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Recruiting the next generation of venture capitalists from historically Black colleges
Jun 28, 2021

Recruiting the next generation of venture capitalists from historically Black colleges

Venture capital is the way the world’s most promising tech companies get funded. But it’s a notoriously white industry.

On a recent morning at Morgan State University in Baltimore, a small group of friends were chatting about their summer jobs.

“I was up until 4 a.m. working on a financial model. They sent off two term sheets last week,” master’s student Ime Essien said, referring to documents that outline a potential business combination. 

I don’t know about you — this was not my summer job experience just after college. But these three — Essien, a remote intern for Silicon Valley-based Redpoint Ventures, and recent Morgan State graduates Kiley Williams and Tobi Plumpter — have already had significant experience in venture capital. 

Plumpter asked Essien what companies he was reviewing, but Essien refused to give up details.

“Well, I cannot. The term sheets are unsigned,” he said.

“And you can’t talk about it,” Plumpter said. “I understand.”

Top-secret stuff.

Essien got his internship through a nonprofit called HBCUvc. Its goal is to develop a new, diverse generation of venture capital leaders. Venture capital has been the way the world’s most promising tech companies get funded, and it’s a notoriously white industry. 

From left: Ime Essien, Kiley Williams and Tobi Plumpter.
From left: Ime Essien, Kiley Williams and Tobi Plumpter. (Amy Scott/Marketplace)

A survey last year by the National Venture Capital Association found that just 4% of U.S. workers in the industry are Black. HBCUvc is trying to change that by connecting VC firms with historically Black colleges and universities, like Morgan State.

“There was just a huge market opportunity to go to HBCUs because that’s where Black talent is, and that’s where Black talent has always, always been, right?” said HBCUvc’s chief operating officer, Chelsea Roberts.

Roberts said that while companies like Google and Goldman Sachs recruit at some HBCUs, venture capital traditionally hasn’t. “VC firms, if they are doing any campus recruiting, are going to Columbia, Penn, Harvard and Stanford, I’d say, which is a big reason why the industry is so insular,” she said.

The group’s flagship program is an academic fellowship. Students learn the foundations of venture capital, such as due diligence: basically making sure a startup can do what it promises to do. 

Kiley Williams calls the fellowship a crash course. “Ten toes in, dunked, into what venture capital really is,” she said. 

Fellows also have access to the group’s $1 million Lab Fund to invest in Black, Latinx or Indigenous founders.

Williams heard lots of pitches, including one from Oyare Oko and Ayo Ajayi, co-founders of UrConvey, an app to help people ride with people they already know. Williams said she did not give UrConvey funding.

“The team wanted to see more traction,” she said. “[We] loved it, but thought it was just a tad bit too early for [them] to get funding. But that was an awesome experience.”

This kind of experience lets fellows develop a track record of investing, which venture firms — and their investors — like to see. Plumpter interned at Motley Fool Ventures. He said the fellowship gave him skills that will be useful no matter what he pursues.

“I have a stock portfolio, I have a crypto[currency] portfolio and a lot of the skills I use from VC are what I use for my personal investment as well,” he said.

After the fellowship, Essien said, he now has a built-in network of support, including Chelsea Roberts and HBCUvc founder Hadiyah Mujhid.

“HBCUvc is a family. We deeply care about each other,” Essien said. “It’s Auntie Hadiyah and Auntie Chelsea. That’s how it is.”  

“Cousin Chelsea. Cousin Chelsea,” Williams chimed in.

Roberts is 27 years old, for what it’s worth.

HBCUvc was founded to create the same kind of network for Black and brown college students that many white students have. Venture capitalists tend to invest in entrepreneurs they know, or who know someone they know, often from the same college they went to.

“The culture of historically Black colleges and universities is so much, so rooted in relationships and networks,” Roberts said. “If we’re understanding venture as an industry being a relationship business, that already exists at HBCUs.”

So far, the program works with 15 of the country’s 102 historically Black schools and plans to expand to more. The fellowship is entering its fifth year, and so far about 20% of its 88 graduates have gone on to work in venture full time. The hope is that expanding the pool of funders will also diversify who gets funded.

HBCUvc isn’t the only group working to change the flow of venture capital, but some are skeptical about how quickly the industry will change.

Jim Gibbs is a Black founder who raised $2.5 million for his parking startup, MeterFeeder. “Do I think they’re going to change? No,” he said. “They’re not going to change until there’s a consistent stream of success stories. That’s when the ‘venture’ are going to venture into the safe bet, like, ‘Hey, I’m going to invest in these Black and brown startups.'”

For those paving the way, it can be daunting. Roberts said part of what HBCUvc does is work with both the fellows and the firms to make sure the experience is good for all involved. 

We ensure that the firm is prepared and ready for hiring, maybe their first Black person that they’re going to hire, and we do things like anti-bias training through some of our work,” she said.

Williams was one of two Black women at her internship with the Baltimore-based firm Squadra Ventures. “We’re on the website. We’re like, ‘Wow, this is a very, very, very, very white company,'” she said. “And at first, it is a little bit, is a little bit nerve-wracking, but it was very clear that they were putting in extra effort to make sure that we’re a part of the team.”

Williams said she had a good experience. But, if venture is going to compete with other industries for talent, it might have to start recruiting a bit earlier.

Williams starts a job at Goldman Sachs next month. 

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