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Speaker 1: Afro Tech twenty seventeen, San Francisco, California. Jule Burke Solomon

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Speaker 1: is on the main stage speaking with Angela Benton, who

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Speaker 1: was today founder and CEO stream Lytics, about her company,

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Speaker 1: part Pick, which had just been acquired by Amazon. Angela

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Speaker 1: asked a question that's critical, It may not be obvious

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Speaker 1: to most getting acquired. It's a lot about the team

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Speaker 1: you've built, not just a technology. The company who's buying

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Speaker 1: you wants the talent you've attracted. That's a core part

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Speaker 1: of the value they want to purchase. So to become

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Speaker 1: a valuable company, how do you attract the kind of

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Speaker 1: talent that can first build something great and second become

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Speaker 1: a marketable asset in and of itself. The first step

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Speaker 1: was kind of leveling up my understanding of what I

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Speaker 1: would need. So it's hard to reclude people if you

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Speaker 1: don't even know what you need. UM. So I needed

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Speaker 1: to figure out, Okay, who are the people that are

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Speaker 1: building this type of technology, what is their skill set?

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Speaker 1: What languages did they know? Um? And once I figured

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Speaker 1: that out, then I went to those meetups and went

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Speaker 1: to those events so I can meet those people. And

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Speaker 1: a lot of it had to do with being able

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Speaker 1: to craft a story that was interesting to them. So

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Speaker 1: I was really trying to refine the folks that I

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Speaker 1: was looking for, and then when I got in front

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Speaker 1: of them, being able to tell them a story about,

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Speaker 1: you know, just the same thing I told you about

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Speaker 1: my grandfather had this problem. I'm an expert in this industry.

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Speaker 1: I mean expert. I've worked at the company for a

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Speaker 1: year at that point, but you know, expert ish, and

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Speaker 1: I wanted them to realize that I'm I'm really serious

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Speaker 1: about this. I'm trying to build a great company, great technology.

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Speaker 1: I don't want you on board. And it worked surprisingly.

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Speaker 1: I mean, at this time you're talking about I was

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Speaker 1: twenty three years old, so a lot of what I

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Speaker 1: did was I just didn't know any better, and I

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Speaker 1: was just kind of fearlessness. Yeah. Yeah, So I really

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Speaker 1: was just like, this is a great idea. I know

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Speaker 1: it's gonna work because I can see it every single

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Speaker 1: day in my job, you know. I think the story

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Speaker 1: was compelling to folks, and they were interested, even so

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Speaker 1: much so that one of the first kind of breaks

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Speaker 1: I got was I competed that tech Crunch disrupt and

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Speaker 1: people saw that video and reached out to me and

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Speaker 1: we're like, Hey, I'm really interested in this problem that

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Speaker 1: you're trying to solve. I don't think you've raised any

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Speaker 1: money yet, but I just want to work with you.

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Speaker 1: And so I was able to get free labor that

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Speaker 1: way because people were just interested in the problem and

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Speaker 1: hadn't seen a solution. It was folks who were kind

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Speaker 1: of tinkers who were like, I need this, so I

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Speaker 1: want to help you build it because I need it.

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Speaker 1: I'm well Lucas and this is black tech money. I'm

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Speaker 1: gonna answer to some of the biggest names, some of

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Speaker 1: the brightest minds and brilliant I this If you're black

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Speaker 1: and building are simply using tech to secure your back,

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Speaker 1: this podcast is for you. Low Tony is the founding

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Speaker 1: and managing partner at Plexo Capital, which is an institutional

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Speaker 1: effect Smith firm He incubated and spun out of g

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Speaker 1: V Google Vengeance. Vcs need to go outs of funds

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Speaker 1: just like startups do. To raise the capital they can

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Speaker 1: deploy the other startups, and I don't think we talk

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Speaker 1: about that enough. They do the same thing they pitched.

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Speaker 1: They execute on ideas or a thesis. If I may,

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Speaker 1: when raising a fund, what is similar about the function

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Speaker 1: of being a VC and operating a startup. At afro

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Speaker 1: tech World one, I as low Tony the best person

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Speaker 1: on the planet to provide a worthy inc. There are

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Speaker 1: a lot of similarities. That's a good observation. We think

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Speaker 1: about it all the time, both in terms of how

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Speaker 1: we operate and communicate the message of Plexo capital, but

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Speaker 1: also what we look for in other early stage firms

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Speaker 1: and general partnerships that we want to invest into. So

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Speaker 1: if I were to think about my job as an

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Speaker 1: investor into companies, then there are certain things that we

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Speaker 1: would look for. We look for the market size, we

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Speaker 1: look for the problem being solved. We take a look

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Speaker 1: at the solution and how it fits with in the

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Speaker 1: overall competitive landscape, and most importantly, especially at the early stage,

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Speaker 1: we look at the team as well. And then in

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Speaker 1: combination of all those things, kind of one of the

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Speaker 1: things that should surface is what is it that makes

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Speaker 1: this company really unique? What's their competitive advantage? And I

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Speaker 1: think that applies to the world of investing as a

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Speaker 1: limited partner when we look at gps that we're interested

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Speaker 1: in backing. GPS are the general partners that lead venture firms.

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Speaker 1: If we're looking at a new fund that we'd like

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Speaker 1: to consider, we think about the opportunity that is going after.

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Speaker 1: Is it thesis driven and is it taking a certain

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Speaker 1: approach around let's say enterprise software and the opportunities within

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Speaker 1: that market, or is it taking a geographic approach kind

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Speaker 1: of what's the positioning of the firm in terms of

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Speaker 1: how it's going to deploy the capital. And then we

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Speaker 1: look at the gps. What's their track record, what's their experience,

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Speaker 1: what are the entrepreneurs have to say about working with them,

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Speaker 1: what other gps have to say about working with them,

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Speaker 1: what do their LPs have to say it? We take

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Speaker 1: all of that and then we think about, Okay, what's

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Speaker 1: the unique advantage that these gps will have that will

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Speaker 1: allow them to win the best deals. So there are

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Speaker 1: a lot of similarities between investing as a general partner

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Speaker 1: into an entrepreneur, as there are as investing as a

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Speaker 1: limited partner into general partnerships. What what is wildly different

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Speaker 1: versus investing directly into a company versus investing it into

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Speaker 1: a fund. Yeah, here's the thing that I think is

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Speaker 1: wildly different. When investing into a company, the risk is

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Speaker 1: isolated into two kind of one point of fault. Right

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Speaker 1: there is the company itself, the the entrepreneur of the team,

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Speaker 1: the market they're going after. But basically the risk is

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Speaker 1: isolated into that one investment. Investing as a limited partner,

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Speaker 1: it's a little bit different because what I'm doing is

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Speaker 1: as a limited partner, I'm basically investing into the bank

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Speaker 1: account of a general partner and they've got a blank checkbook,

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Speaker 1: and so I really don't know the investments that they're

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Speaker 1: going to go and make. Right, they'll tell me a story.

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Speaker 1: I can look at their track record, I can look

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Speaker 1: at past investments they've made, but at the end of

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Speaker 1: the day, the risk is a little broader, So you know,

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Speaker 1: it definitely takes a little bit longer in the diligence

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Speaker 1: process investing as a limited partner as opposed to investing

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Speaker 1: as a as a general partner. So you're specifically focused

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Speaker 1: on helping minorities get into this space. As a byproduct

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Speaker 1: of that, we're like, we're not all coming from Silicon

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Speaker 1: Valley or Stanford, you know, and in many cases, you know,

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Speaker 1: you have to do more to cultivate that crop of vcs.

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Speaker 1: And if I understand correctly, so is there a strong

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Speaker 1: pipeline of black and black female vcs too to be

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Speaker 1: able to come to LOW and say, hey, we got

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Speaker 1: the right stuff. Absolutely. We track about thirteen to fourteen

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Speaker 1: hundred firms globally and we've had a touch point with

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Speaker 1: close to five dred of those folks, and there's a

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Speaker 1: strong mix of black general partners within that set. They

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Speaker 1: have the capabilities, the qualifications, it's really often just a

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Speaker 1: matter of getting the opportunity, kind of getting that first

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Speaker 1: entity or person to believe in them, to back them

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Speaker 1: to go out and invest. What we've learned is that

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Speaker 1: it is important also to have a little bit of

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Speaker 1: a different approach in terms of evaluating a general partner,

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Speaker 1: especially when it comes to track record. So I think

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Speaker 1: we're fairly flexible. Obviously, if someone is on a Fund

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Speaker 1: two or Fund three, we can look at fund one

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Speaker 1: or fund two performance. If someone is coming out of

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Speaker 1: a shop that allows attribution, they're leaving a larger firm

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Speaker 1: to go start their own venture firm, hang their own shingle,

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Speaker 1: we can look at their track record from that firm,

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Speaker 1: if the prior firm allows attribution, or we can help

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Speaker 1: the GP piece together what their track record was at

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Speaker 1: that firm and what their role was in the deals.

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Speaker 1: Did they help the source the deal due diligence, did

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Speaker 1: they lead the investment, did they take the board seat.

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Speaker 1: We'll even look at prolific angel track records or folks

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Speaker 1: that spin up SPVs. You know, I think all of

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Speaker 1: those components allow us to be a little more flexible

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Speaker 1: when it comes to track record. Again, going back to

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Speaker 1: your open income in and observation. At the end of

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Speaker 1: the day, this is a people business, and so we

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Speaker 1: spend a lot of time getting to know the people

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Speaker 1: and understanding not only their acuity of being able to

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Speaker 1: identify high performing venture scale startups, but then also how

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Speaker 1: they're how those gps are ultimately going to work with

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Speaker 1: entrepreneurs and you know, what's the value that they provide

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Speaker 1: after the check and what's their reputation going to be

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Speaker 1: built upon. Yeah, I love that you talked about value.

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Speaker 1: I was I was talking to Ida Epo from Gingerbread

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Speaker 1: Capital about this and um and we were talking about how,

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Speaker 1: you know, it's hard enough for black women to see

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Speaker 1: in rows into reneweral andle career success getting better in

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Speaker 1: some ways, but it's still difficult and it's another thing

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Speaker 1: to tell them that they can be the investors you know,

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Speaker 1: into a lot of the companies that they that they

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Speaker 1: come into contact with. We talk about value, you know,

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Speaker 1: I love talking to vcs about you know, what is

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Speaker 1: the unique value that you know your thing like, what's

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Speaker 1: your unique opportunity was? What are you uniquely situated to do?

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Speaker 1: What unique value do women bring? Black women particularly bring

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Speaker 1: to investing. What we look for in general partnerships and

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Speaker 1: general partners is some unique access to be able to

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Speaker 1: to source amazing deal flow. And the insight that we

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Speaker 1: had at g V formally Google Ventures where Plexo Capital

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Speaker 1: was really born, was that women and people of color.

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Speaker 1: In fact, we started with black GPS. We did five

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Speaker 1: commitments at g V into uh seed stage venture funds

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Speaker 1: led by black GPS, and the insight was kind of

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Speaker 1: this indirect path in the venture allows for access to

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Speaker 1: some unique networks to get differentiated deal flow. But there's

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Speaker 1: another piece as well. I think it's the lens that

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Speaker 1: a black GP or a woman or a person of

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Speaker 1: color can use to evaluate market opportunities, especially at the

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Speaker 1: early stage before there's a lot of data, so it

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Speaker 1: takes some familiarity with markets and then also having that

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Speaker 1: Lens be able to evaluate an entrepreneur differently, because not

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Speaker 1: every entrepreneur that's successful has to look like a Mark Zuckerberg.

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Speaker 1: And so I think, what what black women in particular

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Speaker 1: bring again kind of going back to these networks, you know,

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Speaker 1: we always have to whether it's you know, black women

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Speaker 1: or black men, we have to to work, you know,

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Speaker 1: twice as hard to get half as far, and it's

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Speaker 1: going to take us twice as long. And I would

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Speaker 1: say that, you know, if we think realistically about the

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Speaker 1: challenges that that black people have, but in particular black women,

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Speaker 1: I mean, they're probably in many cases working three times

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Speaker 1: as hard. And so I think without question, there they're

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Speaker 1: the ability to kind of have that drive, and I

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Speaker 1: think we've seen that anecdotally. But then I think also

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Speaker 1: going back to that Lens, I think the ability to

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Speaker 1: kind of have the recognition around a certain set of

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Speaker 1: problems that might be unique to their experiences and being

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Speaker 1: able to see that there are venture scale opportunities in

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Speaker 1: those at the early stages, I think is really an

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Speaker 1: advantage for black women. Now. So the challenges are it's

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Speaker 1: often a little more difficult for them to be able

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Speaker 1: to to raise the capital to go out and start

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Speaker 1: to make those investments. But I would say or often

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Speaker 1: some of the target markets they might look at, people

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Speaker 1: might not believe their venture scale opportunities within those And

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Speaker 1: I think what we are starting to see at least

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Speaker 1: is a group of you know, millennial and gen Z

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Speaker 1: black females that are out doing some some great things,

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Speaker 1: you know Maya and Aggressive Capital or Monique at Cake

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Speaker 1: Ventures Um, I mean Maria, you know, and the work

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Speaker 1: that she's doing. There's a lot of success points that

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Speaker 1: we will have to monitor and observe looking forward. And

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Speaker 1: they're out there doing some great things, so you know,

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Speaker 1: tip of the hat and applaud them, and we want

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Speaker 1: to back as many of them as possible. There's different

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Speaker 1: levels of involvement that a VC you know, may have

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Speaker 1: when they're investing seed capital directly into a startup. Some

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Speaker 1: are you know, just board, They just on the board,

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Speaker 1: They come to the meet and they show up after

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Speaker 1: they want to check. Some are very involved, you know,

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Speaker 1: in the operations of the organization. When you're investing in

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Speaker 1: the funds. What would be the norm I guess I

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Speaker 1: should say on your involvement into that fund that you

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Speaker 1: invested in for us at Plexo Capital, when we think

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Speaker 1: about making an LP commitment, we want to be a

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Speaker 1: value add limited partner. So if I think about the

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Speaker 1: models that influence us the most or provide inspiration for us,

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Speaker 1: I think back to my days at g V Google

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Speaker 1: Ventures and the operating partner model that g V to

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Speaker 1: the table. Andrewes and Horowitz does the same thing, providing

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Speaker 1: more than just capital and a partner to lead diligence,

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Speaker 1: make an investment, take a board seat, but also bringing

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Speaker 1: these other skills to the table, you know, whether that

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Speaker 1: be business developments of helping companies, helping some of the

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Speaker 1: portfolio companies identify customers, or whether it's talent so having

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Speaker 1: staff on hand to be able to help companies recruit talent.

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Speaker 1: So I think all of those things are what has

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Speaker 1: guided our model. So when we think about how we

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Speaker 1: add value at Plexo Capital, it's goes beyond just kind

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Speaker 1: of providing an LP commitment. We also look to do

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Speaker 1: things such as have our portfolio manager of a shall

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Speaker 1: help a general partner with their portfolio construction models and

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Speaker 1: how they should think about both the modeling of what

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Speaker 1: they're going to do with the capital, but also how

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Speaker 1: to communicate that we also have a person Kate, who

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Speaker 1: has done a great job for us in terms of

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Speaker 1: helping us punch way above our weight class in social

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Speaker 1: media and marketing. So Kate will sit down with our

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Speaker 1: GPS and help them think about how to leverage social

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Speaker 1: media to build their brand or even thinking about marketing

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Speaker 1: and other PR efforts. And then, finally, and probably most importantly, Cougie,

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Speaker 1: who leads investor relations for Plexo Capital, really works hard

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Speaker 1: with the GPS two work with them on a go

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Speaker 1: to market strategy for fundraising because at the end of

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Speaker 1: the day, let's be realized, if there's no fund raise,

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Speaker 1: then none of this other stuff matters, right, So this

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Speaker 1: fundraising pieces often the most important component and can be

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Speaker 1: the most challenging for a fund one or a fund

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Speaker 1: to general partners. So could you will work with them

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Speaker 1: to put together a robust go to market strategy that

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Speaker 1: allows them to the GP to understand how to communicate

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Speaker 1: their value proposition. He'll help. Could you will help put

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Speaker 1: together a bespoke list of perspec active LPs and then

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Speaker 1: give some guidance on how to work with those prospective

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Speaker 1: LPs in terms of getting the meeting scheduled. What should

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Speaker 1: the cadence look like how should the follow ups be handled?

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Speaker 1: And then finally we have one of our advisors, George

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Speaker 1: An Perkins, who spent twenty three years selecting GPS for

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Speaker 1: private equity and venture capital for the Stanford University Endowment.

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Speaker 1: And Georgian works both with our Plexo Capital GP network

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Speaker 1: as well as with GPS from our new program gp X.

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Speaker 1: Georgian will do office hours with them to give them

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Speaker 1: what it's like to actually present to an institutional investor,

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Speaker 1: and she'll hear their pitch and then provide them with coaching.

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Speaker 1: So I like to think that Plexo Capital does. We

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Speaker 1: are aspiration is to be the most value at LP possible.

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Speaker 1: I think that you talked about like the social media

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Speaker 1: marketing and building your brand UM, that that is important

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Speaker 1: to getting deal flow um. And and for the sake

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Speaker 1: of those frustrated founders out there who there, Michael Cybel

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Speaker 1: was here at AFRO Tech, I want to say this

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Speaker 1: was maybeen and he said something that was striking for

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Speaker 1: him to if somebody in his seat to say. He said, Um,

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Speaker 1: there's this myth that you come in Silicon Valley and

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Speaker 1: people just want to write you a check to help

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Speaker 1: you make your dream happen, right, And what ultimately what

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Speaker 1: he was saying was that it is not as easy

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Speaker 1: as it sounds to come to Silicon Valley with an

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Speaker 1: idea and people just started throwing money at you. And so, yeah,

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Speaker 1: and I want to get your take on this, because

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Speaker 1: there are a lot of people who see the marketing

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Speaker 1: that comes from ventia capitalists like, hey, we want to

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Speaker 1: hear your thing. Hey, we wanna, you know, invest in

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Speaker 1: the best black startups. We all believe we have the

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Speaker 1: best black startup and then we run into these brick walls.

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Speaker 1: So you ask some perspective to the marketing of venture

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Speaker 1: capital and specifically Silicon Valley and the for the frustrated

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Speaker 1: entrepreneur who's running into no afternoon. Well, there's a there's

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Speaker 1: a lot to unpack there. I think let's just start

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Speaker 1: with Michael's observation. And I've heard him say this before. Look,

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Speaker 1: it's hard to raise money as an entrepreneur or as

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Speaker 1: as a GP, no matter what gender or ethnicity. Someone

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Speaker 1: is right, it's it's hard, especially you know, seed stage, startup,

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Speaker 1: first time entrepreneur, fund one for a g P. All

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Speaker 1: of those things are hard. You know, you've got nine

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Speaker 1: problems and if if you're black, you've got a hundred,

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Speaker 1: if you're a black female, if you have a hundred one,

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Speaker 1: and you know that hundred and hundred one, those are

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Speaker 1: really big relative to the other nine. But look, it's

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Speaker 1: just to say that it's just hard. In general. I

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Speaker 1: think what ends up happening for a lot of the entrepreneurs,

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Speaker 1: what we've heard within the last eighteen months, you know,

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Speaker 1: in the aftermath of the unfortunate killings of Brianna Taylor,

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Speaker 1: George Floyd, the countless others before and after, is a

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Speaker 1: willingness and an openness to want to for venture capitalists

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Speaker 1: to want to be at least perceived as embracing new

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Speaker 1: deal flow. And I think that's that's a good thing.

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Speaker 1: There's a lot of sincerity by some, you know, I've

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Speaker 1: talked to some and I believe they are sincere and

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Speaker 1: we've actually seen some some you know, companies founded by

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Speaker 1: black entrepreneurs received funding. But look, let's let's you know,

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Speaker 1: be honest that a lot of it is also just

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Speaker 1: just talk as well. And so you know, I think

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Speaker 1: what we need to do is we need to keep

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Speaker 1: track of, you know, who we're saying these things and

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Speaker 1: hold them accountable. We also need to move beyond this

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Speaker 1: this notion of hey, you know, I'm happy to have

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Speaker 1: office hours to mentor people. I mean, there's there's been

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Speaker 1: more than enough mentoring. Like we're we have oversupply on

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Speaker 1: mentor and we're undersupply on the ability to actually have

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Speaker 1: folks writing checks. That's that's really where the demand is.

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Speaker 1: There not really a whole lot of demand at this

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Speaker 1: point for mentorship. There's there's demand for you know, write

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Speaker 1: a check from my from my startup. But you know,

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Speaker 1: we we have to again recognize that this is this

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Speaker 1: is a journey. It's a hard process for entrepreneurs, and

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Speaker 1: you know, let's be honest. You know a lot of

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Speaker 1: companies are going to fail. But I think what's most

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Speaker 1: important is people want to feel like they were given

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Speaker 1: a shot, that is a level playing field, and they're

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Speaker 1: given the same opportunity as a Mark Zuckerberg want to be.

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Speaker 1: That also walks through the door. I think as long

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Speaker 1: as we feel like it was a fair process, we

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Speaker 1: actually had an opportunity, I think that that's the most

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Speaker 1: important thing, because then it saw on us to be

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Speaker 1: able to perform. I love that, um speaking of you know,

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Speaker 1: the Myn Taylor's, I'm sorry. The mod Arebreys. The Brianna

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Speaker 1: Taylor is George Floyd's. There was an article you wrote

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Speaker 1: about a year ago. Now, Um, I'm a VC but

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Speaker 1: still a black men in America, and there was a

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Speaker 1: line in it I thought I found really interesting and

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Speaker 1: you talked about and I'm gonna paraphrase a little bit

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Speaker 1: because it makes more sense for me this way as

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Speaker 1: a politician. It is now time to create legislation that

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Speaker 1: will undo the damage of the past centuries to black

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Speaker 1: to the black community, or resign or be voted out

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Speaker 1: so those politicians that are capable can make the changes necessary. Um,

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Speaker 1: how has legislation kept particularly would be black founders and

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Speaker 1: vcs from having opportunities to build wealth, you know, generating enterprises.

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Speaker 1: You know, it's why that's that's a great question, because

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Speaker 1: I think when we think historically about you know, we

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Speaker 1: can go all the way back and just look at

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Speaker 1: legislation that prevented black you know, um families from being

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Speaker 1: able to own real estate. You know, the federal government

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Speaker 1: actually worked with state and local governments to to put

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Speaker 1: processes in place. You know, redlining is the one that

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Speaker 1: comes to mind. But you know, it was more than

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Speaker 1: just redlining. It was also the the affordable loans that

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Speaker 1: were done after the New Deal to be able to

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Speaker 1: ensure that people could have a smaller down payment and

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Speaker 1: a longer timeline, you know, twenty years, to be able

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Speaker 1: to make smaller payments, to allow people to actually afford

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Speaker 1: to buy homes. The g I Bill, when you know,

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Speaker 1: folks returned from World War Two, the ability for really

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Speaker 1: with almost no down payment to allow g I s

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Speaker 1: to be able to purchase homes. And when we look at,

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Speaker 1: you know, how many black folks were actually able to

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Speaker 1: participate in those programs, you know, the numbers were very small.

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Speaker 1: The government actually stepped in at the federal level for

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Speaker 1: the programs put in place after the New Deal to

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Speaker 1: actually that's how redlining started. You know. They basically said,

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Speaker 1: you know, if there were any black folks living in

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Speaker 1: those districts, then the you know, the area wasn't eligible

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Speaker 1: for a loan. And what did that do. Well, it

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Speaker 1: prompted legislation at the local level to be able to say,

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Speaker 1: you know, through homeowners associations and through city, um, you

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Speaker 1: can you know, you can't sell to a black person, right,

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Speaker 1: And so those have had damaging effects that you know

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Speaker 1: that are going to haunt us for you know, at

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Speaker 1: least another I think another hundred years at a minimum.

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Speaker 1: So you know that that's the damage that that legislations

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Speaker 1: that have you know, what's what's really interesting right now?

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Speaker 1: And you know, I know that we're in a position

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Speaker 1: where we're looking at both and you know, an infrastructure

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Speaker 1: package of at least one and a half trillion, up

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Speaker 1: to some of the other proposals to be able to

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Speaker 1: provide education, child care, and universal health care that are

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Speaker 1: up to three and a half trillion dollars. You know.

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Speaker 1: One of the things that's being looked at is that

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Speaker 1: the cary as well, that is the profits that venture

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Speaker 1: firms make and how that's treated on on taxes. And

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Speaker 1: you know, I think it's kind of a little bit

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Speaker 1: of of and listen, I am one where I really

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Speaker 1: believe that we should have everyone should have health care,

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Speaker 1: we need to address the situation with child care. I

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Speaker 1: believe in all these things, you know, but it's just

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Speaker 1: unfortunate that now it seems like, you know, right when

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Speaker 1: the point where we're just starting to see some in

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Speaker 1: rows made by black folks, now the tax folks come,

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Speaker 1: you know, and so it's those are some of the

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Speaker 1: things that are a little frustrating. I often think, you know,

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Speaker 1: what are ways that we can kind of help. I mean,

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Speaker 1: sure we can talk about reparations, but what are some

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Speaker 1: of the other ways that we could use legislation to

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Speaker 1: be able to help with entrepreneurship? I would say both,

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Speaker 1: you know, the private sector obviously there are things that

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Speaker 1: can be done and have been done, but you know,

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Speaker 1: what can we do on the federal level as well

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Speaker 1: to be able to to help you know, black folks

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Speaker 1: open more businesses, get the funding and start to generate

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Speaker 1: wealth for ourselves. When you think about limited partnership, limited

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Speaker 1: partners I'm sorry, like large institutional ones that could be

432
00:23:53,240 --> 00:23:57,760
Speaker 1: pension funds, could be universities and the like. They're investing

433
00:23:57,800 --> 00:24:01,560
Speaker 1: the capital of quite off in like hourly workers, middle

434
00:24:01,640 --> 00:24:07,800
Speaker 1: class workers, and janitors, teachers, et cetera, many of brown folks,

435
00:24:07,960 --> 00:24:11,720
Speaker 1: black and brown folks, right and um. At the same time,

436
00:24:12,040 --> 00:24:15,960
Speaker 1: those dollars that often get invested don't go into black

437
00:24:16,200 --> 00:24:20,400
Speaker 1: and brown companies, and so that money leaves the community

438
00:24:20,400 --> 00:24:23,080
Speaker 1: in so many ways because as you know, I mean,

439
00:24:23,200 --> 00:24:26,360
Speaker 1: you invest in a hundred startups hoping one makes it right.

440
00:24:26,680 --> 00:24:31,720
Speaker 1: And so how important are mandates to where institutions say, look,

441
00:24:32,000 --> 00:24:35,240
Speaker 1: we're gonna invest in Plexo, and Plexo is going to

442
00:24:35,359 --> 00:24:38,840
Speaker 1: invest in a number of companies. Are we want to

443
00:24:38,880 --> 00:24:42,240
Speaker 1: make sure that some of those are you know, black

444
00:24:42,240 --> 00:24:44,679
Speaker 1: and brown folks. How important are those mandates and what

445
00:24:44,720 --> 00:24:47,919
Speaker 1: effect do you hope that they have so that you know,

446
00:24:48,560 --> 00:24:51,160
Speaker 1: some of those resources can you know, benefit the communities

447
00:24:51,160 --> 00:24:54,960
Speaker 1: of the people who generated those dollars. That's again a

448
00:24:55,000 --> 00:24:56,919
Speaker 1: lot to unpack and dig into, but this is an

449
00:24:56,920 --> 00:24:59,240
Speaker 1: important topic. I think when we look at some of

450
00:24:59,280 --> 00:25:04,520
Speaker 1: the pen funds in particular, you know, think Caliper's calisters.

451
00:25:04,560 --> 00:25:12,480
Speaker 1: I mean, these are multibillion dollar assets under management, and

452
00:25:12,680 --> 00:25:17,320
Speaker 1: when one looks at the population that they serve, as

453
00:25:17,400 --> 00:25:20,960
Speaker 1: you pointed out, the folks look a lot like us.

454
00:25:21,000 --> 00:25:24,200
Speaker 1: They're black and brown folks. But when we look at

455
00:25:24,359 --> 00:25:28,680
Speaker 1: the at the asset managers that are managing those funds,

456
00:25:28,720 --> 00:25:31,359
Speaker 1: you know, they typically don't look like us. And you know,

457
00:25:31,400 --> 00:25:34,919
Speaker 1: we can also take this and apply it to two foundations.

458
00:25:34,960 --> 00:25:39,560
Speaker 1: We can apply it to endowments, right, college endowments, And

459
00:25:40,720 --> 00:25:44,080
Speaker 1: at the end of the day, I think it's important

460
00:25:44,119 --> 00:25:48,280
Speaker 1: for the markets themselves to recognize and understand the opportunity

461
00:25:48,280 --> 00:25:50,280
Speaker 1: and realize there's going to be money left on the

462
00:25:50,320 --> 00:25:53,600
Speaker 1: table by not being inclusive with both who's doing the

463
00:25:53,640 --> 00:25:57,440
Speaker 1: investing and who's receiving those dollars from the investors. However,

464
00:25:58,520 --> 00:26:01,639
Speaker 1: what I also know is that that's not going to

465
00:26:01,720 --> 00:26:04,080
Speaker 1: work on his own right. We we've seen it and

466
00:26:04,080 --> 00:26:06,880
Speaker 1: we and it moves too slow. So I believe that

467
00:26:06,920 --> 00:26:09,800
Speaker 1: we do need to have some type of mandate now

468
00:26:10,000 --> 00:26:13,440
Speaker 1: that can manifest itself in many different ways. That can

469
00:26:13,520 --> 00:26:16,920
Speaker 1: come from, you know, a top down from the federal approach,

470
00:26:17,640 --> 00:26:22,680
Speaker 1: or like we've seen most recently California mandating that companies

471
00:26:22,800 --> 00:26:26,080
Speaker 1: that are are listed on one of the stock exchanges

472
00:26:26,160 --> 00:26:29,919
Speaker 1: that are based in California need to have diversity on

473
00:26:29,960 --> 00:26:34,280
Speaker 1: their boards. You know, they need to have black, brown, um, female, um.

474
00:26:34,400 --> 00:26:36,960
Speaker 1: So that's that's a good mandate, right that will have

475
00:26:37,160 --> 00:26:40,160
Speaker 1: that will affect change. So we can see the benefit

476
00:26:40,200 --> 00:26:43,160
Speaker 1: of having legislation from the top down. I would also say,

477
00:26:43,200 --> 00:26:47,000
Speaker 1: what's interesting looking at the population of some of these

478
00:26:47,640 --> 00:26:50,680
Speaker 1: um entities that are managing money on behalf of someone else.

479
00:26:50,680 --> 00:26:53,280
Speaker 1: If we're talking Calpur's cow stairs, a lot of black

480
00:26:53,280 --> 00:26:55,840
Speaker 1: and brown workers. Well, you know what change could be

481
00:26:55,880 --> 00:26:59,639
Speaker 1: affected by organizing those folks to put pressure on the

482
00:27:00,000 --> 00:27:02,960
Speaker 1: Smith committee on board to say, hey, we want to

483
00:27:02,960 --> 00:27:05,960
Speaker 1: see our dollars, because in essence, they are the dollars

484
00:27:05,960 --> 00:27:10,160
Speaker 1: of those people going to managers that look like us,

485
00:27:10,200 --> 00:27:13,480
Speaker 1: that are investing into companies led by folks that look

486
00:27:13,560 --> 00:27:15,879
Speaker 1: like us. So I think there's there's a couple of

487
00:27:15,920 --> 00:27:19,280
Speaker 1: ways that that it can happen. But as much as

488
00:27:19,320 --> 00:27:22,600
Speaker 1: I like just letting the market play out, this is

489
00:27:22,640 --> 00:27:24,560
Speaker 1: the case where it's just not going to happen, or

490
00:27:24,600 --> 00:27:26,399
Speaker 1: it's just not going to happen fast enough if we

491
00:27:26,520 --> 00:27:29,400
Speaker 1: just leave it our hands off and allow the markets

492
00:27:29,440 --> 00:27:34,280
Speaker 1: to just have it. Um. Correct, course, there's so much

493
00:27:34,320 --> 00:27:36,199
Speaker 1: more I want to talk to you about. To be

494
00:27:36,240 --> 00:27:39,040
Speaker 1: sensitive to your time, I do one more. Um. You know,

495
00:27:39,119 --> 00:27:43,320
Speaker 1: there's much better of a flurry of activity happening now

496
00:27:43,440 --> 00:27:47,320
Speaker 1: with black investors at the angel level of the sea level. Um.

497
00:27:47,359 --> 00:27:51,800
Speaker 1: But when it comes to a rounds even less V

498
00:27:52,000 --> 00:27:55,480
Speaker 1: rounds is c there's a lot less people who look

499
00:27:55,520 --> 00:27:59,560
Speaker 1: like you and I, Right, And how do we get

500
00:27:59,800 --> 00:28:04,159
Speaker 1: more war institutional investors war black vcs At later stage,

501
00:28:05,480 --> 00:28:10,160
Speaker 1: later stages of the game, when one thinks about how

502
00:28:10,320 --> 00:28:13,399
Speaker 1: to put together a strategy for a venture fund. The

503
00:28:13,520 --> 00:28:18,160
Speaker 1: thing that immediately becomes a parent is that the strategy

504
00:28:18,280 --> 00:28:21,159
Speaker 1: is often dictated by the fund size, you know, and

505
00:28:21,200 --> 00:28:24,560
Speaker 1: to put it simpler, your fund size is your strategy.

506
00:28:24,680 --> 00:28:27,639
Speaker 1: So what we've observed is that there are a number

507
00:28:28,160 --> 00:28:34,240
Speaker 1: of talented investors at multi stage firms or later stage firms,

508
00:28:34,320 --> 00:28:38,080
Speaker 1: and what ends up happening is if those folks decide

509
00:28:38,120 --> 00:28:40,560
Speaker 1: to leave that multi stage or late stage firm and

510
00:28:40,600 --> 00:28:44,640
Speaker 1: hang their own shingle. The constraint is often how much

511
00:28:44,760 --> 00:28:48,120
Speaker 1: capital can be raised with that initial fund, to the

512
00:28:48,200 --> 00:28:53,000
Speaker 1: point where if one GP, even with multi stage experience,

513
00:28:53,000 --> 00:28:57,560
Speaker 1: can only raise you know, thirty to fifty million dollars, well,

514
00:28:57,680 --> 00:28:59,960
Speaker 1: then all of a sudden, that's an early stage firm,

515
00:29:00,080 --> 00:29:03,240
Speaker 1: even though the GP may have late stage experience. So

516
00:29:03,560 --> 00:29:05,760
Speaker 1: that's one of the challenges that we face is that

517
00:29:05,840 --> 00:29:08,520
Speaker 1: often the folks that have the talent and the drive

518
00:29:08,600 --> 00:29:10,800
Speaker 1: to go and take that leap of faith on their

519
00:29:10,800 --> 00:29:14,640
Speaker 1: own and hang their shingle, they're limited in terms of

520
00:29:14,680 --> 00:29:17,960
Speaker 1: how much capital they can raise now over time fund

521
00:29:18,000 --> 00:29:21,440
Speaker 1: one fund to prove some success. They can raise more

522
00:29:21,480 --> 00:29:24,440
Speaker 1: over time than they can move to invest at some

523
00:29:24,560 --> 00:29:27,640
Speaker 1: of those later stages. But I would say that's a

524
00:29:27,840 --> 00:29:30,920
Speaker 1: very student observation in terms of one of the constraints

525
00:29:31,000 --> 00:29:34,960
Speaker 1: that we have downstream for black and brown entrepreneurs is

526
00:29:35,040 --> 00:29:38,000
Speaker 1: that there's not enough capital at those later stages. Now

527
00:29:38,360 --> 00:29:44,360
Speaker 1: that said, I suspect that mentally, it's more of elite

528
00:29:44,800 --> 00:29:48,120
Speaker 1: for investors that are not black and brown to actually

529
00:29:48,280 --> 00:29:54,440
Speaker 1: invest at the earlier stages of entrepreneurs led by of

530
00:29:54,600 --> 00:29:57,360
Speaker 1: firms led by black and brown entrepreneurs, because there's not

531
00:29:57,400 --> 00:30:01,080
Speaker 1: a lot of data. Right at least at the later stage,

532
00:30:02,040 --> 00:30:06,320
Speaker 1: you tend to cross a point where there's enough data

533
00:30:06,960 --> 00:30:11,000
Speaker 1: from what the company's performances that it's you know, that

534
00:30:11,080 --> 00:30:14,320
Speaker 1: kind of barrier um is lowered a bit, not to

535
00:30:14,360 --> 00:30:18,560
Speaker 1: say is completely eliminated in terms of entrepreneurs that are

536
00:30:18,600 --> 00:30:21,000
Speaker 1: black and brown being able to go to late stage

537
00:30:21,040 --> 00:30:24,840
Speaker 1: capital that is not led by black and brown gps.

538
00:30:24,840 --> 00:30:28,000
Speaker 1: But nonetheless, at least there's some data, there's some performance

539
00:30:28,040 --> 00:30:31,360
Speaker 1: that can be shown that allows the entrepreneur black or

540
00:30:31,400 --> 00:30:33,600
Speaker 1: brown to be able to better compete in the market.

541
00:30:34,120 --> 00:30:36,440
Speaker 1: But that said, you know, I do believe that we

542
00:30:36,680 --> 00:30:41,040
Speaker 1: need to see more large scale firms, multi stage firms,

543
00:30:41,120 --> 00:30:45,440
Speaker 1: later stage growth firms led by black and brown gps

544
00:30:45,560 --> 00:30:50,240
Speaker 1: to be able to to better address that capital gap. No, Tony,

545
00:30:50,280 --> 00:30:54,040
Speaker 1: thank you so much to spend time. Appreciate it. Thanks

546
00:30:54,040 --> 00:31:10,480
Speaker 1: for having me on Black Tech Green Money is the

547
00:31:10,520 --> 00:31:13,640
Speaker 1: production of Black of the Afro Tech Black Effect podcast

548
00:31:13,720 --> 00:31:16,800
Speaker 1: network and My Heart Media was produced by Morgan Dabon

549
00:31:16,920 --> 00:31:20,480
Speaker 1: and me Well Lucas. Look at this supproduction supported by

550
00:31:20,520 --> 00:31:23,920
Speaker 1: Love Be Jimmy Risa Lewis. Special thank you to Michael

551
00:31:24,000 --> 00:31:26,640
Speaker 1: Davis Adam Sims. It's a car savan Yan, you know,

552
00:31:26,800 --> 00:31:30,479
Speaker 1: like the white Yes, that's his real name. Learn more

553
00:31:30,480 --> 00:31:32,680
Speaker 1: about my guests and other tech dis reference to innovators

554
00:31:32,680 --> 00:31:35,080
Speaker 1: at afro tech dot com. The video version of this

555
00:31:35,160 --> 00:31:37,560
Speaker 1: episode will be on Black Tech Green Money on YouTube.

556
00:31:37,600 --> 00:31:41,680
Speaker 1: So tapping enjoying Black Tech Green Money, leave us a

557
00:31:41,720 --> 00:31:47,640
Speaker 1: five star rating on iTunes. Go get your money, Peace

558
00:31:47,680 --> 00:31:48,040
Speaker 1: and love