By Rey Idieu ’23 Associate
Angel investing and venture capital is an industry that continues to grow and prosper today. While the space is full of young and passionate founders and investors who face a challenge in the startup space, the challenge is all the greater for members of minority populations. More specifically, the African American community faces considerable barriers to entry beyond an already uphill battle. Let’s take a look at famous angels, venture capitalists, and founders who are paving the way for a future generation of black excellence in the venture capital space.
Unfortunately, in today’s society, we see a lack of diversity at the management, C-suite, and investor level. This isn’t true solely for black individuals seeking higher level roles. We see women and other minority groups excluded as well. The private sector is especially difficult when it comes to barriers to entry if you’re black. When looking into the private sector “Just 3% of US venture capital partners are black, according to a survey by NVCA and Deloitte”. That statistic is only geared toward VCs where angel investors and private equity firms have less than 1.5% of black GPs in their fund makeup. This proves that it’s important to highlight the companies and individuals who have successfully broken this upsetting pattern.
There are many amazing private firms I’d like to bring to light, but we’ll focus on just a few. One of the most prominent and largest black-owned firms is Vista Equity Partners. Vista was founded by Robert. F Smith in 2000 after a successful tenure at Goldman Sachs. The firm currently manages 96 Billion in assets with over 50 portfolio companies primarily focusing on software and technology.
African American Financial guru’s aren’t the only ones looking to maximize their return in the private sector. We now see athletes opening angel funds to create a way to invest in companies, founders, or verticals they agree with. 23 Time Grand Slam singles champion Serena Williams is a testament to this new investment space. Serena Ventures was founded in 2014 with the goal of enabling black and women founders.
Not only are these African American founders and managing partners promoting themselves as black owned firms, but others aren’t satisfied with lackluster media exposure claiming this is DEI in the private sector. Harlem Capital is led and owned by black individuals who also have the investment strategy of investing in African Americans and individuals in underserved communities.
One of the most effective initiatives that you as an individual to help the private sector ecosystem is to invest in African American founders. This will drive more deal flow in a space that is lacking tremendous capital. If you aren’t sure where to find founders, I’ve provided a link to help expedite your search. You may not be an investor in the private sector, but if you’d like to help African American angel investors, VCs, PEs, and Founders, share this insight to shed some light.
Rey is a senior from Bridgeport, CT who is currently pursuing a Business Administration major with options in Finance and Entrepreneurial Studies, and a minor in Sales. Reynaldo spent this past summer at Barnum Financial Group in the Advisor Scholar Program working under account executives on Financial and Investment planning in the world of fiduciary financial services. On campus, Reynaldo is a member of the Professional Sales Club and an executive board member of the Sigma Alpha Epsilon fraternity. Reynaldo is also a part of the Black Student Union on-campus, the Sales Club, and the Financial Partners Program. Reynaldo is in the final stages of creating a not-for-profit Organization for impoverished children of Haiti called Followme. Reynaldo joined the fund to gain valuable insight into the early-stage private equity market and what it takes to become a successful entrepreneur.