Dallas VCs With All-Black General Partners Target $50M Fund In Market Mostly Ignored By Silicon Valley

Written by Ann Brown

Marcus Stroud and Brandon Allen know exactly what they want to do with their $50 million debut venture capital fund — if they meet their fund target, that is.

The founders of the Texas-based TXV Partners want to use the fund to redefine the venture capital model and reach out to founders typically ignored by Silicon Valley.

The two met six years ago as roommates at Princeton University and they realized they had the same goal — to be venture capitalists.

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“We were at a lecture and there were a couple VCs on campus speaking,” 25-year-old Stroud told TechCrunch. “Being a kid from a small town in Texas, Princeton was already a huge culture shock, but hearing about a world of VC, investment banking and private equity just really intrigued me.”

After graduating in 2016, Stroud headed first to Wall Street to work as a fixed income analyst, then to Austin to become an alternative asset manager Vida Capital. Allen, 24, worked as a consultant for two years before the two joined forces.

Princeton Tigers Marcus Stroud #56 is dejected on the bench late in a game against the Harvard Crimson during a college football game on Saturday, October 25, 2014 in Princeton,NJ. Harvard won 49-7. (AP Photo/Gregory Payan)

If TXV meets its ambitious target of $50 million, it will be the largest fund ever with all-Black general partners.

Stroud and Allen plan to spend the $50 million on millennials, Techcrunch reported. “That is, millennial-friendly startups in the consumer, fintech, and blockchain verticals, of which they’ll provide between $500,000 and $3 million in equity funding. So far, they’ve invested in one company, an Austin-based blockchain music platform called Matter Music.” 

Allen and Stroud, a former Princeton’s football player and son of an ex-NFL player, have been able to get support from the athletic community to help support the fund and its portfolio companies. “Former NFL player and Northgate Capital managing director Brent Jones is a mentor, and the firm’s advisors include athletes-turned-investors Torii Hunter and Steve Wisniewski, a former professional baseball player and NFL player, respectively,” Tech Crunch reported.

The new firm has two offices, one in Dallas where Allen is based and another in Austin, manned by Stroud.

“We wanted to be part of the next great VC hub,” Allen told TechCrunch. “We felt like it made sense and we felt comfortable in Texas. The thought of moving to San Francisco was out of reach for us. Texas has the opportunity to be at the forefront of what the next generation of technology will look like.”

He added: “We’re young, Black and in Texas. We’re trying to do it differently. We wanted to really see if we can redefine the VC model from the bottom up. It’s important for Texans, for African Americans and for millennials.”

TXV stands out for many reasons. It is Black run in a sector dominated by white men. At 81 percent of VC firms, there are no Black investors, according to data collected by Richard Kerby, a partner at Equal Ventures. About half of Black investors in the industry are at the associate level or the lowest level at a firm. Just 2 percent of VC partners are Black, TechCrunch reported.

TXV Is ready to disrupt.