There are now more than 200 Black professional venture capital investors in the U.S., according to the research I did last year with Sydney Thomas, the investment associate and head of operations at Precursor Ventures, an early-stage venture capital firm focused on pre-seed investments.
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The year 2018 has been a milestone for Black investors raising and leading funds. These included:
More than 60 of these investors gathered in New York earlier this month to attend the Ninth Annual Culture Shifting Weekend, with the goal of ensuring that general partners get access to new limited partners. Culture Shifting Weekends focus on innovation, technology and social impact, and are the annual signature event of Culture Shift Labs, a management consultancy specializing in growth and innovation through diversity and inclusion.
So what makes a good early-stage investor? Someone who can construct a portfolio of investments that go up in value over time and generate outsized returns.
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At the end of the day, results are what will drive the culture forward, and Culture Shifting Weekend is an annual opportunity for me to study and highlight a few of the Black investors demonstrating this.
Miriam Rivera is the co-founder and managing director of Ulu Ventures, a Silicon Valley-based seed-stage venture fund focused on information technology startups. Rivera’s fund was an early investor in Krux, a data management platform that raised $2 million in seed funding in 2010. Krux went on to raise more than $48 million in follow-on funding from top-notch venture funds including Accel and ultimately landed a $700 million acquisition by Salesforce in 2016.
Ulu’s other notable investments include school communication platform Remind’s $1 million seed round, which went on to raise a $35 million Series C led by Kleiner Perkins, Kahuna, which later received funding from Sequoia Capital and a $45 million Series B in 2015, and computer vision startup Blue River Technology, which was acquired by John Deere for $305 million in 2017. It also doesn’t hurt to have multibillion-dollar data analytics company Palantir in the portfolio.
Aaron Holiday & Nnamdi Okike are the co-founders of 645 Ventures, a seed and Series A venture firm that applies a data-intensive approach to investing in top software and internet companies. 645 Ventures originally raised an $8 million fund in 2014, quickly followed by a $40 million fund in 2017.
645 Ventures has already had four exits, along with many promising early investments in companies like hotel operations platform ALICE’s $3 million seed round, who later raised a $26 million Series B in 2017 led by Expedia, growth marketing platform Iterable’s $1.2 million seed round, who went on to raise a $23 million Series B led by Index Ventures, and sports media startup Overtime’s $2.5 million seed round, which went on to raise a $9.5 million Series A led by Andreessen Horowitz just a year later.
Marlon Nichols is the founding managing partner at Cross Culture Ventures, a venture firm that invests in the entrepreneurs who are building the future for the rest of America.
Nichols raised a $10.6 million fund in 2016 and is quickly building a promising portfolio, including investments in companies like in-home preschool startup Wonderschool’s $2 million seed round, who later raised a $20 million Series A led by Andreessen Horowitz, as well as eSports startup PlayVS, who recently raised a $30.5 million Series B just five months after their $15 million Series A led by New Enterprise Associates.
As the number of Black funds increases, we are beginning to see co-investment activity between them pick up as well.
Precursor Ventures, an early-stage firm founded by Charles Hudson, seems to be leading the charge with co-investment opportunities. For example, Precursor co-invested with Harlem Capital in on-demand device repair startup Fixt’s $2 million seed round in 2017. Fixt went on to raise a $6.5 million Series A in 2018.
Precursor also co-invested in Hingeto with both Cross Culture Ventures and M Ventures, which is led by Charles King and Adrian Fenty.
As former 500 Startups Venture Partner Monique Woodard stated in this blog post, “By the year 2044, people of color will become the majority in the U.S., making up over half of the U.S. population, and within this group, 37 percent will be Black or Latino.”
If the next wave of tech innovation will be driven by the activity of Black and Latino consumers online, it makes sense to equip more investors with capital that identify with these underserved markets.