July 21, 2022

This Black Venture Capitalist Shares Tips For Startups To Survive The Downturn

As the financial downturn continues to daunt the world and we slowly move towards another recession, venture capital funding has dropped significantly, ultimately affecting the progression of early startup businesses. Entrepreneur McKeever “Mac” Conwell shares his tips on how startup businesses can survive, grow, and expand during these turbulent times.

Black-owned VC firm, RareBreed, founded in 2021 by McKeever “Mac” Conwell, is a pre-seed fund that invests in early pre-seed tech companies. It also allows angel investors to become limited partners for more significant funds. So not only does it provide financial opportunities to founders who traditional VC companies may overlook, but it has also helped to kickstart over 30 businesses in the tech sector. 

Prior to the launch of RareBreed, Conwell worked as a state-backed funder at Maryland’s Technology Development Corp. According to Baltimore Business Journal, the entrepreneur was inspired to start his own investment space after seeing underrepresented founders being overlooked by traditional VCs. Since then, he has assembled a team of six volunteers at RareBreed to help founders get their venture ideas off the ground.

Think of new ways to raise capital

The founder of RareBreed, Conwell, believes the financial downturn will significantly change the funding mechanisms that most early startups use. As a result, the platform has encouraged all 39 portfolio businesses to think outside the box when raising their capital, allowing extended periods between each funding round. 

“When you raise capital, you want to have enough for 18 to 24 months of operations,” said Conwell. “Start thinking that way again.” 

“I’d rather you have a strong inside presence who can go out there and get you good clientele, good customers, and good sales without spending a bunch of money trying to buy advertising,” he added. 

Find new ways of gaining profit

Conwell encourages founders to establish new ways of gaining profitability as it will become more difficult for start-ups to rely on VC money for growth. The biggest key to achieving this will be building a team you can trust to handle sales without relying on external advertising. While it typically takes two to three years for a start-up to make profits, it’s essential to establish new ways of gaining profitability from the get-go. 

Conwell is confident the market will rise again, and companies will be able to survive and reap great rewards. 

“There will always be an opportunity for new entrepreneurs who have a new perspective on the world,” Conwell said. 

Kumba Kpakima

Kumba Kpakima is a reporter at POCIT. A documentary about the knife crime epidemic in the UK got her a nomination for the UK's #30toWatch Young Journalists of the Year.