Black Founders Matter Is Focusing On Long-Term Sustainability As It Eyes Second Fund
The Black Founders Matter Fund is eyeing a second fund after fully deploying capital from its first. Launched in 2019, the early-stage fund invests in Black and other underrepresented founders building solutions in sectors such as health, wealth, and economic mobility.
Managing Director Himalaya Rao-Potlapally says the experience has offered critical insights, not just for the fund’s strategy, but for how the venture ecosystem can better serve founders long term.
Investing in Black startups
Black Founders Matter began to gain traction in 2020, coinciding with the resurgence of the Black Lives Matter movement, Rao-Potlapally told AFROTECH. At the time, it has invested in A Kids Company About, founded by Jelani Memory, which publishes books teaching children about challenging topics such as autism, trauma, and racism.
After George Floyd’s death, the book became part of the resources people were using to learn about racism in the US. Rao-Potlapally said, “So that actually started to catalyze movement into the fund because people saw that we could pick really great companies that were having an impact, but also had an economical gain. And so that actually is what catalyzed our fundraise in 2020 into the main fund.”
Black Founders Matter started raising $10 million for its first fund in 2021 and finished deploying its investments this year. Its portfolio includes HUED, a Black woman-owned healthcare technology startup and athletic footwear brand Saysh, co-founded by Olympian Allyson Felix, her brother Wes Felix, and Darren Breedveld.
Learning from its first fund
As Rao-Potlapally reflects on the past, she highlights that all the portfolio companies from Fund I were profitable. More importantly, she realised that Black founders can succeed with limited resources.
The Black Founders Matter Fund plans to focus on this idea through a second fund, while also supporting founders in the broader community and the long term. This also includes examining how it can help companies accelerate sustainable growth, which can help evade centralized corporate power and encourage local ownership.
“I think the base of what we found is in order to create the most optionality for Black founders, we need to be able to work on sustainable profitability, smoothing out the revenue from Q1 to Q4 so that there’s an ability for and capacity to hire more internally,” she says.
Image: Business Wire
