 13, 2018
A rising tide lifts all boats 🙂
— Ben Gruber (@bennygruber) August 13, 2018
We coming for the investment pic.twitter.com/jNRB2crYp3
— Sophia (@SophiaCannon) August 13, 2018
The fund hasn’t closed yet, and the number of limited partners and how they were chosen is not known, according to WSJ. An Andreessen Horowitz spokeswoman declined to comment.
However, Sundial brands founder and executive chairman Dennis talked about his investment, telling WSJ he decided to invest in the fund because of its aim to help get more people of color into technology.
“Andreessen is one of the best in the world at tech and so the opportunity to partner with them in the tech space and focus purposefully and intently on creating opportunities for people of color in tech….is an important one,” Dennis said. Tech is “an area that is rapidly growing, and we’re disproportionately left out of it.”
One of basketball’s top-earning players, Durant is the founder of Durant Co., an investment vehicle targeting tech startups.
Black representation among venture capital partners climbed slightly from 2 percent to 3 percent between 2016 and 2018, with Black females making the difference — they were at 0 percent in 2016 — according to Richard Kerby, a partner at New York-based Equal Ventures.
Kerby analyzed the racial breakdown of 1,500 venture capitalists.
The investing team at Andreessen Horowitz (a16z) was white and male until two recent moves involving two women this year, Pitchbook reported. In late June, the firm hired Katie Haun as its first-ever female general partner. A few weeks later it promoted Connie Chan to general partner.
Athletes are increasingly investing in technology companies, said Ryan Nece, managing partner of Next Play Capital, a Redwood City, Calif.-based venture capital investing platform. Nece played pro football for the Tampa Bay Buccaneers.
As a founding partner of Queensbridge Venture Partners, hip-hop artist Nas has invested in more than 40 companies.
“It’s always great when white guys want to do something for black athletes and black entertainers, right?” said Baron Davis, a tech investor and former NBA player. “For me it’s more so about finding the guys who want to participate and actually building something that can be an institution that’s for us and not an institution that somebody else owns that’s just making us rich.”
