Black Founders Matter Shifts Focus Towards Long-Term Stability, Plans for Second Fundraise
The Black Founders Matter Fund, launched in 2019, has been making waves in the startup world by investing in Black and underrepresented founders. The fund, managed by Himalaya Rao-Potlapally, has a focus on sectors such as health, wealth, and economic mobility.
In its second fund, the Black Founders Matter Fund aims to help companies evade centralized corporate power and encourage local ownership. The strategy includes fostering sustainable profitability, promoting business models that support local ownership, and exploring integrated capital fund models that are less extractive.
The lessons learned from the first fund have been invaluable. The portfolio companies from the first fund were all profitable, validating the belief that Black founders can thrive and build profitable companies even with fewer resources compared to other founders.
The second fund is intentionally designed to build on these insights by fostering more profitable, sustainable businesses that empower Black founders to maintain ownership and increase employment in their communities. Rao-Potlapally emphasizes the importance of smoothing out revenue from Q1 to Q4 to allow for hiring more internally.
One of the companies in the Black Founders Matter Fund's portfolio is Saysh, an athletic footwear brand co-founded by Olympian Allyson Felix, her brother Wes Felix, and Darren Breedveld. Another is HUED, a Black woman-owned healthcare technology startup.
The Black Founders Matter Fund also invested in A Kids Company About, a startup that publishes books teaching children about challenging topics such as autism, trauma, and racism. After George Floyd's death, A Kids Company About's book became part of resources people were using to learn about racism in the US.
The Black Founders Matter Fund gained traction in 2020, coinciding with the resurgence of the Black Lives Matter movement. The fund is now planning to expand its focus beyond its initial investment criteria and is considering how it can help companies accelerate sustainable growth.
The Black Founders Matter Fund started raising $10 million for its first fund in 2021 and finished deploying its investments for the first fund in the year 2022. The fund is planning to focus on sustainable profitability for Black founders in its second fund.
In essence, the Black Founders Matter Fund is committed to supporting founders in the broader community and encouraging long-term growth by fostering sustainable, profitable businesses that empower Black founders to maintain ownership and increase employment in their communities.
[1] Source: Black Founders Matter Fund website and press releases.
- The Black Founders Matter Fund, having achieved success in its first fund, is now focusing on its second fund, aiming to help companies evade centralized corporate power and encourage local ownership.
- The second fund will focus on fostering sustainable profitability, promoting business models that support local ownership, and exploring integrated capital fund models that are less extractive.
- One of the companies in the Black Founders Matter Fund's portfolio is Saysh, an athletic footwear brand co-founded by Olympian Allyson Felix, and A Kids Company About, a startup that publishes books teaching children about challenging topics like autism, trauma, and racism.
- Beyond its initial investment criteria, the Black Founders Matter Fund is considering how it can help companies accelerate sustainable growth, as it seeks to expand its focus and make a broader impact in the startup world.
