August 12, 2022

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Black Founders Matter Fund I Closes $3M in Committed Capital and Establishes Black as an Investment Vertical

Black Founders Matter Fund I Closes $3M in Committed Capital and Establishes Black as an Investment Vertical

  • BFM’s accessible venture-capital investing model is disrupting historical practices of pattern-recognition and benchmarking in venture capital startup evaluation
  • Community-centric vision and mission has led to the fund’s inclusion in high-profile startup rounds like Allyson Felix’s company, Saysh, and co-investments with Serena Williams and Issa Rae
  • All BIPOC and queer management team blazes new investment strategies to ensure inclusion of the under-capitalized Black startup ecosystem

Black Founders Matter, a fund that identifies Black-led ventures as an investment vertical, today announced it has attained $3 million in committed capital toward a planned $10 million Fund I.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220307005029/en/

Co-Managing Director Himalaya Rao-Potlapally (left) and Founder & Co-Managing Director Marceau Michel (right) of Black Founders Matter (Photo: Business Wire)

Separately, Black Founders Matter (BFM) announced a stellar initial tranche of 10 early-stage portfolio investments out of Fund I: participation in seed funding rounds for New York City-headquartered Hued, which in August closed a $1.6 million seed round; participation in the seed rounds for both New York City-based BIPOC female-led Glow Up Games and Allyson Felix’s Los Angeles-based Saysh during the second half of 2021.

BFM, initially formed by former startup founder Marceau Michel, is on a mission to disrupt the historical pattern-recognition bias in the venture-capital world. That bias has led to the exclusion of the underrepresented, especially Black-founded ventures and the overwhelming majority of the top-performing startup leaders for decades have been white men as a result.

“Black is the new vertical,” said BFM founder Michel. “The entire emphasis of our fund is about creating accessible venture capital for Black entrepreneurs and diverse innovative problem solvers. In the same way, we also want to be a resource to other emerging funds, to provide them access to high profile deal flow. Accessible venture capital represents the new wave of venture practice.”

Closing the Historical Funding Gap for Black Entrepreneurs

Michel and Managing Director Himalaya Rao-Potlapally launched the fund in 2020 and started to gain traction with individual and institutional investors.

The BIPOC and queer duo, are raising BFM’s fund in the spirit of a grassroots community-driven campaign. They are leveraging their combined relationships within the Black, Indigenous and people-of-color (BIPOC) community to share exclusive opportunities with LPs aligned with BFM’s mission of financial justice, diversity and inclusion.

Black founders have an extraordinarily difficult time raising capital. A record $147 billion worth of VC funding was invested in American startups during the first six months of 2021, Crunchbase News reported in July. Just 1.2% of that went to Black founders. Black people composed 13.4% of the U.S. population in 2020, according to the U.S. Census Bureau. Black women founders had obtained only 0.34% of all VC investment in 2021 through July 16, Crunchbase News reported. But the VC dollars flowing to those founders up to that point, $494 million, already had outstripped the 2020 total of $484 million.

“BFM looks for innovation outliers in their respective spaces and industries,” said Managing Director Himalaya Rao-Potlapally. “We are taking an intentionally new approach to generate venture capital success and financial returns. By shifting the focus off archaic pattern-matching, we are able to prioritize innovation and lean into the differences that make our companies successful. Black Founders Matter showcases new investment strategies that can be both financially lucrative and holistically inclusive of much needed diverse perspectives.”

BFM Investment Thesis & Initial Portfolio Investments

BFM’s investment thesis is industry agnostic. The firm prioritizes early seed startups, at the largest funding gap stage, with checks north of $100,000. They often syndicate with their network funds and participate in a startup’s first institutional-investment funding round. BFM has reserved half of its first fund to participate in follow-on investments. A central tenet of BFM’s strategy is to ensure that all its investments have a pathway to subsequent funding and liquidation. Black Founders Matter partners with industry-specific lead series A to series C firms to create a clear funding and network trajectory for its portfolio companies. In doing so, BFM ensures that its companies are resourced to scale and be acquired.

The firm’s mission-driven approach already has yielded big wins.

BFM co-invested with sports legend Serena Williams in New York City-headquartered Hued, which in August closed a $1.6 million seed round. The startup, founded by CEO Kimberly Wilson, has developed a digital-health platform that connects members of the Black, Indigenous and Latinx communities with health care professionals who understand patients of those respective cultures.

BFM also participated in a funding round with entertainment mogul Issa Rae in New York City-based Glow Up Games during the second half of 2021. Co-founded by CEO Mitu Khandaker and Chief Experience Officer Latoya Peterson, Glow Up Games develops and publishes mobile video games. Their first release is a companion game to the hit HBO series, Insecure.

The fund invested in the explosively popular Los Angeles-based startup, Saysh, during the second half of 2021. The shoe company is the brainchild of founder and president — and one of the most decorated American Olympians, with seven gold, three silver and one bronze medals — Allyson Felix.

Felix departed her former sponsor, Nike, in 2019 after the shoe company “wanted to pay [her] 70 percent less than [her prior contract, after the track star gave birth to a daughter in 2018],” she wrote in a New York Times op-ed. Due to public pressure and a congressional inquiry, Nike ultimately developed a new policy offering protections for its sponsored athletes who become mothers.

“Saysh aligned with us so well that we were able to negotiate one of the larger allocations in the round, in addition to creating direct access for our investors through an LP-driven SPV,” Rao-Potlapally said.

BFM also made its first investment during summer 2020 in the Portland-headquartered media company, A Kids CO About (formerly A Kids Book About). The company has gone on to raise a subsequent round at 5x its seed valuation, a testament to BFM’s investment thesis of investing early and realizing lucrative gains. The company has been featured on Oprah’s Favorite Things list and co-author books with LeVar Burton and Evelyn Yang.

About Black Founders Matter

Based in Portland, Oregon, Black Founders Matter is an investment firm that funds U.S. seed-stage ventures. Industry agnostic, BFM has a focus on Black-led and innovative deal flow from an array of sources, including startup accelerators, competitions, fund networks, open-source applications and universities. BFM operates on a syndication model, partnering to capitalize deals in seed and series A funding rounds. As a fully BIPOC and queer management group, the team utilizes their unique lived experience and connections to community to revolutionize who the decisionmakers are in mostly homgenous venture industry. Marceau Michel and Himalaya Rao-Potlapally started the fund in 2020. To learn more, please visit https://www.Blackfoundersmatter.org/.

Treble

Sarah Armstrong

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View source version on businesswire.com: https://www.businesswire.com/news/home/20220307005029/en/

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