New ‘VC In Residence’ Program Brings Investors Directly To Black And Hispanic Founders
When Felecia Hatcher was seeking capital to grow her gourmet ice cream and popsicle startup Feverish in 2008, she found herself struggling to secure seed funding. The Miami-based entrepreneur noticed many of her peers had an immediate network to rely on for early checks; she and her cofounder (and husband) Derick Pearson did not.
“I joke that our friends and family couldn’t give us a round of funding,” she said. “They could only give us a round of applause.”
Hatcher knew anecdotally that other black and Latinx entrepreneurs were experiencing the same problem landing funding of any kind, while white founders had better luck tapping into their Rolodexes.
Since then, data has backed up her intuition: in 2010, a CB Insights report found only 1% of startup founders were black. There were so few Latinx founders that the analytics company didn’t even include them in the breakdown. (87% were white, and 12% Asian.)
Nothing seems to have improved in the intervening years: a comprehensive 2016 study by Project Diane showed black women receive only 0.2% of all venture funding. When that report was published, only 11 black women had ever raised more than $1 million from VCs.
Hatcher resolved to help bridge this divide in opportunity. In 2013, she founded Code Fever, an initiative to foster STEM in diverse communities. She launched Black Tech Week, a six-day conference for minority entrepreneurs, in 2015; this year’s event will be held in September.
This week, Hatcher kicked off her latest venture in support of black and Latinx entrepreneurs: a first-of-its-kind ‘VC in Residence’ program. Funded with $1.2 million and a three-year commitment from the Knight Foundation, the initiative is a variation on a model commonly seen at universities and accelerators.
This time, it’ll involve a top venture capital investor spending a month in a city with an ecosystem of black and Latinx founders that’s at present underserved by the tech and VC communities. These investors will advise on fundraising, as well as other aspects of startup life that proved elusive to Hatcher and Pearson when she they were starting out.
“We didn’t know what to do next — negotiating, termsheets, lawyers,” she said.
First up: Miami, where the program launched the week commencing April 3rd and the VC in residence is Marlon Nichols, co-founder and managing partner at Cross Culture Ventures and former investment director at Intel Capital.
Hatcher is considering cities like Atlanta, Detroit, Nashville, Charlotte, Tallahassee, and Kansas City for future iterations of the program.
She sees the initiative as an extension of Black Tech Week, which has been such a hit in its first two outings that it has spawned Black Tech Weekend, an abbreviated offshoot.
“We thought, what does that look like?” said Hatcher. “When you can spread that out the rest of the year?”