WEBVTT - How VCs Raise Money w/ Lo Toney 0:00:01.880 --> 0:00:10.000 Afro Tech twenty seventeen, San Francisco, California. Jule Burke Solomon 0:00:10.119 --> 0:00:12.559 is on the main stage speaking with Angela Benton, who 0:00:12.680 --> 0:00:16.280 was today founder and CEO stream Lytics, about her company, 0:00:16.400 --> 0:00:21.200 part Pick, which had just been acquired by Amazon. Angela 0:00:21.280 --> 0:00:24.080 asked a question that's critical, It may not be obvious 0:00:24.120 --> 0:00:27.440 to most getting acquired. It's a lot about the team 0:00:27.480 --> 0:00:31.240 you've built, not just a technology. The company who's buying 0:00:31.280 --> 0:00:34.080 you wants the talent you've attracted. That's a core part 0:00:34.159 --> 0:00:37.160 of the value they want to purchase. So to become 0:00:37.159 --> 0:00:39.479 a valuable company, how do you attract the kind of 0:00:39.520 --> 0:00:42.960 talent that can first build something great and second become 0:00:42.960 --> 0:00:45.800 a marketable asset in and of itself. The first step 0:00:46.000 --> 0:00:49.440 was kind of leveling up my understanding of what I 0:00:49.440 --> 0:00:51.800 would need. So it's hard to reclude people if you 0:00:51.800 --> 0:00:54.000 don't even know what you need. UM. So I needed 0:00:54.040 --> 0:00:56.000 to figure out, Okay, who are the people that are 0:00:56.040 --> 0:00:59.000 building this type of technology, what is their skill set? 0:00:59.120 --> 0:01:01.960 What languages did they know? Um? And once I figured 0:01:01.960 --> 0:01:04.360 that out, then I went to those meetups and went 0:01:04.400 --> 0:01:07.319 to those events so I can meet those people. And 0:01:07.360 --> 0:01:09.000 a lot of it had to do with being able 0:01:09.040 --> 0:01:11.680 to craft a story that was interesting to them. So 0:01:11.720 --> 0:01:13.520 I was really trying to refine the folks that I 0:01:13.560 --> 0:01:15.720 was looking for, and then when I got in front 0:01:15.760 --> 0:01:17.959 of them, being able to tell them a story about, 0:01:18.319 --> 0:01:19.800 you know, just the same thing I told you about 0:01:19.800 --> 0:01:23.240 my grandfather had this problem. I'm an expert in this industry. 0:01:23.280 --> 0:01:25.360 I mean expert. I've worked at the company for a 0:01:25.440 --> 0:01:29.160 year at that point, but you know, expert ish, and 0:01:29.920 --> 0:01:33.280 I wanted them to realize that I'm I'm really serious 0:01:33.319 --> 0:01:36.560 about this. I'm trying to build a great company, great technology. 0:01:36.560 --> 0:01:40.240 I don't want you on board. And it worked surprisingly. 0:01:40.360 --> 0:01:42.600 I mean, at this time you're talking about I was 0:01:42.680 --> 0:01:46.400 twenty three years old, so a lot of what I 0:01:46.440 --> 0:01:49.520 did was I just didn't know any better, and I 0:01:49.560 --> 0:01:54.240 was just kind of fearlessness. Yeah. Yeah, So I really 0:01:54.280 --> 0:01:56.720 was just like, this is a great idea. I know 0:01:56.800 --> 0:01:59.600 it's gonna work because I can see it every single 0:01:59.680 --> 0:02:02.800 day in my job, you know. I think the story 0:02:03.240 --> 0:02:05.920 was compelling to folks, and they were interested, even so 0:02:06.040 --> 0:02:08.720 much so that one of the first kind of breaks 0:02:08.760 --> 0:02:12.880 I got was I competed that tech Crunch disrupt and 0:02:13.200 --> 0:02:16.240 people saw that video and reached out to me and 0:02:16.280 --> 0:02:18.720 we're like, Hey, I'm really interested in this problem that 0:02:18.800 --> 0:02:21.280 you're trying to solve. I don't think you've raised any 0:02:21.280 --> 0:02:23.359 money yet, but I just want to work with you. 0:02:23.840 --> 0:02:26.080 And so I was able to get free labor that 0:02:26.160 --> 0:02:28.200 way because people were just interested in the problem and 0:02:28.280 --> 0:02:31.079 hadn't seen a solution. It was folks who were kind 0:02:31.080 --> 0:02:33.320 of tinkers who were like, I need this, so I 0:02:33.360 --> 0:02:34.840 want to help you build it because I need it. 0:02:36.400 --> 0:02:41.040 I'm well Lucas and this is black tech money. I'm 0:02:41.040 --> 0:02:43.160 gonna answer to some of the biggest names, some of 0:02:43.160 --> 0:02:46.120 the brightest minds and brilliant I this If you're black 0:02:46.120 --> 0:02:48.400 and building are simply using tech to secure your back, 0:02:48.760 --> 0:02:56.360 this podcast is for you. Low Tony is the founding 0:02:56.360 --> 0:02:59.640 and managing partner at Plexo Capital, which is an institutional 0:02:59.680 --> 0:03:02.280 effect Smith firm He incubated and spun out of g 0:03:02.480 --> 0:03:06.560 V Google Vengeance. Vcs need to go outs of funds 0:03:06.600 --> 0:03:09.160 just like startups do. To raise the capital they can 0:03:09.200 --> 0:03:11.760 deploy the other startups, and I don't think we talk 0:03:11.840 --> 0:03:14.680 about that enough. They do the same thing they pitched. 0:03:14.760 --> 0:03:17.560 They execute on ideas or a thesis. If I may, 0:03:18.200 --> 0:03:20.760 when raising a fund, what is similar about the function 0:03:20.800 --> 0:03:24.320 of being a VC and operating a startup. At afro 0:03:24.400 --> 0:03:27.520 tech World one, I as low Tony the best person 0:03:27.520 --> 0:03:30.040 on the planet to provide a worthy inc. There are 0:03:30.080 --> 0:03:32.680 a lot of similarities. That's a good observation. We think 0:03:32.720 --> 0:03:34.760 about it all the time, both in terms of how 0:03:34.800 --> 0:03:38.120 we operate and communicate the message of Plexo capital, but 0:03:38.200 --> 0:03:41.800 also what we look for in other early stage firms 0:03:41.840 --> 0:03:44.680 and general partnerships that we want to invest into. So 0:03:45.160 --> 0:03:47.840 if I were to think about my job as an 0:03:47.840 --> 0:03:51.080 investor into companies, then there are certain things that we 0:03:51.120 --> 0:03:53.880 would look for. We look for the market size, we 0:03:54.000 --> 0:03:56.840 look for the problem being solved. We take a look 0:03:56.880 --> 0:04:00.240 at the solution and how it fits with in the 0:04:00.560 --> 0:04:05.200 overall competitive landscape, and most importantly, especially at the early stage, 0:04:05.200 --> 0:04:07.600 we look at the team as well. And then in 0:04:07.840 --> 0:04:09.960 combination of all those things, kind of one of the 0:04:10.040 --> 0:04:13.160 things that should surface is what is it that makes 0:04:13.200 --> 0:04:16.560 this company really unique? What's their competitive advantage? And I 0:04:16.560 --> 0:04:20.000 think that applies to the world of investing as a 0:04:20.000 --> 0:04:24.240 limited partner when we look at gps that we're interested 0:04:24.240 --> 0:04:27.839 in backing. GPS are the general partners that lead venture firms. 0:04:28.279 --> 0:04:31.520 If we're looking at a new fund that we'd like 0:04:31.600 --> 0:04:36.080 to consider, we think about the opportunity that is going after. 0:04:36.200 --> 0:04:38.960 Is it thesis driven and is it taking a certain 0:04:39.000 --> 0:04:42.800 approach around let's say enterprise software and the opportunities within 0:04:43.040 --> 0:04:45.520 that market, or is it taking a geographic approach kind 0:04:45.520 --> 0:04:49.040 of what's the positioning of the firm in terms of 0:04:49.080 --> 0:04:51.520 how it's going to deploy the capital. And then we 0:04:51.600 --> 0:04:54.719 look at the gps. What's their track record, what's their experience, 0:04:54.760 --> 0:04:57.320 what are the entrepreneurs have to say about working with them, 0:04:57.839 --> 0:05:00.640 what other gps have to say about working with them, 0:05:00.640 --> 0:05:03.000 what do their LPs have to say it? We take 0:05:03.040 --> 0:05:05.600 all of that and then we think about, Okay, what's 0:05:05.680 --> 0:05:10.120 the unique advantage that these gps will have that will 0:05:10.120 --> 0:05:12.720 allow them to win the best deals. So there are 0:05:12.720 --> 0:05:16.560 a lot of similarities between investing as a general partner 0:05:16.760 --> 0:05:20.600 into an entrepreneur, as there are as investing as a 0:05:20.640 --> 0:05:26.440 limited partner into general partnerships. What what is wildly different 0:05:26.680 --> 0:05:30.039 versus investing directly into a company versus investing it into 0:05:30.040 --> 0:05:32.800 a fund. Yeah, here's the thing that I think is 0:05:32.839 --> 0:05:36.880 wildly different. When investing into a company, the risk is 0:05:36.880 --> 0:05:40.640 isolated into two kind of one point of fault. Right 0:05:41.120 --> 0:05:44.839 there is the company itself, the the entrepreneur of the team, 0:05:44.880 --> 0:05:47.880 the market they're going after. But basically the risk is 0:05:47.880 --> 0:05:51.920 isolated into that one investment. Investing as a limited partner, 0:05:53.040 --> 0:05:55.520 it's a little bit different because what I'm doing is 0:05:56.120 --> 0:05:59.359 as a limited partner, I'm basically investing into the bank 0:05:59.360 --> 0:06:02.919 account of a general partner and they've got a blank checkbook, 0:06:03.160 --> 0:06:06.320 and so I really don't know the investments that they're 0:06:06.320 --> 0:06:09.000 going to go and make. Right, they'll tell me a story. 0:06:09.120 --> 0:06:11.160 I can look at their track record, I can look 0:06:11.160 --> 0:06:13.800 at past investments they've made, but at the end of 0:06:13.800 --> 0:06:16.479 the day, the risk is a little broader, So you know, 0:06:16.520 --> 0:06:20.040 it definitely takes a little bit longer in the diligence 0:06:20.040 --> 0:06:23.440 process investing as a limited partner as opposed to investing 0:06:23.480 --> 0:06:29.880 as a as a general partner. So you're specifically focused 0:06:29.920 --> 0:06:34.720 on helping minorities get into this space. As a byproduct 0:06:34.760 --> 0:06:36.679 of that, we're like, we're not all coming from Silicon 0:06:36.760 --> 0:06:40.039 Valley or Stanford, you know, and in many cases, you know, 0:06:40.360 --> 0:06:43.640 you have to do more to cultivate that crop of vcs. 0:06:43.680 --> 0:06:46.960 And if I understand correctly, so is there a strong 0:06:47.080 --> 0:06:51.279 pipeline of black and black female vcs too to be 0:06:51.320 --> 0:06:54.039 able to come to LOW and say, hey, we got 0:06:54.040 --> 0:06:59.400 the right stuff. Absolutely. We track about thirteen to fourteen 0:06:59.520 --> 0:07:03.479 hundred firms globally and we've had a touch point with 0:07:03.600 --> 0:07:06.440 close to five dred of those folks, and there's a 0:07:06.520 --> 0:07:11.800 strong mix of black general partners within that set. They 0:07:11.960 --> 0:07:16.240 have the capabilities, the qualifications, it's really often just a 0:07:16.280 --> 0:07:18.840 matter of getting the opportunity, kind of getting that first 0:07:19.680 --> 0:07:22.640 entity or person to believe in them, to back them 0:07:22.680 --> 0:07:25.600 to go out and invest. What we've learned is that 0:07:25.680 --> 0:07:27.720 it is important also to have a little bit of 0:07:27.760 --> 0:07:31.920 a different approach in terms of evaluating a general partner, 0:07:32.040 --> 0:07:34.880 especially when it comes to track record. So I think 0:07:34.920 --> 0:07:38.360 we're fairly flexible. Obviously, if someone is on a Fund 0:07:38.360 --> 0:07:40.280 two or Fund three, we can look at fund one 0:07:40.360 --> 0:07:43.360 or fund two performance. If someone is coming out of 0:07:43.360 --> 0:07:47.480 a shop that allows attribution, they're leaving a larger firm 0:07:47.520 --> 0:07:50.200 to go start their own venture firm, hang their own shingle, 0:07:50.640 --> 0:07:52.840 we can look at their track record from that firm, 0:07:52.880 --> 0:07:55.880 if the prior firm allows attribution, or we can help 0:07:55.920 --> 0:07:59.680 the GP piece together what their track record was at 0:07:59.720 --> 0:08:02.960 that firm and what their role was in the deals. 0:08:03.000 --> 0:08:05.680 Did they help the source the deal due diligence, did 0:08:05.720 --> 0:08:07.840 they lead the investment, did they take the board seat. 0:08:08.160 --> 0:08:12.760 We'll even look at prolific angel track records or folks 0:08:12.760 --> 0:08:15.520 that spin up SPVs. You know, I think all of 0:08:15.560 --> 0:08:18.680 those components allow us to be a little more flexible 0:08:18.720 --> 0:08:21.960 when it comes to track record. Again, going back to 0:08:22.040 --> 0:08:24.280 your open income in and observation. At the end of 0:08:24.280 --> 0:08:26.600 the day, this is a people business, and so we 0:08:26.640 --> 0:08:28.600 spend a lot of time getting to know the people 0:08:28.640 --> 0:08:31.840 and understanding not only their acuity of being able to 0:08:31.920 --> 0:08:36.520 identify high performing venture scale startups, but then also how 0:08:36.559 --> 0:08:39.480 they're how those gps are ultimately going to work with 0:08:39.800 --> 0:08:43.160 entrepreneurs and you know, what's the value that they provide 0:08:43.200 --> 0:08:45.520 after the check and what's their reputation going to be 0:08:45.600 --> 0:08:48.600 built upon. Yeah, I love that you talked about value. 0:08:48.679 --> 0:08:52.119 I was I was talking to Ida Epo from Gingerbread 0:08:52.160 --> 0:08:55.360 Capital about this and um and we were talking about how, 0:08:55.559 --> 0:08:58.240 you know, it's hard enough for black women to see 0:08:58.280 --> 0:09:02.200 in rows into reneweral andle career success getting better in 0:09:02.240 --> 0:09:05.040 some ways, but it's still difficult and it's another thing 0:09:05.080 --> 0:09:07.520 to tell them that they can be the investors you know, 0:09:07.600 --> 0:09:09.839 into a lot of the companies that they that they 0:09:09.880 --> 0:09:13.800 come into contact with. We talk about value, you know, 0:09:13.880 --> 0:09:16.319 I love talking to vcs about you know, what is 0:09:16.360 --> 0:09:18.680 the unique value that you know your thing like, what's 0:09:18.679 --> 0:09:22.080 your unique opportunity was? What are you uniquely situated to do? 0:09:22.800 --> 0:09:26.840 What unique value do women bring? Black women particularly bring 0:09:26.840 --> 0:09:32.200 to investing. What we look for in general partnerships and 0:09:32.280 --> 0:09:36.320 general partners is some unique access to be able to 0:09:36.320 --> 0:09:40.160 to source amazing deal flow. And the insight that we 0:09:40.240 --> 0:09:43.559 had at g V formally Google Ventures where Plexo Capital 0:09:43.600 --> 0:09:46.679 was really born, was that women and people of color. 0:09:46.679 --> 0:09:49.800 In fact, we started with black GPS. We did five 0:09:50.360 --> 0:09:55.280 commitments at g V into uh seed stage venture funds 0:09:55.360 --> 0:09:57.960 led by black GPS, and the insight was kind of 0:09:57.960 --> 0:10:01.600 this indirect path in the venture allows for access to 0:10:01.679 --> 0:10:04.600 some unique networks to get differentiated deal flow. But there's 0:10:04.600 --> 0:10:07.480 another piece as well. I think it's the lens that 0:10:08.000 --> 0:10:10.880 a black GP or a woman or a person of 0:10:10.920 --> 0:10:15.600 color can use to evaluate market opportunities, especially at the 0:10:15.640 --> 0:10:18.480 early stage before there's a lot of data, so it 0:10:18.520 --> 0:10:22.640 takes some familiarity with markets and then also having that 0:10:22.760 --> 0:10:27.680 Lens be able to evaluate an entrepreneur differently, because not 0:10:27.760 --> 0:10:32.000 every entrepreneur that's successful has to look like a Mark Zuckerberg. 0:10:32.520 --> 0:10:34.920 And so I think, what what black women in particular 0:10:34.960 --> 0:10:37.640 bring again kind of going back to these networks, you know, 0:10:38.200 --> 0:10:41.160 we always have to whether it's you know, black women 0:10:41.280 --> 0:10:43.320 or black men, we have to to work, you know, 0:10:43.400 --> 0:10:45.880 twice as hard to get half as far, and it's 0:10:45.880 --> 0:10:47.880 going to take us twice as long. And I would 0:10:47.880 --> 0:10:50.640 say that, you know, if we think realistically about the 0:10:50.720 --> 0:10:53.960 challenges that that black people have, but in particular black women, 0:10:54.280 --> 0:10:57.040 I mean, they're probably in many cases working three times 0:10:57.040 --> 0:10:59.920 as hard. And so I think without question, there they're 0:11:00.040 --> 0:11:02.160 the ability to kind of have that drive, and I 0:11:02.200 --> 0:11:05.280 think we've seen that anecdotally. But then I think also 0:11:05.400 --> 0:11:08.079 going back to that Lens, I think the ability to 0:11:08.160 --> 0:11:10.760 kind of have the recognition around a certain set of 0:11:10.800 --> 0:11:14.280 problems that might be unique to their experiences and being 0:11:14.320 --> 0:11:17.480 able to see that there are venture scale opportunities in 0:11:17.520 --> 0:11:20.040 those at the early stages, I think is really an 0:11:20.080 --> 0:11:24.680 advantage for black women. Now. So the challenges are it's 0:11:24.760 --> 0:11:27.120 often a little more difficult for them to be able 0:11:27.160 --> 0:11:30.320 to to raise the capital to go out and start 0:11:30.360 --> 0:11:34.160 to make those investments. But I would say or often 0:11:34.760 --> 0:11:37.800 some of the target markets they might look at, people 0:11:37.920 --> 0:11:41.720 might not believe their venture scale opportunities within those And 0:11:41.760 --> 0:11:44.160 I think what we are starting to see at least 0:11:44.320 --> 0:11:47.640 is a group of you know, millennial and gen Z 0:11:48.000 --> 0:11:51.319 black females that are out doing some some great things, 0:11:51.360 --> 0:11:55.320 you know Maya and Aggressive Capital or Monique at Cake 0:11:55.400 --> 0:11:59.000 Ventures Um, I mean Maria, you know, and the work 0:11:59.040 --> 0:12:01.880 that she's doing. There's a lot of success points that 0:12:01.920 --> 0:12:04.480 we will have to monitor and observe looking forward. And 0:12:04.520 --> 0:12:06.400 they're out there doing some great things, so you know, 0:12:06.440 --> 0:12:08.679 tip of the hat and applaud them, and we want 0:12:08.679 --> 0:12:12.760 to back as many of them as possible. There's different 0:12:12.800 --> 0:12:15.640 levels of involvement that a VC you know, may have 0:12:15.760 --> 0:12:18.840 when they're investing seed capital directly into a startup. Some 0:12:18.920 --> 0:12:21.240 are you know, just board, They just on the board, 0:12:21.320 --> 0:12:22.640 They come to the meet and they show up after 0:12:22.679 --> 0:12:25.400 they want to check. Some are very involved, you know, 0:12:25.559 --> 0:12:29.400 in the operations of the organization. When you're investing in 0:12:29.440 --> 0:12:33.160 the funds. What would be the norm I guess I 0:12:33.200 --> 0:12:37.400 should say on your involvement into that fund that you 0:12:37.559 --> 0:12:42.840 invested in for us at Plexo Capital, when we think 0:12:42.840 --> 0:12:46.040 about making an LP commitment, we want to be a 0:12:46.160 --> 0:12:50.040 value add limited partner. So if I think about the 0:12:50.120 --> 0:12:53.640 models that influence us the most or provide inspiration for us, 0:12:54.120 --> 0:12:56.840 I think back to my days at g V Google 0:12:56.920 --> 0:13:00.200 Ventures and the operating partner model that g V to 0:13:00.240 --> 0:13:04.000 the table. Andrewes and Horowitz does the same thing, providing 0:13:04.200 --> 0:13:08.920 more than just capital and a partner to lead diligence, 0:13:09.320 --> 0:13:12.280 make an investment, take a board seat, but also bringing 0:13:12.320 --> 0:13:15.640 these other skills to the table, you know, whether that 0:13:15.720 --> 0:13:20.400 be business developments of helping companies, helping some of the 0:13:20.440 --> 0:13:25.200 portfolio companies identify customers, or whether it's talent so having 0:13:25.520 --> 0:13:28.680 staff on hand to be able to help companies recruit talent. 0:13:29.200 --> 0:13:32.120 So I think all of those things are what has 0:13:32.559 --> 0:13:35.880 guided our model. So when we think about how we 0:13:35.920 --> 0:13:40.120 add value at Plexo Capital, it's goes beyond just kind 0:13:40.160 --> 0:13:44.360 of providing an LP commitment. We also look to do 0:13:44.520 --> 0:13:48.360 things such as have our portfolio manager of a shall 0:13:48.960 --> 0:13:53.080 help a general partner with their portfolio construction models and 0:13:53.080 --> 0:13:56.600 how they should think about both the modeling of what 0:13:56.640 --> 0:13:58.800 they're going to do with the capital, but also how 0:13:58.800 --> 0:14:03.440 to communicate that we also have a person Kate, who 0:14:03.480 --> 0:14:05.960 has done a great job for us in terms of 0:14:06.000 --> 0:14:09.120 helping us punch way above our weight class in social 0:14:09.120 --> 0:14:12.280 media and marketing. So Kate will sit down with our 0:14:12.360 --> 0:14:15.440 GPS and help them think about how to leverage social 0:14:15.440 --> 0:14:18.040 media to build their brand or even thinking about marketing 0:14:18.040 --> 0:14:23.240 and other PR efforts. And then, finally, and probably most importantly, Cougie, 0:14:23.360 --> 0:14:27.400 who leads investor relations for Plexo Capital, really works hard 0:14:27.560 --> 0:14:30.960 with the GPS two work with them on a go 0:14:31.040 --> 0:14:33.560 to market strategy for fundraising because at the end of 0:14:33.560 --> 0:14:36.520 the day, let's be realized, if there's no fund raise, 0:14:36.600 --> 0:14:38.680 then none of this other stuff matters, right, So this 0:14:38.800 --> 0:14:41.960 fundraising pieces often the most important component and can be 0:14:42.040 --> 0:14:45.560 the most challenging for a fund one or a fund 0:14:45.560 --> 0:14:48.440 to general partners. So could you will work with them 0:14:48.480 --> 0:14:51.720 to put together a robust go to market strategy that 0:14:51.800 --> 0:14:55.000 allows them to the GP to understand how to communicate 0:14:55.040 --> 0:14:58.240 their value proposition. He'll help. Could you will help put 0:14:58.280 --> 0:15:01.880 together a bespoke list of perspec active LPs and then 0:15:02.040 --> 0:15:07.520 give some guidance on how to work with those prospective 0:15:07.640 --> 0:15:10.200 LPs in terms of getting the meeting scheduled. What should 0:15:10.200 --> 0:15:13.760 the cadence look like how should the follow ups be handled? 0:15:14.560 --> 0:15:17.240 And then finally we have one of our advisors, George 0:15:17.240 --> 0:15:21.760 An Perkins, who spent twenty three years selecting GPS for 0:15:21.920 --> 0:15:25.440 private equity and venture capital for the Stanford University Endowment. 0:15:25.960 --> 0:15:30.080 And Georgian works both with our Plexo Capital GP network 0:15:30.360 --> 0:15:34.040 as well as with GPS from our new program gp X. 0:15:34.560 --> 0:15:38.280 Georgian will do office hours with them to give them 0:15:38.280 --> 0:15:42.640 what it's like to actually present to an institutional investor, 0:15:43.000 --> 0:15:45.920 and she'll hear their pitch and then provide them with coaching. 0:15:46.400 --> 0:15:49.680 So I like to think that Plexo Capital does. We 0:15:49.920 --> 0:15:53.440 are aspiration is to be the most value at LP possible. 0:15:54.720 --> 0:15:57.920 I think that you talked about like the social media 0:15:58.000 --> 0:16:01.200 marketing and building your brand UM, that that is important 0:16:01.200 --> 0:16:04.200 to getting deal flow um. And and for the sake 0:16:04.320 --> 0:16:09.240 of those frustrated founders out there who there, Michael Cybel 0:16:09.360 --> 0:16:11.080 was here at AFRO Tech, I want to say this 0:16:11.200 --> 0:16:14.760 was maybeen and he said something that was striking for 0:16:14.840 --> 0:16:18.160 him to if somebody in his seat to say. He said, Um, 0:16:18.200 --> 0:16:21.960 there's this myth that you come in Silicon Valley and 0:16:22.960 --> 0:16:24.800 people just want to write you a check to help 0:16:24.840 --> 0:16:28.280 you make your dream happen, right, And what ultimately what 0:16:28.320 --> 0:16:32.640 he was saying was that it is not as easy 0:16:32.680 --> 0:16:35.680 as it sounds to come to Silicon Valley with an 0:16:35.720 --> 0:16:41.840 idea and people just started throwing money at you. And so, yeah, 0:16:41.920 --> 0:16:43.880 and I want to get your take on this, because 0:16:44.120 --> 0:16:47.360 there are a lot of people who see the marketing 0:16:47.480 --> 0:16:49.800 that comes from ventia capitalists like, hey, we want to 0:16:49.800 --> 0:16:52.680 hear your thing. Hey, we wanna, you know, invest in 0:16:52.720 --> 0:16:55.640 the best black startups. We all believe we have the 0:16:55.680 --> 0:16:59.480 best black startup and then we run into these brick walls. 0:16:59.480 --> 0:17:03.320 So you ask some perspective to the marketing of venture 0:17:03.400 --> 0:17:08.080 capital and specifically Silicon Valley and the for the frustrated 0:17:08.680 --> 0:17:12.840 entrepreneur who's running into no afternoon. Well, there's a there's 0:17:12.840 --> 0:17:14.879 a lot to unpack there. I think let's just start 0:17:14.880 --> 0:17:18.400 with Michael's observation. And I've heard him say this before. Look, 0:17:18.440 --> 0:17:23.200 it's hard to raise money as an entrepreneur or as 0:17:23.280 --> 0:17:27.440 as a GP, no matter what gender or ethnicity. Someone 0:17:27.560 --> 0:17:30.720 is right, it's it's hard, especially you know, seed stage, startup, 0:17:30.760 --> 0:17:34.640 first time entrepreneur, fund one for a g P. All 0:17:34.720 --> 0:17:36.640 of those things are hard. You know, you've got nine 0:17:37.080 --> 0:17:40.280 problems and if if you're black, you've got a hundred, 0:17:40.359 --> 0:17:42.440 if you're a black female, if you have a hundred one, 0:17:42.600 --> 0:17:45.760 and you know that hundred and hundred one, those are 0:17:45.840 --> 0:17:49.479 really big relative to the other nine. But look, it's 0:17:49.520 --> 0:17:52.479 just to say that it's just hard. In general. I 0:17:52.520 --> 0:17:55.520 think what ends up happening for a lot of the entrepreneurs, 0:17:55.560 --> 0:18:00.199 what we've heard within the last eighteen months, you know, 0:18:00.240 --> 0:18:03.719 in the aftermath of the unfortunate killings of Brianna Taylor, 0:18:03.720 --> 0:18:07.280 George Floyd, the countless others before and after, is a 0:18:07.320 --> 0:18:11.040 willingness and an openness to want to for venture capitalists 0:18:11.080 --> 0:18:15.280 to want to be at least perceived as embracing new 0:18:15.320 --> 0:18:17.760 deal flow. And I think that's that's a good thing. 0:18:17.800 --> 0:18:20.760 There's a lot of sincerity by some, you know, I've 0:18:20.800 --> 0:18:23.359 talked to some and I believe they are sincere and 0:18:23.400 --> 0:18:27.000 we've actually seen some some you know, companies founded by 0:18:27.240 --> 0:18:30.919 black entrepreneurs received funding. But look, let's let's you know, 0:18:31.040 --> 0:18:34.359 be honest that a lot of it is also just 0:18:34.359 --> 0:18:36.600 just talk as well. And so you know, I think 0:18:36.600 --> 0:18:38.200 what we need to do is we need to keep 0:18:38.200 --> 0:18:40.200 track of, you know, who we're saying these things and 0:18:40.440 --> 0:18:44.000 hold them accountable. We also need to move beyond this 0:18:44.119 --> 0:18:46.959 this notion of hey, you know, I'm happy to have 0:18:47.080 --> 0:18:50.120 office hours to mentor people. I mean, there's there's been 0:18:50.119 --> 0:18:53.240 more than enough mentoring. Like we're we have oversupply on 0:18:53.359 --> 0:18:57.000 mentor and we're undersupply on the ability to actually have 0:18:57.080 --> 0:18:59.760 folks writing checks. That's that's really where the demand is. 0:18:59.800 --> 0:19:01.679 There not really a whole lot of demand at this 0:19:01.760 --> 0:19:05.560 point for mentorship. There's there's demand for you know, write 0:19:05.560 --> 0:19:08.560 a check from my from my startup. But you know, 0:19:08.640 --> 0:19:11.440 we we have to again recognize that this is this 0:19:11.520 --> 0:19:15.520 is a journey. It's a hard process for entrepreneurs, and 0:19:15.800 --> 0:19:17.919 you know, let's be honest. You know a lot of 0:19:18.000 --> 0:19:20.240 companies are going to fail. But I think what's most 0:19:20.280 --> 0:19:23.640 important is people want to feel like they were given 0:19:23.800 --> 0:19:27.560 a shot, that is a level playing field, and they're 0:19:27.600 --> 0:19:31.439 given the same opportunity as a Mark Zuckerberg want to be. 0:19:31.560 --> 0:19:33.520 That also walks through the door. I think as long 0:19:33.560 --> 0:19:36.119 as we feel like it was a fair process, we 0:19:36.160 --> 0:19:38.960 actually had an opportunity, I think that that's the most 0:19:39.000 --> 0:19:40.840 important thing, because then it saw on us to be 0:19:40.880 --> 0:19:45.959 able to perform. I love that, um speaking of you know, 0:19:46.000 --> 0:19:49.560 the Myn Taylor's, I'm sorry. The mod Arebreys. The Brianna 0:19:49.560 --> 0:19:52.000 Taylor is George Floyd's. There was an article you wrote 0:19:52.040 --> 0:19:55.800 about a year ago. Now, Um, I'm a VC but 0:19:55.880 --> 0:19:58.119 still a black men in America, and there was a 0:19:58.200 --> 0:20:00.840 line in it I thought I found really interesting and 0:20:00.880 --> 0:20:03.439 you talked about and I'm gonna paraphrase a little bit 0:20:03.480 --> 0:20:06.119 because it makes more sense for me this way as 0:20:06.200 --> 0:20:09.760 a politician. It is now time to create legislation that 0:20:09.800 --> 0:20:12.400 will undo the damage of the past centuries to black 0:20:12.760 --> 0:20:15.520 to the black community, or resign or be voted out 0:20:16.000 --> 0:20:20.479 so those politicians that are capable can make the changes necessary. Um, 0:20:20.560 --> 0:20:25.119 how has legislation kept particularly would be black founders and 0:20:25.280 --> 0:20:30.880 vcs from having opportunities to build wealth, you know, generating enterprises. 0:20:32.200 --> 0:20:35.440 You know, it's why that's that's a great question, because 0:20:36.240 --> 0:20:40.840 I think when we think historically about you know, we 0:20:40.880 --> 0:20:42.919 can go all the way back and just look at 0:20:43.000 --> 0:20:48.720 legislation that prevented black you know, um families from being 0:20:48.720 --> 0:20:52.080 able to own real estate. You know, the federal government 0:20:52.160 --> 0:20:56.640 actually worked with state and local governments to to put 0:20:56.680 --> 0:21:00.240 processes in place. You know, redlining is the one that 0:21:00.400 --> 0:21:02.600 comes to mind. But you know, it was more than 0:21:02.640 --> 0:21:06.639 just redlining. It was also the the affordable loans that 0:21:06.680 --> 0:21:10.120 were done after the New Deal to be able to 0:21:10.240 --> 0:21:14.439 ensure that people could have a smaller down payment and 0:21:14.640 --> 0:21:17.400 a longer timeline, you know, twenty years, to be able 0:21:17.480 --> 0:21:21.080 to make smaller payments, to allow people to actually afford 0:21:21.119 --> 0:21:24.199 to buy homes. The g I Bill, when you know, 0:21:24.359 --> 0:21:27.320 folks returned from World War Two, the ability for really 0:21:27.359 --> 0:21:30.119 with almost no down payment to allow g I s 0:21:30.200 --> 0:21:33.160 to be able to purchase homes. And when we look at, 0:21:33.920 --> 0:21:36.600 you know, how many black folks were actually able to 0:21:36.640 --> 0:21:39.840 participate in those programs, you know, the numbers were very small. 0:21:39.880 --> 0:21:42.840 The government actually stepped in at the federal level for 0:21:42.960 --> 0:21:45.240 the programs put in place after the New Deal to 0:21:45.320 --> 0:21:48.840 actually that's how redlining started. You know. They basically said, 0:21:48.880 --> 0:21:51.120 you know, if there were any black folks living in 0:21:51.119 --> 0:21:55.000 those districts, then the you know, the area wasn't eligible 0:21:55.119 --> 0:21:56.679 for a loan. And what did that do. Well, it 0:21:56.720 --> 0:22:00.240 prompted legislation at the local level to be able to say, 0:22:00.280 --> 0:22:04.040 you know, through homeowners associations and through city, um, you 0:22:04.040 --> 0:22:07.080 can you know, you can't sell to a black person, right, 0:22:07.119 --> 0:22:10.560 And so those have had damaging effects that you know 0:22:10.920 --> 0:22:12.720 that are going to haunt us for you know, at 0:22:12.800 --> 0:22:15.800 least another I think another hundred years at a minimum. 0:22:16.359 --> 0:22:19.600 So you know that that's the damage that that legislations 0:22:19.640 --> 0:22:22.160