BLACK VC'S PLACING BIG BETS w/ ELLIOTT ROBINSON

more influential companies. So you might say, as an entrepreneur or a founder, UM, hey, you know, my goal is not to be some massive company. UM. I really just want to pursue my passion. You know, I really want to just um if I could change one life, UM, I've done my job. UM. I just want to make something that's right for you know, my family. And that's all great. But at the same time, the business community

needs you. We need your ideas, we need your hustle, we need your innovation, and we need you to create larger, more influential companies. UM. No matter what type of company you are, is it helps you deepen the capacity that drives your mission. UM. So as a visionary, as a person with an idea m n A can become an incredible growth strategy that gives more capacity, of more foundation to what your overall missions. I'm will Lucas, Mrs Black Tech,

Green Money. I want to answer this you to some of the biggest names, some of the brightest minds in brilliant ideas. If you're black in building or simply using tech to secure your bag, this podcast is for you. Elliot Robinson, his partner had Best of Me Invented Partners. He has fifteen years of international experience investing and partnering with world class entrepreneurs and the technology companies that they lead.

He spent six years focused on Series A and B investments, followed by seven years and county focused on growth stays, Series C, D and E opportunities. I asked Elliott about how cloud computing in the Asia COVID might accelerate innovation in stubborn industries. So I oftentimes like to to leverage

a quote from one of my favorite CEOs. You know, before I joined best Mer as a partner in twelve Ventures, which was Microsoft Global Venture punt and in that role, I was lucky to spend some time with Sashi Nondella, who's still the CEO of Microsoft, and it was probably

maybe like three months ago after earnings follower. During an earnings follower, Satia said, you know, we've seen more digital transformation decisions and initiatives being taken by our client base and customers in the last two months than we have

in the last two years. And what does that really mean. UM, that means there's been some kind of legacy industries that have bought software in a certain way for two plus decades, you know, on prim software where people still have to come to your premise, sit there and like swap out the CDs or download things onto your system. UM. But now with with you know, the proliferation of cloud computing, you can do all of that remotely. You can continuously

update and release new software. So when Satia says he's seen more digital transformation in the last two months in the last few years, what he's really saying is, you know, powered by UM, things like AWS and Azure and g CP, folks are just really pushing cloud software applications to the forefront, every every part of the stack, remembrastructure to platform to kind of the software front inside UM. So for me, you know, COVID has been an interesting thing because cloud

was already moved quickly. But now everyone's working from home. You know, we're working from home now, at least on the tech company side, we might be working from home like indefinitely or at least this remote first kind of work from home virtual world. So the areas that we're seeing, um, you know, a lot of movement is you know, we call it future of work, but what does that really mean.

That means, you know, people that are building distributed teams, startup founders in the ecosystem today, there was this thing where you know, you might have to move to a really cool city like l a to find, you know, talent that you can hire and build your team. That's not necessarily the case right now or the future. It's kind of been like that the last few years. It's been some companies that started that way. But now you can build a team be totally distributed. Just in the stakes.

You could have you know, headquarters quote unquote in l a Iron, New York, Austin. You know, there's some great tech clubs like Detroit and Atlanta that are really bubbling up. So there's a bunch of software tools that most startups need to help man, is that how do you do remote learning, remote sharing? Of course, I think we're on Zoom today, and you know, they just announced a bunch of new kind of integrations and tool sets to make you know, more of a remote office environment, UM even

more effective. So we think about things like future of work with productivity tools, UM, knowledge sharing tools, even down to the back office. That's actually one area that I'm really excited about. So companies that are dealing with UM international payroll, which is a space that we've been spending a lot of time, or distributed payroll, distributed hr UM,

distributed you know, accounting software. All of these things are now going from in office to in the cloud, and the whole definition of what is an office, I think is changing. The last thing I'll say on this this topic, UM knowing a couple of folks from the Afrotech team. One of the coolest things about afro Tech for me has just been as an outsider looking at the office culture. It looks like the most fun place to work UM

at the African American venture capitalists. I can go weeks without you know, necessarily seeing someone else that looks like it was a remarkable place. Often if I could work out of it's probably Afro text office, but now they're remote. So how do you take such a unique culture, UM. I think it's called like wind down Wednesdays or Fridays or something something really cool like that. But how do you pull that into zoom? How do you pull that into you know, like a hopping and environment and make

it cool, bring the music in, bring the culture in. Um. And I'm really excited about some of the opportunities that are coming there. It's in that respect, UM, how fast our companies growing today? You know, beat with the ability that the efficiencies that cloud computing provides. And how does COVID change that? So if you look at two years ago, how fast companies? How does that scale? Exceptional question? And you said two things that I'm going to pick on.

Not only are companies able to move faster? Uh and kind of a remote first environment if you're will in the hustle, you know, I actually think it's it's kind of a unique time. UM. For underserved founders. I don't like the whole underrepresentative or minority. I think it's a it's a trash term. We're just underserved. UM. So for underserved founders, I actually you know, you can take two

sides of the coin. From a funding perspective, it's always been tough for us, right um, and perhaps in a world where you can't necessarily spend time face to face teams to know people, that will be tougher. But from an operational standpoint, you can actually take a lot more meetings now. Um. You know, if I think about companies here in the Bay Area, in in l A. For example, when I used to fly into l A, I can only take three to four meetings a day because traffic

was crazy. I try to stay at Vennis Panta Monica kind of a hub, but I love places like Culver City. I still love West Hollywood, and it would take me forever to get around. Now with with Zoom and more of the remote work culture, you can bang out calls from seven am to seven pm any time zone. I'm on calls at eleven pm with my team and you're been tel Aviv. I started my day at six am with my partner in Tel Aviv. We've got you know, um folks in China. Now we've got two offices in

New York. So the whole idea of what your schedule looked like has changed. So typically where you are time constrained in a physical, face to face environment. All those things have moved. So again, picking on your first word of growth, I think you can you can take more business development, more potential customer pipeline meetings, and a way you could before. And then the second word that you use, I'm gonna pick on his efficiency. Um, so I think

everyone's business from like just a fixed cost basis has changed. Right, Like you know, you you might not need that office space. While it might be advantageous for you to have face to face time with your employees and your employee base to build that culture, maybe doing it remote is easier. People certainly aren't flying nearly as much last year. I think I logged like a hundred twenty nights and hotels. I'm I'm at zero. Well, actually I'm ethnically at like

a couple. Um my wife, I took a little bit of a vacation just to get a change of scenery. But um, you know a lot of the fixed costs that are in an operation are now changed. It's not that they're gone, it's just changed. So where founders may have raised a million dollars in their seed round or um, maybe a super angel around a year ago, and you

have these like fixed costs to build things out. Now if everything remote and your ability to hire and lower costs gels and cities where the talent pools are just as good or sometimes even better, you know you can pull that money out and you knows is under served founders. That's that's kind of like one of our skill sets we've always made more apt less. So I'm pretty excited

about some of those prospects as well. That's a great um t up to my next question, because it was seem that because of the scale and relatively low cost of cloud computing, um in the efficiencies that it provides, it would that startups may need less to do more things. Right. Um, but is that capital just being redeployed elsewhere versus how it would have historically been deployed against those fixed costs etcetera, you know, travel or those things because the prices aren't

necessarily going down. Yeah, that's a good point. Um. The way I look at it is, Uh, if you're cutting let's just say your annual budget for your startup is let's just say that salaries for a couple of people. Um, maybe you've reduced your office space or gotten rid of it. And if you've freed up just even a hundred brands out of your budget year over year in COVID versus pre COVID, there's a bunch of different things you can

do with that. Um. You know, what I've really liked is the whole gig economy has always been a thing, but I think in COVID it's even different. So you can try new things on the marketing side, on the biz dev side, on the pr side, that perhaps you couldn't have done before because you either needed it in how or you know, the business has been working a certain way for a couple of years, so a smaller business couldn't have got the attention of a marketing or pr um kind of shop in the way that it

can't now where everything is discerned mediated. So I think it's it's down to the business. To your comment of prices haven't come down, that's certainly the case because everyone is trying to meet their their top line revenue goals. So while prices haven't changed, the one thing I can say is negotiating terms have changed. So in this world have been certainty. There's a lot of software and cloud software tools that said hey, this is a minimum one

year commitment. A lot of things have changed in COVID where they said, okay, well, everyone's business is kind of up in the air. You know, why don't we give the first three months away free, or why don't you sign up for a year, but you don't have to pay us anything for the first six months. We just want to keep you locked in UM. If you're on kind of the accounting or controller side of a business, as as some of these software licenses come up to renew,

a certainly be thinking about, you know, renegotiating. I'm never gonna tell you that you know hard renegotiating and think you're gonna get fifty off. But you know a lot of companies that weren't potentially working UM with customers a year ago, and in COVID there are a lot more

open to negotiating. So not just the fixed costs that have come out during COVID of of being virtual, but even though those same kind of virtual class software tools I've talked about, and you're I've been discussing, you can go back to the drawing board and say, hey, beyond just a ten or fifteent haircut until things get back to normal, maybe we can change some of the payment terms, and that's another way to kind of extend your your

cat lun way. So let's think about like prices coming down from a different perspective own, because I'm not a VC, but it would appear to me that you know, buy in to get in on these deals hasn't come down either with regards to you know that capital being more flexibly UM deployed. So how how can you how do you read that? Look, we're not doing as much you know in these FI cost these travel expenses, you know, UM,

but the prices of getting in on deals hasn't reduced. Yeah, there's this weird macro thing that happened, and it's really a dual side of equation. So one UM, the last six to twelve months, more capital has been raised, are bigger funds have been raised than ever before UM. And then the other thing that happened on the other side of the equation is unfortunately in COVID there's a lot of businesses that were impacted, but it's super VOLADI. So what I mean by that is UM an aggregate businesses

are just dealing with uncertainty. So that means there's less companies that are still either hitting plan or beating plan. So on one side, you've got more capital that needs to go into these companies than ever. On the other side, you might have it's not that like companies are failing, but you might have a smaller basket of companies that are really thriving in COVID who would be either figured

it out. They might be in a market or industry vertical that's actually got a COVID tailwind versus a headwind. So there's more capital than other going after a smaller subset of opportunities. Therefore, you know, just to find demand. The prices have come up um, but look at the end of the day, like valuations, um, they're certainly meaningful in every company's like every entrepreneurs, like every term early team's life, because it has to do with delution in

your own equity and what you own. What I would really be advising founders on is and this doesn't necessarily change in COVID. But if some of the funds that one spend time with you pre COVID, now all of a sudden one has spend time with you, like you need to ask yourself why that is and that could

be on both sides. That could be they think you're um, you know, you're seeing some COVID headwinds and now it's like a good opportunity to get in cheap or cheaper than they think it would be, or you're really seeing some tail winds and now they're all over you. I'm just like a very values based person. So the question is if they weren't spending time with you when things were good, like you know, perhaps that's not the right fit for you and your company and your your core

founding team for the next two or three years. Just really try to think about that fit and we're also The last comment I'll make on this is we're going into a really unique time in this country. Has been the craziest year I think all of the experience, certainly in my adult life, and all that means is uncertainty, and every kind of CEO and sea level are co founding team is thinking about, you know, what does the next six months look like for us, and that that

impacts everyone's business. So I think, you know a lot of founders are just you know, trying to stay conservatives, stay the course, but also be flexible as the next three or four months are gonna be really um follatl when it comes to change. Is it possible startups maybe taking more capital? Do they need? Oh? For sure? All right, well, actually let me I hate that I answered that so strongly. I'm not sure if it's a fore shore, but it's

certainly proving. Um you know, I think I had written a tweet a week or two ago all caps are saying why is every company in America raising right now? And it actually is my last comment, which is why we're about to enter a period of uncertainty that we've never seen. Um So, if you're a company that's performing relatively well to plan or or even beating it, why not do it now before we enter into this kind

of desert of uncertainty. Um So, I certainly understand that, but I will make sure I address your question, which is, do I think companies are raising too much money? I think some companies certainly are. Um there's this mentality um and and just kind of a behavioral norm that happens when you raise enough capital to have twelve to maybe eighteen months of cushion and you can just crank that business out. You're thinking about efficiencies, You're always thinking about

your balance and your bottom line. Where sometimes if you raise so much capital ahead of plan, you know, not only are you sitting there thinking that what am I gonna do with all this extra money I raised, but your investors are also thinking, well, look the I R our clock is still ticking on my money that I gave you. I need to generate a return faster. So now we we start adding onto fits and variable costs at a rate that wasn't necessarily the original plan. Right.

And then you know the term that I always uses. I never want to put a founder or an executive team in a position and of doing unnatural things. Um, you know, an expel plan is just numbers and excel. But if your balance sheet is now boosted to a point where you know it doesn't reflect the plan, now now everyone feels it's pressured to change, and that's not good for either side. Or be black meals seeing people of other ethnicities and backgrounds realize the value of our sauce.

They capitalize what we create, they monetize the culture we move as a creative I'm interested in the take of a VC like Elliott on how we as the global leaders and was Hadden music, fashion, food, sports and more might finally be able to realize the reward in the marketplace for the ideas that we bring to the table. Elliot Robinson speaks on it. So I'm gonna take a thirty thousand feet and then probably go down to like ten thousand maybe and on the street level, UM, I

think thirty thousand feet view. UM. What I'm really excited by is the growing number of enterprise software and cloud software opportunities that I'm seeing founded by UM, not just black founderis, but UM latin X founders and women founderis. Traditionally, for whatever reason, it actually makes a lot of sense. UM. At least the last five to ten years, a lot of the start up opportunities have been focused at UH consumer opportunities because while founders that look like me and

you are underserved, you know, consumers are underserved. Right, there's this this age old adage. You know. I started my career to all black venture firm in DC called Singcom Venture Partners, and we were the first investors in bt SO, first investor in bt UM. You know, Bob Johnson says all the time that's Sincom and HERB Wilkinson exists, b T one exists, we're the only investor who served the board from first investment until it was sold to Viacom.

And then you know, in the middle of that, we invested in Kathy Hughes who started Radio one in TV one all right. You know a lot of people said to us, well, there's already b t like why on earth would you invest in radio one TV one, And we said, dude, I mean, you know, we're talking about fifteen million people and you give them one channel and then we got three hundred channels serving the rest of

the communities. Doesn't make any sense. UM. So you know, I think historic lee because our consumer base is seen as one very homogeneous, which it's not. There's all different types of lanes and tide of the black consumer opportunity. But because we're under served, there's just so much like

clear obvious opportunity to go after the consumer market. But I think in the enterprise space, you know, it's it's like it would take a whole another zoom to really break down my views on on UM why we're just naming these opportunities and these on noors now. But I'm really excited by the diversity UM that's influencing kind of cloud and enterprise software. And that's where I as a cloud investor UM and spending my time now on the

on the later stage investor. We can talk about that a little bit, but you know, I I spend a lot of time with the early side, even down to the seed team of going through all the lists of UM kind of black and brown founders going after enterprise and make sure that that vessels meeting with UM and making sure that we're we're funding. We just funded one that we haven't announced yet, which I'm really excited about

coming around, but one is certainly not enough. UM. You know, we don't have a set number, but in my own mind, I've got a number of where I'd like to see the portfolio go and I'm really excited about that. On the street level, UM, you know, I just I think that we and then this is gonna I want to make this very nuanced. I think that one thing that has to change on the street level is like we as a UM underserved entrepreneur base and underrepresented investor base,

we just gotta think bigger UM. And And that's like a really nuanced thing because sometimes people hear me say that and they take it the wrong way. I'm not

saying that we're not thinking big now. It's just that, um, many times we're just trying to get from point zero or point nega in one because the whole industry is backed against us to like getting through those first blocking and tackling, and we got to do that right, Like, we've got to focus on getting out of the blocks, um, you know, getting the business up, getting the first customers,

getting the first users. But sometimes we focus so much on that that we don't think about how big of an opportunity we are, not just on the consumer side, but enterprise technology and now even on the frontier tech side. So I think on the street level, I spend a lot of my time even with early stage entrepreneurs that as a growth investor I can't invest in now. And when we're tweaking the deck, of course, the blocking and

tackling has to be there. How are we going to spend the first million, how do we get the m v P of how do we get the first paying customers? But oftentimes we leave out the big picture of how big of an opportunity all of these things are for us. Um, you know, I will really feel great when we're not just talking about the first um Black entrepreneurs at raised ten million dollars, but the first exit for a billion

foot and it's coming. I'm just saying that sometimes you have to um speak it into existence and also reverse engineer into that success. If we say that every time we raise a million dollars, we're looking at a half billion to a billion dollar opportunity. You know, if that's letter Z and we know what letter A is, let's let's really map out the letters in between all I'm saying, and sometimes we um we underestimate how big of an

opportunity all these things are. So on a street level, That's where I spend a lot of my time, particularly working with early stage founders that I'm just not positioning to invest in yet because I want to see them get there to that billion dollars, that Series B, Series C.

Still thinking about that billion dollars bus opportunity. I love that we're having this conversation because you know, we don't have this conversation enough at at this high level of you know, in late stage investing, because it's so hard to get capital in the first place, and for for black founders and to that in that regard, what has to happen in our ecosystem for more black founders to get to Series A, because getting that seed is difficult.

But you know they're we're out here in the in the seed stage getting the Series A and been beyond that. I mean, it's there's very few of us in that regardless. So what has to happen in the ecosystem for us to get to Series A? See more of us as Series A and get post. Yeah, it's a complex question and discussion. I mean, look, the reality is for more black founders to get to Series A, the venture capital

industry has to change, like dramatically, um. And that is not an excuse for um, you know, underserved founders to not get to Serious A. But this is a conversation I have internally here at the fund and perhaps even more importantly with our l fs, so our limited partners at invest in the State. So you're saying that the the entrepreneurs are here that are capable, oh one thousand percent. I mean we're actually like this, man, Like I don't know how much time you have. It is something we

gotta break down. So like, if you think about the last six months of conversation, UM, the unfortunate events of uh, you know, George Floyd and mont Augury, Brianna Taylor, it goes on has created this um uh kind of this movement of of venture capital trying to figure out like

what are we doing wrong? Like why are these founders not getting fun to at levels Bestimer included quite frankly, and um, the one thing I was just writing and tweeting about this uh this week, like the black founders are the most over advised, over cohorted, over mentor and over office our folks in the world. And sometimes it's like, hey man, we just want to lose your money at the same rate all of our cockade and college capital by design is kind of a sort of our investments

either go sideways or are lost. And many times those same founders that lost your money into or three years come back to the table and you give them money again because they learned. So again that doesn't that's not saying that they're not good founders, but the question is how come we're not being given that same kind of opportunity and credibility. So yes, to your point, um, the

founders exist actually an overabundance. The problem is that, um, it really takes like a bit of a hearts and minds longer conversation inside of the industry to say, like, why don't we treat people equably? Right, Like, that's a conversation that has been going for a long time, but I think in it's certainly been pulled to the forefront and then taking a step back, I do think there's a lot of responsibility that goes to limited partners or

what we call LPs. So just to be clear, you know, as venture um investors, we manage for the most part, other people's money, and that can behind net worth people, celebrities, family offices, but for the most part it's UM kind

of state and federal government funds like pension funds. And if we just kind of focus on California, I I can I can say um with some some pleasure, I'll be it measured um that California has kind of been on the forefront in terms of diversifying the way by which they allocate those funds, but it's still kind of less than one tenth of one per cent. You know, US LP dollars goes into the hands of venture investors that look like the entrepreneurs that we're talking about, So

they're just like a fundamental mismatch. However, if you think about a state like California that's super diverse, I don't know what the exact number is, but I think it's like roughly thirty two or thirty three of the pension fund dollars created to then be put in the hands of venture investors are created by black and brown people. So like it's it's weird, like Robin Hood story and reverse.

Where we create the dollars, it's then allocated for private equity and venture capital then not allocated to the people that, um, you know, represent how the dollars were created, and then wealth creation is created in other communities. Like you really got to take a second and like think about how crazy that is. So it's not saying that like, oh, there are dollars because they were created off of the hours and the careers of people that look like us. But it kind of is at least that's that's the

mentality and philosophy I had. So I know we veered off, but it's just to say that, you know, I I just I think that, um, not only are our entrepreneurs over mentor, but many times even our investors are over mentor and over courted. Cohorted. I'm really excited by how many new faces and backgrounds are getting into the venture

capital and investment game. But what I fear again is when I look at UM, many of my colleagues who are needed industry that don't look like us, like, how can they don't have to go through all these coops, you know to get allocated dollars. A lot of these people come from non traditional backgrounds, have never invested before, maybe it invested in the firm for a year or two, and now they're off raising big funds UM, and unfortunately,

we're kind of put in a box. So you know, I think I'm hoping UM turns into a bit of a paradigm shift or a watershed moment for both underserved investors of color and certainly in entrepreneurs because where you started, like, we're there in abundance. We just have to be played by an equal set of rules as the folks that don't look like Yeah, and I know the numbers like less than a hundred and it might be something like

seventy five. There's seventy five black vcs who have check writing authority UM in these firms, and my friend Richard Kirby put out of numbers at those went to Harvard or Stanford, right, and so you went to more house. Yeah. Um, in how do you even get more black vcs in the door when a the successful vcs have previous operational experience? Um? Are they over index when previous operational experience and be many come to the table with a check? Yeah for sure. So, um,

you said a bunch of things there that are really important. Um. You know when when all of the unfortunate events that we referred to happen kind of March April may beyond,

it happens to us all the time. Unfortunately. UM, I saw a lot of my venture capital peers open these office hours, right, they said, like, oh, I'm gonna dedicate um, ninety minutes a week for the next six months to meet with founders of color objectively A good thing because typically like we want to make it into their calendar. So what I did, I said, Well, I talked to bounders of color all the time, right, Like, just by the nature of who I am, my networking, what I

care about. The question is, you know, how can I impact the industry as one of the few black partners at a at a large venture found with check writing authority. I kind of flipped it and said, Okay, well, I'm going to do office hours ninety minutes twice a week and speak to any venture fund in the country that doesn't have a black investor to really talk through why don't you have a black investor UM and what are

the benefits of having a black investor. Venture capital, by definition is about um making non consensus investments and really high performing and high potential entrepreneurs. So, you know, referencing my my dear friend Richards analysis, it's the same thing that we talked about or I talked to my partners here investment, which is if we hire another Caucasian male from Harvard and Stanford, like, what's the r O I partner with that profile? Like if we don't have those

networks covered already, then we're not doing our job. So I'll say a couple of things. And this is kind of the framework of the discussion of these ninety minutes. And I think I've talked to now forty three firms, and I'm gonna be putting out at the end of the year kind of a medium process and slides around best practices, but I'm gonna cherry pick one thing that talk to these firms about, which is um, my entire career, uh, having interviewed with probably twenty five firms you know, at

different points of my career, outreach outbound. UM, this term of like cultural fit has always been a big thing. It's actually I can't stand it. Um, you know, I don't bring this up. Yeah, I don't fit the culture of venture capital. And I guess technically most bounders that look like me and you don't fit whatever culture of their portfolio, their typical investment. So UM here a bestimer,

particularly on the growth fund side. We've we've totally built in a new hirent philosophy and process and it's something I talked to all our venture peers out, which is, um, cultural fits gotta go right, that's out. Um. What I really care about is values fit and values ALIGNE not just with the founders, about my colleagues. And I think if you take a step back and you do some work to figure out, like what are the values that define a really good investor at your firm or in

my case at Bessemer, that's a different conversation. And when we're hiring and when we're interviewing these people, if I'm aligning for values and I'm not talking about you know, do you wear all birds are better? Yeah? I mean all birds are attracted to you. Um I wear Jordan's to work every day. That's hey, now I can pick

my foot up right now, you'd see. Yes, I just uh scored those new bladers on the sneakers atmosphere and I woke up early at seven as I've been taking l on the sneakers app By the way, you should invest in Nike and make them fix the sneakers at right if I if I would, I could. Um. So, we we eliminate cultural fit. We bring in values fit and score candidates on them, and then what we substitute

in is um something we call cultural ad. That's been probably like the most um lightbulb moment for most of my close friends who work at heear firms of mind, which is like, oh shit, like we've never actually thought about that. I don't really care as a venture capitalists to go deeper into networks and patterns that we know. We talk about pattern matching, but like the way we generate outside of the urns is the pattern matching places

that we aren't already. Um So we talk about cultural ad and if you really do score people on cultural AD and this goes for entrepreneurs in your portfolio as well, you really start to ask different questions. You know, what is it unique about your background? What is it about your perspective, your experience that you bring not just to the portfolio, but but um, you know, in my case, to the investment team. And I'll add into it here. So I did go to more House. Um, I'm from

small town rest in Virginia. My brother went to HbCO at Hampton and both my parents were the first integrated class Advanderabile. So education is a big thing in my family. It doesn't mean you have to have unque traditional education to be a great startup founder. Um. But you know, I think what I bring to not just Cestimer, but any firm um that I've worked at, and probably the broader venture capital industry is just a different perspective, you know.

And then on on like the the venture capital side we do, you'll hear firms talk a lot about UM learnings from the community, which is like putting functional leaders CEOs, head of sales CFOs from throughout your portfolio of you know, ten twenty in our case, over two companies together and

pulling out best practices. But many times if your founder base isn't diverse, like there's an exchange of learnings and perspectives that like are just being doubt And not only does that damage UM or leave kind of opportunity on the table for underserved and underrepresented founders, but actually it leaves opportunity on the table for the folks in our portfolio where they don't get to see our perspective as operators, Like you can't tell me we we don't hustle more

than anyone else. We've had to our whole lives, Like we've always been told by our parents, you've gotta be twice as good as everyone else just to get a fair shot. Um So, in terms of like we're underinvested, but we still are expected to generate the same return.

There's like an exchange of learning that that even across the portfolio, UM, we don't get So the last thing I'll say on this, you know, um you mentioned that the statistics semi five percent or I'm sorry lesson semi or seventy five in total venture capitalists have stec riding authority. That is very true, and I actually think the the number might be um way smaller than seventy. Uh it's check writing authority means different things to different people, but

luckily the numbers is uh slowly improved. You put up a tweet a little while ago that I thought it was amusing. But at the same time, you know, it'll make sense why it was a shame to me in a second. So you said, VC right now is basically a never ending episode of ninety day fiance. Tons of online dating, mostly people you've never met, who don't need

to share much because they have multiple rings already. And while that was amusing, you know what the part of it and you're saying and you said you ended it with and hoping they pick mine. And so what I thought was unfortunate about that is when you see our counterparts are white, you know, entrepreneurs and etcetera, who may have all kinds of term sheets on the table, and they're just trying to fix you know who they like better,

you know which terms they like better, etcetera. So they're interviewing you and more than you're interviewing them to give you to give them me when we come to the table, we're hoping Elliott picks us to invest in, and we have way less in in too many cases, way less um leverage to get deal terms that are good for us. And so while it was amusing, you know, I thought it was also a shame that we don't come to the table with the same you know, hutzpah as as

they might. And what's your response to that? And how do we make Elliott And this is no disrespect to you, but how do we make you less the prize and the startup the prize? Yeah? Sure so. UM, what's interesting about that is, Uh, the startup that I've thought about the most, probably the last month, UM is a startup led by a dear friend of mine, you know, is an African American founder. UM. I can't talk about it just because I don't want to steal the thunder of

the company. But they're out raising UM, they're Series C now, and it was that dynamic. UM. He had multiple offers on the table UM and two of them were unfortunately just kind of higher than I could go on price. UM. And like that's the worst situation actually because to your point, like that's not always the dynamic at the serious C or D stage where there's another black founder on the other side of the table. For me, I'm sitting there, like, talk to my wife about it, I talked friends about

I said, what do I do here? Like the market is so crazy and the business is performing really well, and I've I've actually known this founder now for four years, talked to him off cycle. Um, you know, I hope he hears this or he'll be laughing at the same time. We're texting on the plane and I just couldn't get there on price. So I'll say this. That influences that tweet a bunch, But it also makes me really happy because if that is the dynamic for him, then I

know the pipeline is coming. UM. Unfortunately, pattern matching at the Series C is very different from pattern matching at the SEE or the Series A, Like that's the unfortunate challenge at the SEA, Like, there's more data to work with. You know, there's paying customers, there's revenue there, and I think, you know, it demystifies this disconnect between UM black and brown founders and the majority of the industry which doesn't look like them. So just so so I make sure

I address your questionnaire comment. I think that I think it's getting better. You know, when I when I You know, I talked to Richard Kirby a lot. He's my closest friend and adventure and oddly both of our wives went to high school together well before we ever other, So I talked to him a lot. I talked to him

last night enough. Um, you know, he spends time more time in the early stage and when we do text, like we'll talk about some early stage hot deals that are led by founders of color and the dynamic is way different than it was um ten years ago. Also shout out Austin Clements at Sawston and in l A. He was tweeting about this other day, which is like back in the day, you know, particularly and underserved founders like you felt like you heard about every deal, particularly

a few are black venture capitalists. We're now at a place where I don't, which is like good and bad because I want to hear about everyone. But it's also good because the industry has expanded to the point where it's not just like the same ten or fifteen or

maybe even twenty folks that you talk to. It's actually more like fifty two hundred and that that bleeds over to like, you know, sports and entertainment, where they're getting into the tech game, or they've got kind of advisors and venture capitalists and angel investors that represent them, and it's kind of increased their umbrella. UM. In terms of

how do we get it there? I hate to throw this answer out again, but like there's just a continuing hearts and minds come with station that has to happen really inside of the venture capital industry. UM. All in the answer here. You know, I write and speak a lot about this thing called diversity theater. UM. It's something I've written about for a really long time. You know. The statistics came out about I think it was Q

three Venture funding UM. And from a diversity standpoint, there's all these like tweets going out and right and going around and mentoring and all that, but the numbers haven't shown up. What I'll say about that is it's unfortunate, but it takes some time, Like it takes time to actually connect from these office hours to getting to know your business to making the investments. Unfortunately, those decisions are made slower when it comes to us. UM. But I am you know, I have to hould that book at

the next quarter. She is different, But in terms of diversity theater. Um, you know all of us have been in this place, you know, speaking personally about my venture career, and then you know, projecting some of the conversations I've had with black founders where you know pretty quickly whether someone just kind of bullshitting you on this diversity thing, right, like we're happy to meet with you, but like you didn't tell you you mentioned something around like um operating experience.

I'll just put it in my example. As I was going through my career, I used to always I'm from Virginia. Right, we use this term called better rock, and that's the term is better rock. And what that means is I'll put in my own experience. When I was interviewing for venture roles throughout my career, you would show up and the job description would say you need to have x

y z in order to get this job. You would have x y Z and then they throw a rock and say, go get letter D. It wasn't on the job description, but like, go get letter D. Then you go get letter D. You come back and they throw that rock and they say go get letter T. Right. And I think that happens with founders to where they you know, a venture Bungle put on the website this is what we need to see to make a seed

investment or serious investment. And you're looking at your debt, you are a product some of your early tract and say, man, I've got all that, and then within fifteen minutes they're telling you you need to go find something else. That's when you should know, and that's when you don't want to go affects that rock. So we've got to we've got to get to a point as an industry where we stopped throwing that rock. And fortunately, I think the

community is talking about it enough. Where as as the faces become more diverse and check writing authority, you know where to go. But there's actually some um faces and venture that don't look like us that are making these bets, treating people efitably, and we actually need to like elevate them too and and speak about them because those are the folks you want to spend the time with. Don't don't waste your time infection that rock is the answer to create our own firms. I think it's both um

and I'll tell you why. And then that's a great question. So UM, as someone who's been doing this fifteen years, I started my career to all black firms. Still today the largest black interer firm in the country to ever exist. Our Fund five was a two seventy five million dollar fun um, so a huge part of the equation is

certainly starting our own firms. However, until the LP community um expands the aperture, my big fear, having started my career in Series A and Series BE and seeing successes there is you know you, um, you kind of cross that chasm of a Series A, Series B founder of color, and then you show up in the series C and it's like, well, who's here to talk to you? Like who who can actually right that twenty thirty million dollar check? That world gets real spooky um. And I can say

that as a dedicated effect on the investor. You know, we talked about people with check grunting authority. I can name three um black venture capitalist later stage that I know who have checked writing authority. That's like three um. So you know, it goes back to that tweet and this experience I had with my dear friend who thank thankfully he's about to announce his seriously investment or his seriously around Like you feel that pressure where it's like damn.

Unlike one or three people that can write that check, I can't write all of them because like there's a larger pipeline. And thankfully for him, he got an exceptional deal and a great investor around the table. So I think, yes, it is very important that we um master our masters and determine our own faith. But unfortunately the LP community is very happy to back us at kind of this ten million to maybe forty million dollar fund size level. Now there's been a couple of breakout successes. Um. You

know it kind of like fifty to level UM. So it's it's expanding, um. But for someone like myself, like my average check right now, however, somewhere between like thirty and fifty UM, And we've got to make sure that we've got people that can treat entrepreneurs effortably through the entire lifestyle. Um. Again, all the seed stuff is bubbling up, has been the last ten years, particularly the last two series as has certainly gotten better. UM. But man, it is a it is a ghost TM for me when

I go to growth stage confidence. But I know it's coming right, Like if you know the investors are there in the seed in the A and they're raising their bees. I know as they come to the seed, I'm hoping that I'm uniquely positioned to see all um and hopefully support those entrepreneur business scale h Black Tech Green Money is a production of Black of the Afro Tech in the Black Effect podcast Network and I Hired Media. Was produced by Morgan Dabon and Me with Lucas, with additional

production support by Sarah Ergon and Rose McLucas. Special thank you to Michael Davis if Ne's Serrano. Learn more about my guests, other technis reppers and innovatives at afro tech dot com. Enjoy your Black Tech Green Money. Share this with somebody, Go get your money. Piece of love.