The murder of George Floyd and its emotional aftermath has brought the severe lack of representation of black people in the startup world to the forefront.
The main data point we have been referencing to illustrate this disparity in the startup world is revealing–just 1 percent of the amount of funding flows to black founders in the U.S
But months before the events of the past several weeks, a trio of black founders set out to change that statistic in a meaningful way by raising money for their new fund, Collab Capital.
Managing partners Jewel Solomon Burks, Justin Dawkins and Barry Givens are on a mission to provide black businesses with both the funding they often lack when looking to scale their ventures and the social resources many often find difficult to tap into.
Unlike many venture funds or accelerators dedicated to funding people of color or diverse founders, Atlanta-based Collab Capital is unapologetically emphatic about its focus on only investing in black founders.
Its goal is to raise a $50 million fund that invests in a way that is different from traditional venture funds: A profit-sharing model versus giving capital for equity. The trio is on track for a first close of $10 million by late August. So far, LPs include Kauffmann Foundation and hip-hop gospel artist Lecrae.
The trio are an impressive bunch.
Burks sold her startup Partpic to Amazon in 2016, and was recently tapped as head of Google for Startups, U.S., where she works to level the playing field for underserved startup founders.
Serial entrepreneur Dawkins is also founder of social impact pre-accelerator Goodie Nation, which helps everyday people and entrepreneurs “discover a role in an innovative process designed to solve some of the world’s toughest problems.” In 2017, he was named Atlanta’s first Google Digital Coach.
Givens created the automated bartender via his startup, Monsieur. He also serves as the managing director for the Techstars Social Impact Accelerator where he invests in 10 companies per year “striving to make a positive impact on underserved communities, underrepresented people, or the sustainability of the planet.”
A plan forms
The trio, who had been friends for years, came together in late 2018 to formalize their efforts to help other black founders in the startup and innovation space.
“We started our companies within six months of each other so we grew up in the space together,” Dawkins said. “When Jewel and Barry exited their companies, we saw an opportunity to be more impactful. We’d advised, mentored and helped as much as we could around noncapital things.”
The trio had reached a point where they realized they needed to address the challenge of access to capital. So they launched Collab Studio as a resource hub for entrepreneurs. In the third quarter of last year, they started to raise a fund and by March was nearing a first close. Then the coronavirus pandemic hit and potential LPs had to put things on hold.
Now, the trio has resumed its fundraising efforts so they can write their own checks. Today marks Collab Capital’s first investment, a $500,000 infusion into Hairbrella, maker of an innovative rain hat. Founded by Tracey Pickett, the company has over $1 million in sales.
Moving forward, Collab Capital seeks to partner with small family offices and other funds that want to invest in more black entrepreneurs but don’t have the access to founders or companies.
“This [Floyd] situation has opened a lot of eyes, and we are here to help others diversify their own investments by investing in us as a fund,” Givens said. The founders are there. Last time Collab held a pitch competition for black founders, more than 420 founders applied.
In general, Collab believes the future of VC needs to be more inclusive.
“Innovation doesn’t have a color,” Dawkins told Crunchbase News. “And with our profit-sharing model, we’re here to help companies who don’t want VCs to take large sums of equity and wait for exits.”
Photo: Collab Capital partners Barry Givens, Jewel Solomon Burks and Justin Dawkins. Courtesy of Collab Capital.
Blogroll Illustration: Dom Guzman
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