Black investors and founders are still vastly underrepresented in the world of venture capital, but there are signs of positive momentum. Take it from Brian Hollins, a founding board member of BLCK VC, a nonprofit helping aspiring Black investors get into venture capital. “I’m a glass half-full kind of guy, I always have been, but I fundamentally believe that venture capital for people of color is changing for the better,” says Hollins.
Consider the Black Venture Institute, an initiative created this year by BLCK VC, Operator Collective, Salesforce Ventures and Berkeley Haas School of Business to train Black executives in the fundamentals of angel and venture investing. The program’s first cohort of 50 participants graduated in November 2020, part of a goal to create a fivefold increase in the number of Black check writers in venture capital in the next three years.
Already, cohort graduates are out talking about deals and finding opportunities to build with one another, according to Hollins. “That’s what the Black community needs more than ever, is people that just build confidence in one another,” he says.
Hollins recently joined 500 Startups for a fireside chat exploring the evolving venture capital landscape for Black investors and founders. He brings unique perspectives to this conversation. Outside BLCK VC, he’s currently attending Harvard Business School, where he was selected as a Rock Social Entrepreneurship Fellow for his work as the founder of The Takeoff Institute, which connects Black undergrads to internships. Prior to that, he served as a later stage venture capital investor at Goldman Sachs.
Here’s a rundown of the key points Hollins highlighted.
Access to Venture Capital
The venture capital industry is already difficult to break into and the problem is particularly stark for Black investors: only 3% of venture capitalists are Black, with even fewer controlling the $100 billion invested annually in the U.S., according to BLCK VC. “You can’t just send your resume somewhere and expect to get a job in venture,” says Hollins.
Launched in 2018, BLCK VC is addressing that problem and trying to drive change. The organization seeks to empower and support Black investors, while increasing diversity in venture capital on different fronts. “We’re attacking venture and investing from all angles,” says Hollins.
This year BLCK VC created a program aimed at recent graduates, called Breaking Into Venture. It grooms participants for associate or analyst roles, covering how to build a thesis, market mapping and cohort analysis, among other areas. Meanwhile, the Black Venture Institute targets aspiring early stage investors who are later in their careers, focused on successful tech and finance executives. So far, the program has found an audience: over 400 people applied for the first cohort. “These were all people who certainly were seeing deals, certainly were seeing opportunities, but I think just didn’t really know how to do it on their own,” says Hollins.
Hollins focuses on the idea of ownership for the Black community. “I think going forward we have to find ways to take ownership back,” he says. “Ownership in venture means being on the cap table.” That’s something he’s pursuing as a scout for Lightspeed Ventures Partners, alongside a cohort of underrepresented investors, which enables him to invest on the firm’s behalf. “They’re giving us an opportunity to take that ownership, where I can write a check in the business,” says Hollins.
Not every firm has the resources to enable scouts the way Lightspeed does, but Hollins hopes this approach can deliver change. “We need to see more scouts, we need to see more people that are writing angel checks,” he says. It doesn’t matter if this only means cutting $1,000 checks. “What matters is that you’re starting to become an owner,” he says.
This should benefit the ecosystem overall, as scouts from underrepresented backgrounds can spot deals at an earlier stage than most investors. “There’s an opportunity for the venture ecosystem to start to see that there’s people that look like me and you that are better at finding companies,” says Hollins. “We have a better chance of getting to that founder before the thing is a 10X or 50X.”
Please visit 500 Startups’ Black Founders Hub for resources.
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