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Speaker 1: Term sheets. The Afro Tech mini series available on YouTube

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Speaker 1: about venture capital in New York City February. Richard Kirby

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Speaker 1: is general partner at Equal Ventures, to VC firm based

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Speaker 1: in New York City. But we're sitting on set discussing

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Speaker 1: the value of venture capitalists brings or should bring outside

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Speaker 1: of a bag of money to a startup. You had

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Speaker 1: a deep pockets are necessary, but sometimes it's not all

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Speaker 1: the startup needs to thrive. Richard talks about it. We

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Speaker 1: talk to our series every two weeks. We've got scheduled

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Speaker 1: sessions so that we can ask them, you know, how

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Speaker 1: things going, how you how could be helpful? Because when

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Speaker 1: you're running a company, you're too busy. You can't think

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Speaker 1: of like, how can will help me? Or rich help me?

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Speaker 1: You need to have scheduled time for them to ask

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Speaker 1: where your needs right now? And how can I be helpful?

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Speaker 1: Sometimes that maybe you know, I need to hire a

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Speaker 1: VP of engineering, Can you help me? Sometimes that means

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Speaker 1: I'm getting ready of the fundraise. I needed practice, I

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Speaker 1: need to get story right, I need to figure out

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Speaker 1: which investor I should be targeting. And sometimes that means hey,

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Speaker 1: we're thinking about changing our business like we were doing

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Speaker 1: this today, we think it makes more sense of pivot

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Speaker 1: ins of the direction. Can we write our strategy and

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Speaker 1: our vision value to get a center like is this

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Speaker 1: the right path for us? And so it's a variety

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Speaker 1: of things. But what we try and do is be

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Speaker 1: practive and be helpful and make those conversations happen, because

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Speaker 1: it's really hard to elicit how a founder can you

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Speaker 1: help without asking that question. The first place I'm will

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Speaker 1: Lucas and this is black tech, green money. I'm gonna

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Speaker 1: ensoe this you with some of the biggest names, some

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Speaker 1: of the brightest minds and brilliant ideas. I feel black

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Speaker 1: in building or simply using techis of kit your bag.

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Speaker 1: This podcast is for you. Nasie James, founder and managing

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Speaker 1: partners Zeo Capital Partners in New Washington, d C based

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Speaker 1: inclusive investment vehicle focused on partnering with exceptional management teams

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Speaker 1: with diverse backgrounds and skill sets, narrowing America's wealth and

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Speaker 1: skills gap in the world of VC. Just six years

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Speaker 1: ago and then I was last year that he closed

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Speaker 1: on an oversubscribed first fund of over sixty two million dollars,

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Speaker 1: making one largest funds today raised by a solo GP,

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Speaker 1: originally only targeting twenty five million, Having raised about two

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Speaker 1: and a half times more than he wanted to, I

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Speaker 1: thought he was the perfect person to give us the

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Speaker 1: one on one a vented capital help us understand this industry. So,

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Speaker 1: adventure capital fund of fund is essentially a pool of capital.

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Speaker 1: That is your institution. You're managing other people's capital, and

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Speaker 1: it can come from different types of entities. Right, you

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Speaker 1: have private foundations, you have high number of individuals, you

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Speaker 1: have universal endowments, corporations, funds of funds, sovereign wealth funds,

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Speaker 1: pension funds. So these are entities that to invest in

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Speaker 1: managers such as myself or venture capitalist UM too to

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Speaker 1: execute a strategy right that with with the goal of that,

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Speaker 1: you know, producing top top towerent to whatever dollar amount

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Speaker 1: they invest into that fund. Their hopes is to get

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Speaker 1: a five, ten, twelve returned back in their capital. And

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Speaker 1: they do that UM by way of evaluating fund managers

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Speaker 1: such as myself, who have unique strategies that that allow

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Speaker 1: them to go out and source invests and help scale

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Speaker 1: early stage entrepreneurs, growth state entrepreneurs depending on their stage

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Speaker 1: of investment focus and so UM So, yeah, that that's

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Speaker 1: that's that's an example of of adventure fund. Again to SEP.

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Speaker 1: Two entities, you have the general partner, you have limited partners.

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Speaker 1: General partners go out and fund raised from limited partners.

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Speaker 1: Womited partners believe, you know, even the minsion believe in

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Speaker 1: the thesis, and that allows the general partner to go

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Speaker 1: out and and and put that capital to work. So

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Speaker 1: if you can starkly define the difference between that and

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Speaker 1: an angel investor for our audience, could you do that? Yeah,

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Speaker 1: A angel investing is, first of all, is it is

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Speaker 1: an accredited investors very typically high in network individuals, or

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Speaker 1: you have full autonomy over your own capital um. You're

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Speaker 1: you're not reporting into a limited partners like a venture fund.

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Speaker 1: You can invest in in as little as many companies

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Speaker 1: you can. You don't have a You may have your

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Speaker 1: own your own strategy in terms of in terms of

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Speaker 1: your check size and the type of category sectors you

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Speaker 1: feel comfortable investing in thematic themes. You may want to

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Speaker 1: focus on women and people of color, for example, but

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Speaker 1: you typically it's your it's your own capital. I think

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Speaker 1: another component of angel investing is that you often partner

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Speaker 1: with other aims as well, which is called an angel's syndicate. Essentially,

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Speaker 1: the ability to consolidate your capital into a financing round

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Speaker 1: that allows you to be a bit more competitive into

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Speaker 1: getting into into competitive deals. And so maybe your tenth

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Speaker 1: or twenty chat and movement deal into a certain company

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Speaker 1: that's raising. But if you can collaborate with other angel

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Speaker 1: investors and make that make thousands knowlledge to go into

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Speaker 1: a total of a five thousand dollar pool of capital

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Speaker 1: or other individuals, that's that's a more competitive or also

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Speaker 1: strategic way of winning a cap table as it relates

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Speaker 1: to an institutional on your partnering with other limited limited

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Speaker 1: partners as I alluded to earlier. But then you also

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Speaker 1: have a very strict strategy. You have a portfolio construction

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Speaker 1: that you have to um important that you that you

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Speaker 1: buy by. There is reporting mechanisms you have to you

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Speaker 1: have an annual meeting, you have really reporting and financial reporting.

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Speaker 1: You have updates on the market that you want to

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Speaker 1: share to your LP. It's a more structural way of

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Speaker 1: of deploying capital, just given that you have their part too,

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Speaker 1: who are believing in you to manage your money and

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Speaker 1: be good. Great sewer is a capital um and efforts

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Speaker 1: to return the return, their return their their capital again

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Speaker 1: by ten, pickteen, twenty x. And so so there's a

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Speaker 1: tony and then there's like this this way of being

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Speaker 1: UM a bit more structured. Yeah, and you've said a

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Speaker 1: couple of terms that that I want to be clear

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Speaker 1: what that we define. Also, is these idea of a

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Speaker 1: limited partner in the general partner UM, can you describe

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Speaker 1: what those are? Yeah? So the limited partner will is

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Speaker 1: the money behind the money. It's what people like to

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Speaker 1: call it is. It is the It is the capital

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Speaker 1: that allows the general partner to go out and invest

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Speaker 1: in companies. And so the limited partner again is UM.

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Speaker 1: Several types of entities. There are university endowments, so UM

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Speaker 1: for zeal for example, we have UH. We have fifty

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Speaker 1: six limited partners, most of which are high network individuals

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Speaker 1: as as I define earlier, but we also have HPC

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Speaker 1: use like Hanton University. Right. We have UM private foundations

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Speaker 1: like Sloan and afropicts Loan Foundation and Skoll Foundation. We

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Speaker 1: have institutions or corporations like UM, PayPal and UM and

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Speaker 1: Bank of America. Synchrony Financial Truists are largest investor. And

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Speaker 1: then we have technology companies like Google as well and

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Speaker 1: family offices like Dairy Community Investments. Who these are entities,

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Speaker 1: family offices, corporation and the technology companies UM Universally and

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Speaker 1: downmentspc US and and family offices like the Airy Community Investments.

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Speaker 1: And then like notable individuals such as Jason Green from Emergence,

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Speaker 1: Mark Perry from n e A A, Josh Copeland from First

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Speaker 1: Round Capital, just to name a few that are who

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Speaker 1: have many many view its history. Investors who who use

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Speaker 1: their personal capital to invest as a limited partner into

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Speaker 1: into the GP. The GP is myself I managed to

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Speaker 1: fund and managed their capital and also the operations of

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Speaker 1: the day to day adventure zeal Adventure fund itself. And

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Speaker 1: so that's everything from sourcing to conducting diligence to UM

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Speaker 1: writing the investment memo, going to our art our investment

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Speaker 1: committee that gives us the thumbs up gumbs down to

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Speaker 1: ward on a deal. And so it's the operational day

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Speaker 1: to day is is what the the GP essentially um

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Speaker 1: UM manages and so UM and so those are the

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Speaker 1: two differences. But but it's so important that the two

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Speaker 1: p is overly communicating is in close contact UM with

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Speaker 1: the LPs. I think what's also really unique about at

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Speaker 1: least for Zeal, is that the our limited partners are

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Speaker 1: not just you know, they're not just invested in the front,

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Speaker 1: but they are also what we call you know, we

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Speaker 1: called to change a core mission and mine investors. So

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Speaker 1: these are ourtrtugic investors. Given that we're investing in the

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Speaker 1: pintach category. They support us outside of capital. They help

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Speaker 1: us think about the market dynamics across the thingtech industry,

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Speaker 1: as well as offering other resources internally as well, so

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Speaker 1: that that really upscene, that increases our value proposition to

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Speaker 1: look look to look to add just cale to our

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Speaker 1: truck bounds. That just getting Zeal the the investment team.

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Speaker 1: They're also setting the extension of our of our zero

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Speaker 1: paying not being a little apartments and so um when

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Speaker 1: you look at a lot of the backgrounds of people

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Speaker 1: who are GPS in a fund, they run funds, so

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Speaker 1: you think about um, I mean, they run the gamut

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Speaker 1: of backgrounds. They they've been startup founders, they've been you know,

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Speaker 1: through business school, and they just went right into investing.

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Speaker 1: Who should consider starting a fund? You know, first of all,

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Speaker 1: I firmly believe and I am a prime witness of

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Speaker 1: UH indicator of it that there's no cookie cutter approach

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Speaker 1: and starting adventure fund you can you don't have to

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Speaker 1: go to business I didn't go to business school. You

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Speaker 1: don't have to be a graduate of the premier universities

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Speaker 1: for example. I do think it is important for you

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Speaker 1: to have your arms wrapped around the the entrepreneurial ecosystem,

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Speaker 1: recognizing where to find startups right and and and and

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Speaker 1: for you to build a reputation a relationship with that ecosystem,

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Speaker 1: with those founders. I think people talk about track record,

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Speaker 1: and it usually and rightfully so it does mean what's

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Speaker 1: your track record in terms of investing and quality companies

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Speaker 1: that have gone on to outperform realize returns and you know,

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Speaker 1: become unicorns and gone to excit etcetera. And and that

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Speaker 1: that's usually a great indicator of your your investment acutant.

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Speaker 1: But I also think that the the indicator of an

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Speaker 1: excellent track record are those who have unique deal flow right,

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Speaker 1: your ability to source companies not just coming from very

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Speaker 1: few places, but your unique um reputation and leadership across

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Speaker 1: UM ecosystems that unfortunately have been left out and also

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Speaker 1: yield investibal entrepreneurs, many of which, uh you know are

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Speaker 1: women and people of color for example, And so I

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Speaker 1: do think those that have the strong reputation across um,

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Speaker 1: across the broader entrepreneur community is very important. I think

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Speaker 1: one who did, I do think it does help that

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Speaker 1: you've managed to whether it's your own personal capital or

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Speaker 1: you raise a small chunk of capital, to put that

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Speaker 1: capital to work and not only invest capital until its companies,

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Speaker 1: but to to share two LPs your narrative around the

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Speaker 1: value add you you did for those companies, right? What what?

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Speaker 1: What was the very specific value add you added to

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Speaker 1: those companies, whether it was helping them build their team

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Speaker 1: or helping them think thoughtfully about their go to market strategy,

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Speaker 1: helping them think thoughtfully about their product, their brand management,

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Speaker 1: getting their product into the market, getting them as a

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Speaker 1: leader into the into the market, making sure that they're

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Speaker 1: they're they're they're they're positioning themselves as a market leader,

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Speaker 1: and so so that those are positive signals that you

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Speaker 1: are you can be a great candidate to start to

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Speaker 1: start a fund. Now, I do think there takes a

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Speaker 1: good skill set. You can have your arms wrapped around

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Speaker 1: the entrepreneur. The entrepreneur ecosystem, but probably not have the

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Speaker 1: best investment acum in terms of how to how to

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Speaker 1: think about term sheets, how to think about your investment memos,

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Speaker 1: how to manage your LPs, how to even go out

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Speaker 1: and and nowhere to find LPs. I think there's a

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Speaker 1: certain type of the beauty of having a possible co

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Speaker 1: founder is important, and so I think I think that

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Speaker 1: is that could be very beneficial of not only just

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Speaker 1: having someone who who has their arm wrapped around the

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Speaker 1: unique entrepreneur ecosystem, but also someone who has some form

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Speaker 1: of investment acumen, who can who understands the the ins

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Speaker 1: and outs of putting capital to work is important as well.

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Speaker 1: So when you think about particularly black vcs, how important

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Speaker 1: to black founders is it to have people you know

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Speaker 1: from our backgrounds, perhaps from our perspectives, because we're not

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Speaker 1: all monolithic, but perhaps who you know, maybe a little

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Speaker 1: bit more willing to hear these stories. So we hear

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Speaker 1: so often about you know, if I if I came

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Speaker 1: to you with something, let's say, you know, wellness product

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Speaker 1: or a beauty product. We hear these stories of VC saying,

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Speaker 1: you know, well, is there really a market for that?

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Speaker 1: Obviously there's a market for that. But we've heard these

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Speaker 1: horror stories. So how important is black VC. Well, it's

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Speaker 1: important because it's at least and we all talk the

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Speaker 1: few while there's still continues to be a very few

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Speaker 1: VC black vcs in the industry. We recognize that if

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Speaker 1: we are not proactively leaning into our own people, are

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Speaker 1: you know, black entrepreneurs UM. Then on the one hand,

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Speaker 1: it's not helping them obviously raise capital, but it's also

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Speaker 1: you know, they're they're they're not feeling as if their

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Speaker 1: product there the vision is being heard. And in many cases,

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Speaker 1: as you alluded to their industries, that UM that we

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Speaker 1: that we that we actually do you understand more so

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Speaker 1: because of personal experiences and when you are I do

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Speaker 1: think there's a there was a responsibility as a black

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Speaker 1: investor to lean into culturally relevant culturally relevant um UH

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Speaker 1: ideas that you know. Unfortunately, most I would say white

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Speaker 1: investors probably would not understand based on their lack of

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Speaker 1: personal experiences. And so there is UH there, there is

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Speaker 1: there is power in black FECs UM looking to invest

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Speaker 1: in black entrepreneurs, especially in ideas that that we understand

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Speaker 1: the market opportunity, We understand that the the overall demand

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Speaker 1: UM that there are people that are willing, particularly black

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Speaker 1: folk people of color, who are who are willing to

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Speaker 1: pay for this product. It's it's power when when when

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Speaker 1: black pecs have the capability and the autonomy to deploy

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Speaker 1: capital into black entrepreneurs. And I think it's it's more

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Speaker 1: so because we we we understand, you know, we understand

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Speaker 1: more clearly than a traditional investor, especially as it relates

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Speaker 1: to some of the more culturally relevant, unique tools and

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Speaker 1: ideas that that that we see demand and that unfortunately

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Speaker 1: traditional investors haven't had the fortitude mainly because of personal

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Speaker 1: experiences and so but I it's it's exciting because we

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Speaker 1: also see the continuous continue to hear those horror stories.

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Speaker 1: We see items of excellence. We see companies that have

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Speaker 1: gone on to do quite well in the beauty space

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Speaker 1: and the e commerce space, UM where where where they

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Speaker 1: continues to be a great deal of of demand UM

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Speaker 1: from from from black folk in general, in terms of

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Speaker 1: in terms of consumer base. You talked a little bit

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Speaker 1: about like kind of the prerequisites, if I can use

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Speaker 1: that word of um, what it takes to get in

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Speaker 1: the game from an investment perspective, from being m A G.

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Speaker 1: P UM and that's kind of you know, just getting

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Speaker 1: in the game. What is because there's a difference between

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Speaker 1: the quantity and quality of people that you see at

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Speaker 1: from black investors at the seed stage versus Series A

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Speaker 1: and then even less of us at Series B and

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Speaker 1: very very very few of us at the Series C.

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Speaker 1: What are the prerequisites to graduate to those next levels

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Speaker 1: of venture capital investing. You gotta produce a top decimal return.

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Speaker 1: I mean you have to produce your your your portfolio

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Speaker 1: has to be strong. Like my my boss, the GP

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Speaker 1: hosses are LPs, right, we we can't move forward if

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Speaker 1: if our fund is not high performed, which is it

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Speaker 1: is important that you know, while we're proactively leading into

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Speaker 1: more African American and Latin next BIPOC entrepreneurs, it's important

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Speaker 1: that we're we're investing in quality UH and the entpreneurs

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Speaker 1: that we believe will and this is this is from

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Speaker 1: a GPS lens and investor's lens. Will UM be a

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Speaker 1: top to a top performer in our portfolio that will

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Speaker 1: return the entire fund? Right is what we often UH

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Speaker 1: seeking out in every in every entrepreneur and every founder

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Speaker 1: that we invest in. And so in order for us

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Speaker 1: to can continue to elevate from stage, whether you call

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Speaker 1: it stage or from from fund one all the way

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Speaker 1: to fund five and beyond. We have to. It's importantly

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Speaker 1: we we we we produced a top desk, smell top

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Speaker 1: quartel to very least um fun performance. Now you're alluding

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Speaker 1: to different stages. Now, I think it's important to note that, UM,

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Speaker 1: you know they're they're venture fans who prefer, like myself

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Speaker 1: that I think, you know, the best stage is our state,

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Speaker 1: and that's where I just get excited the most. I

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Speaker 1: never to be in this the duration of my time

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Speaker 1: in this business. I do not receive golf going into

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Speaker 1: gross state, Series B and beyond, I I enjoy way.

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Speaker 1: I think there's continues to be a great deal of

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Speaker 1: opportunity and getting a band getting excited UM by the way,

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Speaker 1: partnering with companies who are from from napkin to to

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Speaker 1: to post product to early signs of revenue and UM.

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Speaker 1: And I think that that sweet spot is incredibly important. Now,

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Speaker 1: I do think UM, as you as you build, as

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Speaker 1: you build your your your your investment, franchise, your platform, UM,

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Speaker 1: you start to UM gain access to deals that are

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Speaker 1: a later stage. Right, And I do think so sort

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Speaker 1: of to my earlier point on having unique strategy having

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Speaker 1: UM access to early set entrepreneurs. UH, if you can

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Speaker 1: prove to your LPs that YouTube also have early access

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Speaker 1: to later stage deals, now you're able to build a

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Speaker 1: full franchise that will allow allow you to make sizable

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Speaker 1: investments into later stage deals. Now, the difference now is

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Speaker 1: that your LPs are writing your your your fund itself

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Speaker 1: is much larger than a sixty million is staledged fund

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Speaker 1: that that we have. Your fund is going to have

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Speaker 1: to be two hundred to fifty five hundred million, maybe

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Speaker 1: a billion UM dollar fund in order for you to

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Speaker 1: write a sizeable check that allows you to have significant ownership.

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Speaker 1: So when that fund, when when that company outperforms, goes public,

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Speaker 1: or gets acquired, you can reap the benefits from that,

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Speaker 1: from that from the from those from that company, given

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Speaker 1: that you wrote a sizeable check. But you can't write

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Speaker 1: a small check into a Series B company just given

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Speaker 1: the valuation more than likely um it's going to be

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Speaker 1: a billion dollars between a half to a billion dollar valuation,

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Speaker 1: and so it just requires a different type of infrastructure.

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Speaker 1: As you matriculate into a into the later into the

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Speaker 1: later stage UM into the later stage space, but that

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Speaker 1: the sweet spot for for us is UH is early

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Speaker 1: stage for sure, and I don't see UM at least

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Speaker 1: today ourselves going into the later stage space. You mentioned

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Speaker 1: your funds sixty million dollar fund. This is your debut

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Speaker 1: fund and UM one of the largest by a solo

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Speaker 1: GP to date UM, and you are initially just targeting

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Speaker 1: twenty five million. If I understand that correctly, why all

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Speaker 1: the why all the demand, why the over subscription, Why

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Speaker 1: is all this money flowing into NASA UM? You know

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Speaker 1: will when when I first started, you know, I took

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Speaker 1: a step back and recognize the supply and demand UM,

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Speaker 1: the demand that continues to exist across the two categories

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Speaker 1: I've been leaning in over the past seven years, which

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Speaker 1: has been the future of work. So the role that

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Speaker 1: technology plays to UH narrow the skills gap between education

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Speaker 1: and employment pathways, and from a financial technology perspective, the

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Speaker 1: role that financial technology could play to remove barriers and

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Speaker 1: and provide access to the and under bank consumer. But

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Speaker 1: at the same time that's mission and obviously there's a

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Speaker 1: clear impact there, but could constantly seeing also marketing in

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Speaker 1: across two verticals as well. So I you know you

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Speaker 1: know Buffett says, stay within your constancy, do that well,

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Speaker 1: and then scale. UM. I think you find most venture

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Speaker 1: funds going out to be journalists. I chose to be

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Speaker 1: a category specific fund that deals on top of my

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Speaker 1: track record after the past seven eight years where I

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Speaker 1: was head of education, head of the US Economic Opportunity

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Speaker 1: Fund at Building Capital, and then let a teen t

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Speaker 1: s four million dollar investment fund did an angel investing

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Speaker 1: as you two earlier. So I built up not just

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Speaker 1: the reputation across the entrepreneurs system UM, particularly though eCos

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Speaker 1: outside of sloping valley outside of New York at Buston,

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Speaker 1: but didn't ignore those ecosystems. But you kind of ensure

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Speaker 1: that that that I that I that my lens was

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Speaker 1: more inclusive that I that I that I was tapping

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Speaker 1: into UM entrepreneurs who were high quality investibal entrepreneurs and invested,

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Speaker 1: put put put that, put that capital to work and

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Speaker 1: invested in those companies. So that between and within that

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Speaker 1: experience yielded a top quartel track record. And then on

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Speaker 1: top of that, I did feel UM that I was

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Speaker 1: able to pull together a strong infrastructure UM to also

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Speaker 1: get around the that the the challenge of a a

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Speaker 1: solo GP that that's very challenging in in no matter

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Speaker 1: of your diverse manager or not, like it is challenging

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Speaker 1: to raise a fund to build a company UM based

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Speaker 1: on risk, number of risk factors right, and so UM

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Speaker 1: it was important that I had a strong advisory board

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Speaker 1: and had a strong opera and strong operating partners as

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Speaker 1: relates to post to us some value creation UM E

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Speaker 1: I R S my my two executive and manager and

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Speaker 1: residents both focusing on fintech and future of work and

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Speaker 1: analysts and a principle was very important. And then most

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Speaker 1: importantly limited partners network strategic These are fintech limited partners.

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Speaker 1: There were financial services limited partners, they were university endowments,

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Speaker 1: they were in UM membership organizations like the management that

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Speaker 1: coincided the Feture work UM category to being very intentional

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Speaker 1: in terms of how I how I thought about the

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Speaker 1: strategy UM and recognizing that there are companies that are

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Speaker 1: continuing to innate across these two sectors, and then also

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Speaker 1: building out the infrastructure that allows us to fully support

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Speaker 1: these entrepreneurs once they become zeal investment partners and then

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Speaker 1: helping them get reach their full potential and rescale and

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Speaker 1: so so that that Resonnate, I think that I think

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Speaker 1: the last thing I would say is that our inclusive

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Speaker 1: investing strategy resignated as well. I mean, that's our unique

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Speaker 1: strategy that allows us to widen our lens and best

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Speaker 1: in our companies to outperform, which is a five pronged

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Speaker 1: market back approach UM that I believe that is our

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Speaker 1: north star. I believe inclusive investing is the um a

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Speaker 1: matter of your story franchise like a INJ Resin or

401
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Speaker 1: light Speed or your emerging manager. I think if you,

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Speaker 1: if you implement this inclusive messing strategy, it will further

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Speaker 1: democratize entrepreneurship and access to capital where you find more

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Speaker 1: women and people of color, giving me a faious only

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Speaker 1: to play the capital. And I'm just unapologetic there. I

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Speaker 1: truly believe that there has to be a there has

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Speaker 1: to be a intentional way of thinking that the bunks

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Speaker 1: traditional way of forcing and investing in companies, and I

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Speaker 1: firmly believe that inclusive investing, when you lead with inclusion,

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Speaker 1: beginning with your team, that that allows you to over

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Speaker 1: end that share allocation and more of women people of

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Speaker 1: color were partner with twenty four entrepreneurs organizations across the

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Speaker 1: kographic inclusivity right, these are these are e s o s,

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Speaker 1: These are excelutive programs, incubators. Then there's your Number four

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Speaker 1: is your investment focus, which is UM fintech and future

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Speaker 1: of work. And number five is impact. We have very

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Speaker 1: specific impact metrics. We are capturing nine out of the

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Speaker 1: seventeen global Sustainable Development Goals UM, every founder assigned university

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Speaker 1: pledge UM. You're also scaling, ensuring that you're looking to

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Speaker 1: scale your your product and service into UM under under

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Speaker 1: resource community or or or or on behalf of under

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Speaker 1: under bank consumer, depending on your business model and so

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Speaker 1: very UM. I think the the infrastructure and the strategy

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Speaker 1: and the team I've been able to pull together UM

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00:28:29,560 --> 00:28:32,280
Speaker 1: has resonated with our with our LUNED partners, which yielded

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Speaker 1: a pretty substantial and investment fund. You you alluded to

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Speaker 1: this earlier. My final question. You talked a little bit

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Speaker 1: about the reporting and the meetings that you have to

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Speaker 1: do the structure of UM a venture capital fund. When

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Speaker 1: does a g P have free will to write a

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Speaker 1: check versus having to go back to LPs and or

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Speaker 1: is that how it works? Does os A GP have

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Speaker 1: to go convince the LPs that this is an investment

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00:29:04,360 --> 00:29:11,880
Speaker 1: we should make. Yeah, that's so. So. So first, the

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00:29:12,160 --> 00:29:18,840
Speaker 1: LP invested in the GP because the LP believes in

436
00:29:18,960 --> 00:29:23,440
Speaker 1: him and her believes that they're going to fully execute

437
00:29:24,400 --> 00:29:28,360
Speaker 1: the strategy in which they pitched to the LP. Right,

438
00:29:28,440 --> 00:29:32,200
Speaker 1: and so for us, for example, we're focusing on companies

439
00:29:32,360 --> 00:29:35,680
Speaker 1: that are led by diverse management teams. They're rethinking the

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00:29:35,760 --> 00:29:40,360
Speaker 1: doting box of wealth from educational employment pathways to financial wellness.

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00:29:40,440 --> 00:29:45,160
Speaker 1: So fintag future of work. Now, if the seer goes,

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00:29:45,480 --> 00:29:50,760
Speaker 1: decides to go, UH decides to if the SIRI decides

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00:29:50,800 --> 00:29:54,880
Speaker 1: to go off and investigate and the energy company, that

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00:29:54,960 --> 00:29:58,680
Speaker 1: wouldn't flow right that that that would go outside of

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00:29:58,720 --> 00:30:02,960
Speaker 1: the So, but what is what is the GP asking permission?

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00:30:03,520 --> 00:30:06,120
Speaker 1: But is the GP asking permission to before he makes that,

447
00:30:06,840 --> 00:30:09,160
Speaker 1: before he writes that check or does he have to

448
00:30:09,200 --> 00:30:11,320
Speaker 1: answer when he gets to the meeting that hey you

449
00:30:11,400 --> 00:30:16,280
Speaker 1: wote this check? What's up with this? No? So, so

450
00:30:17,280 --> 00:30:21,400
Speaker 1: the only the only way that GP will have to

451
00:30:21,440 --> 00:30:24,880
Speaker 1: ask for permission back to the LPs, which is called

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00:30:24,920 --> 00:30:26,760
Speaker 1: the l pack. Right, So, your l pack is your

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00:30:26,840 --> 00:30:34,920
Speaker 1: limited partner um um limited partner UH committeealists, it's it's

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00:30:35,000 --> 00:30:38,959
Speaker 1: it's four or five usually no more than five investors,

455
00:30:39,440 --> 00:30:42,800
Speaker 1: five of their partners where your largest investors. So anytime

456
00:30:42,880 --> 00:30:46,120
Speaker 1: you have a a one off deal or deal that's

457
00:30:46,200 --> 00:30:49,360
Speaker 1: totally outside your your your strategy, you go to your

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00:30:49,520 --> 00:30:53,160
Speaker 1: l PAC committee and you ask you you explain the deal,

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00:30:53,920 --> 00:30:56,800
Speaker 1: You explain the the economic experiments, and how much you

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00:30:57,040 --> 00:31:01,800
Speaker 1: you're you would consider underwriting um. And again, this is

461
00:31:01,840 --> 00:31:04,040
Speaker 1: a deal that's outside of your strategy, and you get

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00:31:04,080 --> 00:31:08,840
Speaker 1: permission your l PAT to move forward on that deal. Right.

463
00:31:09,320 --> 00:31:13,280
Speaker 1: But but that that really happens, especially at the first

464
00:31:13,280 --> 00:31:16,080
Speaker 1: time fund managers. The first time fund manager, you want

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00:31:16,120 --> 00:31:18,840
Speaker 1: to stay within your strategy. You want to focus, you

466
00:31:18,880 --> 00:31:21,840
Speaker 1: want to practice what you've what you've shared, you want

467
00:31:21,840 --> 00:31:24,560
Speaker 1: to execute what you share to your LPs. And and

468
00:31:24,760 --> 00:31:27,600
Speaker 1: for that will there is no reason I should never

469
00:31:27,720 --> 00:31:30,040
Speaker 1: have to go back. I should never go to my

470
00:31:30,280 --> 00:31:34,240
Speaker 1: LPs for every deal I choose to invest in. Your

471
00:31:34,360 --> 00:31:37,960
Speaker 1: LPs are are trusting you with their capital, and you

472
00:31:38,560 --> 00:31:41,720
Speaker 1: you choose to invest into these companies that align with

473
00:31:41,760 --> 00:31:45,360
Speaker 1: your strategy. Now, who you do report to, who most

474
00:31:45,520 --> 00:31:48,040
Speaker 1: gps do report to you is what you call your

475
00:31:48,120 --> 00:31:50,720
Speaker 1: I C your Investment Committee. And so your i C,

476
00:31:51,000 --> 00:31:54,960
Speaker 1: your i C essentially are individuals who who are either

477
00:31:55,120 --> 00:31:58,040
Speaker 1: sometimes they can be your LPs, some some usually usually

478
00:31:58,040 --> 00:32:02,200
Speaker 1: they're not your LPs. There thought leaders you know within

479
00:32:02,320 --> 00:32:04,840
Speaker 1: the v C, or they may have strong domain expertise

480
00:32:05,520 --> 00:32:08,080
Speaker 1: in that in that particular category that can shape your

481
00:32:08,120 --> 00:32:12,520
Speaker 1: thinking on check your blind spots. But it's usually depending

482
00:32:12,600 --> 00:32:15,320
Speaker 1: on how your i C set up. They easually vote

483
00:32:15,600 --> 00:32:18,920
Speaker 1: for that company to move forward or they or they

484
00:32:18,960 --> 00:32:22,640
Speaker 1: don't and they give their reasons why um. But usually

485
00:32:22,720 --> 00:32:25,160
Speaker 1: the GP has finals say so. In our case, I

486
00:32:25,280 --> 00:32:28,680
Speaker 1: have finals say so on every deal, like they can

487
00:32:28,800 --> 00:32:32,120
Speaker 1: share their disagreement on a deal, but the seer has

488
00:32:32,240 --> 00:32:35,160
Speaker 1: finals say so on whether or not I want to

489
00:32:35,640 --> 00:32:38,440
Speaker 1: move forward with an investment in that deal. And so

490
00:32:38,640 --> 00:32:41,920
Speaker 1: far we have never had a deal. Out of nine deals,

491
00:32:42,000 --> 00:32:45,360
Speaker 1: so far, we haven't had a deal where an i

492
00:32:45,480 --> 00:32:47,280
Speaker 1: C member has said no, I don't think this is

493
00:32:47,280 --> 00:32:51,640
Speaker 1: a great deal. Reconsider. So, going back to your point,

494
00:32:51,680 --> 00:32:54,720
Speaker 1: I think the beauty of of being a g P

495
00:32:55,400 --> 00:32:58,840
Speaker 1: is that you have autonomy. You have autonomy to prove

496
00:32:59,360 --> 00:33:02,880
Speaker 1: deals at that that that will change the trajectory of

497
00:33:03,080 --> 00:33:06,360
Speaker 1: this of this founder putting a million putting two million

498
00:33:06,480 --> 00:33:10,400
Speaker 1: in that will allow them to fully execute their their strategy,

499
00:33:10,680 --> 00:33:13,960
Speaker 1: build their team, you know, build more, build on top

500
00:33:14,000 --> 00:33:17,560
Speaker 1: of their current product. And so I um, I think

501
00:33:17,680 --> 00:33:20,959
Speaker 1: that's that's that's the beauty of being adventure capital as

502
00:33:21,000 --> 00:33:25,080
Speaker 1: well as to as to us is to is to

503
00:33:25,160 --> 00:33:30,440
Speaker 1: be trusted with the limbing partner's capital, be be great

504
00:33:30,480 --> 00:33:36,160
Speaker 1: steward capital and and and and underwrite that capital into

505
00:33:36,960 --> 00:33:41,080
Speaker 1: honors who who allow your strategy and then you and

506
00:33:41,120 --> 00:33:43,479
Speaker 1: then you need But it works for the road cappens

507
00:33:43,560 --> 00:33:47,600
Speaker 1: because you start to a puts investor value creation into

508
00:33:47,680 --> 00:34:04,520
Speaker 1: that founder a capital. Black Tech Green Money is a

509
00:34:04,560 --> 00:34:07,360
Speaker 1: production to black the Afro Tech on the Black Affact

510
00:34:07,400 --> 00:34:10,279
Speaker 1: podcast network and I Heart Media and it's produced by

511
00:34:10,360 --> 00:34:14,600
Speaker 1: Morgan Dubonn and me Lucas, with additional production supported by

512
00:34:14,640 --> 00:34:18,359
Speaker 1: Love Beach and Marissa Lewis. Specially thank you to Michael

513
00:34:18,440 --> 00:34:21,920
Speaker 1: David Sadam Simpsons, Car Savon Jan you know like the wine.

514
00:34:22,400 --> 00:34:25,720
Speaker 1: Yes that's his real name. Learn more about my guests

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00:34:25,719 --> 00:34:27,360
Speaker 1: and other tech that struct that is it innovated to

516
00:34:27,360 --> 00:34:30,200
Speaker 1: afro tech dot com the video first of this episode,

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00:34:30,239 --> 00:34:32,480
Speaker 1: we'll drop to Black Tech Green Money on YouTube. Show

518
00:34:32,520 --> 00:34:36,839
Speaker 1: tapping enjoying black tech, green money. Leave us a five

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00:34:36,880 --> 00:34:42,320
Speaker 1: star rating on nine tuls Go Get your money, Be

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Speaker 1: in love,