Monica Wheat Goes Hard For Venture Capital In Detroit
Monica Wheat goes hard for the city of Detroit where she was raised.
She led the launch of Backstage Capital in Detroit, and now works as Detroit managing director of Arlan Hamilton‘s venture capital firm, whose mission is to invest in founders that identify as women, people of color, or LGBT.
Wheat chose the University of Michigan to pursue her engineering degree, went to work for GM in Shanghai, but in the end, returned to Detroit. There, her career as an ecosystem builder, founder and educational leader took off. After working with companies like Starcom and Leo Burnett and teaching at the College of Creative Studies in Detroit, Wheat co-founded a digital strategy consulting company.
Along the way, Wheat’s path turned towards helping other entrepreneurs build and scale their own businesses. She and her sister launched Digerati Girls and Digerati Kids, teaching girls and kids to pursue innovative careers and entrepreneurship.
Today, Wheat is the executive and co-founder of Venture Catalysts, an organization that builds inclusive ecosystems through strategic support for large-scale entrepreneurship events and growth programs.
She shares how she galvanized the community to bring Backstage Capital to Detroit, the challenges of pushing startups when the city was suffering and what founders of color are doing wrong.
In Detroit, we’re super proud of being the home of innovation long before Silicon Valley due to the automobile industry, but we got comfortable. I think now we’re on the path of being innovative and developing new products for different industries. Our residents, large corporations and investors see it.Monica Wheat, managing director of Backstage Capital Detroit, and co-founder/executive director of Venture Catalysts.
Moguldom: Why did you start Venture Catalysts?
Monica Wheat: I have worked on several projects on the coast, overseas and in different industries. What I found is that there are a lot of ecosystems that need help developing. A lot of the work that we were doing in Detroit and in other cities were one-off events like Techstars programs. We would produce the event but there wasn’t continuity before or after to provide infrastructure and an overarching vision to change how people approach ecosystem-building and developing programs for entrepreneurs and aspiring venture capitalists.
Moguldom: How long has it been since you started and how many people or organizations have been able to benefit from it?
Monica Wheat: I started the groundwork for Venture Catalysts in 2016. We incorporated in 2018. Our most recent count, about 30,000 people have gone through the programs we run. We’ve done well over 1,000 events at this point. A lot of it came from Techstars Startup Week. Last year we did 250 individual programs for Startup Week. We also have year-round events as well such as workshops, boot camps, pre-accelerators, and accelerators. We’re a pretty massive, connected ecosystem of folks who are super focused on providing opportunities. It’s been fun. I am excited to have been in the right space at the right time and to have this as my career.
Listen to GHOGH with Jamarlin Martin | Episode 67: Jamarlin Martin
Jamarlin goes solo to discuss the NFL’s entertainment and “social justice” deal with Jay-Z. We look back at the Barclays gentrification issue in the documentary “A Genius Leaves The Hood: The Unauthorized Story of Jay-Z.”
Moguldom: As a four-time founder, what has been a memorable challenge for you since starting Venture Catalysts?
Monica Wheat: Detroit is an underdog if you will. I’ve been doing this work before Detroit was hot. Right now, Detroit is in the midst of a renaissance and rebuild with major dollars being put into real estate, etc. I think one of the things that became a challenge for me was trying to help people understand that building a startup ecosystem was a valid path. I started this work in 2006-2007. Back in the day, I thought I was going to be an engineer. I attended the University Michigan, thought that was going to be my career path. It wasn’t. I was working for General Motors and Ford in different roles, both on the corporate and agency side by working for their advertising agencies and helping them build websites and do marketing and advertising. While I was doing that work, I was also doing the work to build our community simultaneously, because I saw it as exciting, and what I wanted to do.
The biggest challenge then was helping people understand they should take a risk, especially in a city like Detroit, at a time when we were not in a good space and had bankruptcy hanging over us. The path for many people then was to graduate from high school and get a job at the plant, or in the manufacturing space, without a college degree. They would make $40K to $50K a year plus an additional $20K in bonus and overtime and retire when they were 45. Although we are one of the largest spaces for tech outside of Silicon Valley, because of product engineering and IT, people weren’t taking that knowledge and using it to become entrepreneurs or venture capitalists.
In Detroit, things really started to move when GM and Chrysler went into bankruptcy. At that point, people were like, maybe we will give these kids space to have their pitch competition, and people realized they weren’t going to have the old path in the future.Monica Wheat, managing director of Backstage Capital Detroit, and co-founder/executive director of Venture Catalysts.
So, for me, it was really getting them over that hump of saying, “Why the heck would I take a risk when I can go the tried-and-true path of what my dad, brother or others have done?” In my opinion, things really started to move when GM and Chrysler went into bankruptcy. At that point, people were like, maybe we will give these kids space to have their pitch competition, and people realized they weren’t going to have the old path in the future. In Detroit, we’re super proud of being the home of innovation long before Silicon Valley due to the automobile industry, but we got comfortable. I think now we’re on the path of being innovative and developing new products for different industries. Our residents, large corporations and investors see it.
Moguldom: You are now one of the managing directors for Backstage Capital. How did you start working with them?
Monica Wheat: I had been watching Arlan Hamilton, the founder of Backstage Capital, for a while. Last fall she was onstage at TechCrunch Disrupt. They announced she was going to be hosting a global accelerator in four cities. They already had Philadelphia, Los Angeles, and London and they were looking for the fourth city. When I saw the story, I was like, “I’m going to make the last city be Detroit.”
And when she was on the cover of Fast Company, the caption they used was “Venture Catalyst.” I thought, “This is a sign.” I reached out to her and told her I really wanted to make Detroit the fourth city. She was super receptive. She told me what they were looking for in a city and I think it was one of those things where we, Detroit, lined up across the board — being emerging, having tech talent, a lack of companies having been launched, the low cost of living, as well as a growing young population. We also had support, since I had already been working for 10-plus years in the venture and entrepreneurship ecosystem space.
I have a pretty nice roster of sponsors and partners. I reached out to about 10 of our top sponsors and said, “Hey, if I can get Backstage here, will you support us?” Every single one of them said yes. I was able to bring that to the table when I was talking to Arlan. Arlan and Backstage Capital made the decision a global vote. So, I tapped into that same network of supporters from all the programs we’ve done and asked people to vote for Detroit. We ended up with the most votes.
I had been watching Arlan Hamilton, the founder of Backstage Capital, for a while. They announced she was going to be hosting a global accelerator in four cities. They already had Philadelphia, Los Angeles, and London and they were looking for the fourth city. When I saw the story, I was like, “I’m going to make the last city be Detroit.”Monica Wheat, managing director of Backstage Capital Detroit, and co-founder/executive director of Venture Catalysts.
Later we found out from talking to the Backstage team (that) they already had a very high inquiry rate of folks who were interested in Detroit before they even knew that Detroit would be the winner. With all of these things combined, they chose us. I went in with the thought of just helping get them to Detroit, but as I was talking with Arlan and team, they asked me if I wanted to run it. I was like, “I’d love to.” And so, we’ve been going ever since October 2018.
Moguldom: The conversation often comes up where people who are VCs or are veterans in the startup community think that someone who hasn’t launched a multimillion-dollar, or billion-dollar company cannot successfully run a venture capital firm. This is usually what holds minorities back from being a part of firms. What do you think about this school of thought?
Monica Wheat: It’s a very common thought. I hate colloquialisms, but it’s true, “you can’t be what you can’t see.” If you don’t have people in your circle, at your dinner table or in your family or circle who have started companies or pursued venture or other forms of funding, you don’t know how to jump from worker mode to entrepreneur. You don’t know how to jump from entrepreneur to angel investor or angel to venture capitalist or vice versa.
Being an entrepreneur takes a lot of scary work. We are a small community of folks who are willing to take the risk. It takes a lot of information and a lot of relationships to make it work.
We are underrepresented by definition in the venture and entrepreneurship space. We just don’t have as many sources of information and ways to gather and benefit from the information or a pattern or an example to follow. And so I agree. This is exactly the thing that holds people back. But the truth is, just like we’ve seen 1,000 times over, whether it’s Techstars or other pop up accelerators, those people start from scratch. And that’s a lot of what Venture Catalysts does by working with people at different levels, from the very beginning level of teaching them about how to take a business idea to an actual MVP or something that draws revenue to helping them get investment or invest. The people come from all walks of life, from people who work in corporate jobs or people who are straight out of college who want to do something on their own. All of these paths are valid and viable. We’ve seen people be successful who came from all of those backgrounds.
Moguldom: Do you have tips for founders of color that could prevent them from making common mistakes you see?
Monica Wheat: A couple of the things that I see. I go to events and see founders of color automatically self-segregate themselves. A lot of folks feel as if they don’t see themselves and it’s not a black or brown focused organization, they won’t get value or feel welcomed. Nothing could be further from the truth. Most of the folks I work with are super open, but they just don’t have a diverse network. To be honest, sometimes it’s not part of their core values of pursuing one either.
I go to events and see founders of color automatically self-segregate themselves. A lot of folks feel as if they don’t see themselves and (if) it’s not a Black or brown focused organization, they won’t get value or feel welcomed. Nothing could be further from the truth.Monica Wheat, managing director of Backstage Capital Detroit, and co-founder/executive director of Venture Catalysts.
I have found that the folks who … try to find value (and) obtain advice no matter who’s on the board or in the industry are the folks that excel. I would love for our people just to be able to learn from anyone, whether it makes you uncomfortable or not. Try your best to walk into any room and to get every benefit you can get from that room. I think creating relationships is super, super, super valuable. And that’s why there aren’t as many underrepresented folks in these spaces. In the entrepreneurial world, everything is relationship-based.
Something else I see as a common mistake of people of color is that they will create a product or a company and automatically assume that the value of their product or company is that it is black- or brown-owned. That is not the value of the company, it is an enhancement, a feature. That lets investors know the grit and determination and the background of the founder. But you still have to prove why your product is the one that investors should buy into.
We know that companies that have diverse founders perform better, but it’s still about proving and providing value. You have to think, “How can I solve a problem nobody else sees?” Those are the things that are the great money-making and great business opportunities investors are seeking. Then you’re tapping into something they don’t have, and you can solve it in a way nobody else can solve. I really hope that black and brown founders and aspiring black and brown VCs will not kill themselves out of the game before they really get in there and try to learn and press and try and get something started.
Moguldom: What do the next five years look like for Venture Catalysts and your passion project, Digerati Girls, which teaches girls to code?
Monica Wheat: I’m super excited. We’re getting ready to go into 2020 with some brand-new programs. We’re excited looking wholeheartedly at innovating the way the ecosystems are built. One of the things we’ve had in beta for a while now is our venture fellows. These are people we train to run programs for us. We train them to run efficient and strategic programs that our ecosystem is built on. We’re doubling down on our national partners we’ve been working with for years and we’re super excited about new ones. The biggest thing for us is growth. In the next 18 to 24 months, we’ll see a lot more movement, because we’ve been doing a lot of that work behind the scenes while we’ve been running our program. I’m happy to see it come to life. The goal for Digerati Girls is to have 5.000 kids in Detroit learn mobile — get introduced to mobile app design. I’m excited about it and I’m excited to do more.