April 20, 2021
4 minutes of reading
Comments expressed by Businessmen the contributors are their own.
Not all risky investment created or distributed equally. Only 1% is supported by VC the founders are Black and less than 2% Latinoalthough repeated research shows that companies have diverse leadership significantly outperformed their all-white, all-male counterparts.
In the world of venture capitalism, where data and returns drive decisions, it’s surprising that many VC firms don’t allocate capital to minority founders when data proves to be advantageous. Perhaps it is because more investors should stems from their intentions in economic empowerment and inclusion. It was the conversation Ajay Relan and Austin Clements had for more than a decade before deciding to launch an inclusive venture capital fund. Slauson & Co. this early year.
The company, named after a prominent street in South Los Angeles, has received backing from Ashton Kutcher, will.i.am, and PayPal, and will primarily invest in and guide underrepresented founders. Their ultimate goal is to build a new generation Technology and the technology support companies that have value in the customers they serve.
The couple is definitely not a space rookie. Relan is a successful investor from her work at Queensbridge Venture Partners and Community Entrepreneur. Clements is a former Principal of TenOneTen Ventures and the founding Chairman of PledgeLA, a citywide initiative to promote diversity, equity and inclusion in technology.
Recently, I sat down with this duo to learn more about their life experiences that led to a plan to democratize access to the business inspirationand how it could be a model in the future.
What drives the relative scarcity of venture capital for people of color?
Clements: In our industry, it’s called “pattern matching”. The thought was put out, “If a few successful founders end up going to certain schools, working at certain companies and looking like this, then why don’t I invest in that much? more like him? ” But the country’s rapidly growing demographics suggest that it may be time to start looking elsewhere.
Slauson & Co. How are these structures challenging?
Ingredient: Ajay and I both grew up just off Slauson Avenue, where we found that a lot of talent and ambition didn’t – and still didn’t – have access to resources, guidance, and capital that would allow them. Build the next biggest company.
Relan: When you are just a little person-business owner, you are wearing different hats and have to organize all of your tasks with very few tools and technologies that support your business. We are looking at this from the point of view that small businesses employ a significant percentage of Americans. We want to help support and reduce the daily struggles of running their businesses.
What will the fund’s average trading period and size be?
Clements: To move the needle, we need to be at the forefront of the loops at the earliest stage. We are often the first institutional commitment to an emerging company. We invest from $ 250,000 up to several million dollars, while helping to attract free investors in our network.
What red flags do you see when the founders tout VC?
Clements: The biggest red flag is when the founders don’t have a big enough vision for the company. If you are making money from VCs, a founder should find a way to create the top company in their portfolio.
How important do you feel to the founders in building personal branding?
Relan: It is extremely important to demonstrate your thinking leadership and personal worth in everything you do. Communicating those values to your consumers is important. The more you invest in your personal brand, the cheaper it is to attract customers or like-minded investors on your side. By being honest and imperfect, it gives people a chance to understand who you are. Your Life experience is your competitive advantage.
What lesson do you find yourself having to learn again and again?
Relan: Sow any cause meets the results. [Laughs]
Clements: I really enjoy Reimagine capitalism in a fiery world by Rebecca Henderson. She is an advocate of capitalism, but offers a thoughtful case of how we need to be more deliberate about our impact as it will ultimately enhance our prosperity.
What are your final thoughts on democratizing the entrepreneurial spirit?
Clements: We know that if we lower the entry barrier for small business owners to compete, it will disproportionately create wealth for people of color. We are not lowering industry standards, but simply building a court for outsiders Silicon Valley can join. By starting locally, we plan to be globally impactful, stimulating so economic and open doors are passed through for generations to come.