Black Gen Z VCs are here and swinging for the fences

One day early in the pandemic, Dazayah Walker came across a job she’d never heard of before: venture capitalist investor.

The pandemic ensured she had time, and intrigued by the profession, she started teaching herself the trade. She soon realized it was a way to build wealth, and as a young Black woman, it was also a viable career path to which she was never exposed.

“This is one of those quietly kept industries where people have been becoming multimillionaires for years,” Walker told TechCrunch. “We just have not been included in that.”

That’s starting to change. Although the investor landscape remains mostly white and male, there has been an uptick in Black VCs striving to fund overlooked founders while simply pursuing a career once obscured from them. This new crop of VCs are starting younger than ever — and like Walker, they’ve set their sights high.

Walker studied economics at Spelman College and worked as an executive assistant at record label Quality Control. Two months after discovering venture capital, she pitched to start the label’s first VC fund. Today, at 24, she runs the label’s entire investment portfolio.

“There is a consistent need for fresh perspectives, new forms of creativity and innovation, and this is done through diversity and inclusion,” Walker said. “It’s an opportunity for [us] to be in a space to have an impact and inspire.”

Another way of looking at the world

Walker initially was worried that her lack of a Stanford degree or Bay Area expertise would hinder her progress, but the perspectives and ideas she brought to the table have helped her establish herself.

A black woman in a suit smiles to the camera

Quality Control VC, Dazayah Walker. Image Credits: Dazayah Walker

Atlanta, where Quality Control is based, is an emerging tech hub, and the label is one of the nation’s most popular. Walker says her young perspective is valued as the spending power of Gen Z grows.

She has leveraged the cultural relevance of Quality Control and its artists to build her network, knowing that founders and investors are always looking to associate themselves with whatever’s considered “cool.”

To date, Walker has helped the label execute eight deals, many focused on consumer apps and fintech, and spends time educating her favorite artists about investing. She once wanted to become a music executive but has shed those aspirations for a focus on opening economic opportunities for others who, like her, didn’t know this avenue to prosperity existed.

“There’s so much overlap in the intersection between music and technology,” Walker said. “I see the opportunity for this to be bigger than the now, but as a way to build generational wealth and define a legacy.”

Over in Los Angeles, Jonathan Moore, 22, left his Wall Street career to work as an analyst at TCG Capital Management. He pitched the idea for the firm to launch a crypto fund, believing the intersection of web3 and the creator economy could tap a generation of untapped talent. Since launching the fund in September 2021, he has closed over 20 deals and says the outlook for this year is equally promising.

Emory University student venture fund is raising a new generation of investors

Last year, a small group of Emory University graduate students at Goizueta Business School in Georgia began to examine the challenge of getting Black and other historically underrepresented founders access to capital. One way to do that, they reckoned, was to raise a generation of investors who would pay more attention to these groups.

The idea grew into an investment fund called Peachtree Minority Venture Fund, with the goal of teaching students about venture capital while investing in real companies with minority founders. The fund just completed its first group of investments as the idea came to life in the classroom.

Humza Mirza and four other student managing partners — Alexia Brown, Jack Semrau, Dylan Cowley and Miguel Vergara (pictured above) — worked with the inaugural class around the fund’s initial investments while learning about being a venture capitalist.

“We are a fully functioning fund. We have a cohort of 24 students who are doing due diligence on our investment pipeline. And we’re just keeping this kind of ball rolling and growing,” Mirza said.

These lessons and activities resulted in three initial companies receiving funding from this year’s group. Among the first investments from the fund were $25,000 for CommunityX, an app for organizing around particular causes, including creating calls to action, events and petitions.

The firm gave an additional $15,000 each to Ecotone Renewables, a startup producing liquid plant fertilizer from food waste, and FundStory, which provides a platform for accessing and managing non-dilutive capital.

All three startups meet the fund’s criteria of having a diverse founding team with a good idea struggling to find capital.

A student in the program, Bonnie E. Schipper, said she observed a steeper path for underrepresented founders and recognized how the fund was trying to address that.

“Our team made it a priority to look past a lack of funding history or fancy top-tier degree to really assess founders’ experience, passion, knowledge and value proposition to ensure we were putting forth the best investment opportunities rather than falling prey to historical practices that provide unfair advantages to more privileged populations,” she said.

Another student, Ardalan Javadi, said he was drawn to this program because he wants to pursue a career in early-stage venture capital. “My team focuses on the business and financial services; we went through all the pre-screening, sourcing and due diligence of the investment opportunities with minority startup founders,” he said.

“We sourced more than 55 startups and recommended one startup to the investment committee. I think this is unique about the Peachtree Minority Venture Fund. You have the opportunity to learn sincerely all aspects of the venture fund that focus on the minority founders and make a real impact by investing in that opportunity.”

While the students are running the fund, it’s up to the professors in charge of the classroom component to prepare them and help them understand what goes into investing in companies.

Professor Robert Kazanjian, who is teaching the classroom component this semester, said there is a strong focus on understanding the nature of investing in historically underrepresented groups, as well as addressing the challenges they face in raising money.

For starters, he said that people from the fund’s target groups often don’t have access to capital from family and friends, which he explained is “due to decades of economic structural inequality, the structure of VC networks (which are largely male and white), as well as a range of implicit biases observable in VC investing due to a range of psychological factors.”

“We explicitly discuss in class that this is changing and that many VC firms are working diligently to address these imbalances, but the underfunding has proved persistent,” he said.

In addition, he said that he teaches a deep understanding of the full range of activities required by VC professionals, such as deal sourcing, due diligence, legal considerations, and direct data collection from the ventures, including interviews with founders.

The project was the idea of four students who launched it but graduated before it welcomed its first class. Willie Sullivan, one of those original students, told TechCrunch last year that they wanted to solve an entrenched problem around investing in Black-owned businesses.

“When we conducted interviews, one of the main things that came up, which always comes up, is how large of a problem access to capital is still for Black entrepreneurs. And so we were coming up with our recommendations. It was really, ‘OK, how can we as a university address this issue,’” Sullivan said at the time.

The fund received $1 million from the school’s endowment last year. Mirza was part of the group of first-year students involved with the founding team who took over when the founding group graduated. “Willie and the second years conceptualized the fund. They put together the skeleton, all the documents, all the paperwork, the investment vehicles, while working with the dean to get that million-dollar funding,” Mirza said.

Additionally, the program is designed to keep going each year by preparing a group of incoming managing partners who will take over when the prior group graduates, just as Mirza and his crew took over from Sullivan and theirs.

The course and associated fund aim to raise awareness and solve a real access problem that exists for underrepresented founders while creating a new generation of investors who are being trained to look at people with good ideas who have traditionally been left behind by venture investment.

Emory University is launching student venture fund to invest in underrepresented startups

College is time for learning, and sometimes the best type of learning is hands-on where you come to understand a trade by doing it. Emory University students wanted to learn about venture investing, while figuring out a way to get funds to underrepresented startup founders. They are managing to do both in a new venture capital fund called Peachtree Minority Venture Fund, which will be introduced next spring as part of a class that students who run the fund will be taking.

The idea for the project had its genesis in some research at the Emory University Goizueta Business School. Willie Sullivan and his fellow students Kristen Little, Chis Anen and Alan Quigley were doing research on the experience of underrepresented entrepreneurs in the Atlanta area where the university is located.

“When we conducted interviews, one of the main things that came up, which always comes up, is how large of a problem access to capital is still for Black entrepreneurs. And so we were coming up with our recommendations. It was really ‘okay how can we as a university address this issue,'” Sullivan told me.

Sullivan says that the research team understood that this was an age-old issue, one that there hasn’t been a great answer for. He also knew that students had been running venture funds for a couple of decades at other schools, so he began to explore the idea of starting one at Emory with the goal of finding a way to fund some of these companies while teaching students how to be VCs.

The team concluded that a student-run venture fund was a missing component in Emory’s business education, one that could be a great experiential learning opportunity for students to deal with real money making investments in real companies and conducting all of the due diligence and analysis that they would as a venture capitalist or investor at any company.

But Sullivan said the idea was to do more than that. They also wanted to help close the capital gap they found with their research by funding those startups that typically have a hard time accessing capital, looking not only at Black founders, but also Native American and Latinx founders.

Emory University Peachtree Minority Venture Fund founding team.

Founding team: Kristen Little, Willie Sullivan, Chis Anen, Alan Quigley. Photo Credit: Emory University

“[We decided to] start the first student-run fund where we’re focusing on multiple things. First of all we’ll be making equity investments into these underrepresented minorities, but our goal is also to create multiple classes of investors of all different racial and ethnic backgrounds that have been super engaged with this type of entrepreneur while they were at Goizueta Business School,” he said.

He believes if the school can produce a new generation of investors used to looking at a more diverse group of businesses than the typical venture firms, they can bring these learnings with them when they go out into the world and join these companies.

But before they could form a venture fund, they needed money. Sullivan said he spoke to around a dozen other school venture funds and most of those had been funded by rich alums, an option he said that he didn’t really have. But when he pitched his idea to the Goizueta interim dean, Karen Sedatole, he said that she loved the idea and decided to allocate $1 million from the school’s endowment as seed capital for the fund.

“She’s already really supported a lot of racial equity and racial justice things that we’ve done at the school. And once we laid out all our plans and how we were going to set this up, she basically said, ‘I want to allocate money from our endowment to set this up,'” Sullivan said.

The research and analysis will take place under the supervision of a Goizueta Business School professor as part of a class the student investors will be taking to be a part of this group. The course will teach students about the technical aspects of investing, such as understanding what a cap table is, as well as how to create a financial model. It will also examine the diversity and inclusion side of investing and how to avoid unconscious bias in investment decisions.

The fund is also in the process of setting up an advisory board of Atlanta area groups that includes The Russell Center for Innovation, Atlanta Tech Village and Venture Atlanta. And while the deal sourcing and final decisions will rest with the students, they will be able to lean on this advisory board whenever they have specific questions where they could benefit from the wisdom of a more experienced investor.

The venture fund will be run by three students who will serve as managing partners and do the bulk of organizing and deal sourcing. These students will also serve as teaching assistants for the professors teaching related coursework, and they will supervise the other students who will have titles like senior associates and analysts, just as you do at other firms. As the managing partners graduate, new managing partners would be selected from the staff from the previous year in order to create a level of continuity in the program.

The firm intends to make a couple of investments in the $20,000-$25,000 range each year, and also set up a micro investment fund with another four or five checks for around $10,000 per year to jump-start some companies with underrepresented owners who might not get the attention of traditional investors or banks.

“The other half of what we’re looking to do is to help those people who are right at the beginning, somebody that has a great idea, maybe they built out their product a little bit, maybe they even have some revenue, but what they really need is [a small check to get them going]…”

The fund is still in the formation stage, but the first course is expected to begin in January with the first investments coming in March. Sullivan and his team has created a database of between 100 and 150 companies as a starting point for the class.

“We’re doing a lot of that [setup] right now, really getting familiar with people who are out there and things like that so that once those students are trained and we can get started, we can just hit the ground running and hopefully make those first investments in March,” he said.