Key Insights:
- Black Operator Ventures has closed $13 million in funding led by Northwest Mutual and Bank of America.
- Heather Hiles, Sean Green and James Norman launched the venture firm in 2020.
- The firm will invest exclusively in early-stage companies with at least one Black founder.
Founders Heather Hiles, Sean Green and James Norman know firsthand the challenges of raising capital as a Black founder. Their experiences trying to raise capital, scale their companies, navigate the equity finance industry and profitably exit from companies is what led them to found Black Operator Ventures last year. Now, only a year later, Black Ops closed an initial $13 million in funding towards a first fund to invest in Black-led pre-seed through Series A companies.
“Even when [Black founders] do get access to capital, we’re undercapitalized compared to our white counterparts, this has a compounding effect in the wrong direction,” Heather Hiles, Black Ops managing partner, told The Plug.
“Back in 2012 I learned how incredibly hard it is to be somebody who is Black and raising venture capital, we don’t have the same networks, and familiarity that white men do. I committed to myself that if I were ever in a position where I could decrease the headwinds for other members of my community, for my children and others that I would want to try to correct and close that gap,” Hiles, who uses they/them pronouns, said.
Hiles and their team are chasing Black unicorns, with the ultimate goal of creating the most Black-led companies valued at $1 billion or more. Not only have the partners of Black Ops been in the place of the founders that will make up their portfolio, but they have a sense of where companies are headed and what it takes to get there, which Hiles believes is what sets the firm apart.
“Having been on a board that went public, where I got to be with Udemy from the seat at the table on the audit committee getting prepared for going public and seeing that process through, it allowed me to learn even more about what it takes to get companies to that stage, everything that we’ve learned we will take to our portfolio companies,” they said.
General partners Sean Green, founder of Arternal, a CRM software platform that helps art dealers manage revenue and operations, and James Norman, founder and CEO of Pilotly, a market research firm for creative content, are both still full time at their companies, something they both see as an advantage.
“We are part of this community of Black founders, with better access to deal flow than other venture investors, regardless of their cultural background,” Norman said in a statement. Norman who also leads Transparent Collective, a non-profit that works to get underrepresented founders access to capital and resources, sees Black Ops as yet another vehicle to continue this work.
“Transparent Collective helped Black founders raise more than $50 million in early-stage funding. With Black Ops, we can use our track record of identifying outstanding Black-led companies and bring capital to scale these companies to success,’ Norman said.
The $13 million initial closing was led by Northwestern Mutual and Bank of America.
“It was honestly surprising to us, we didn’t know that in our first fund that we would have this institutional support and investment and that is a game changer for us because automatically we’re building the infrastructure to be invested in by larger institutions, there is a very high rigor around due diligence, around security and operations,” Hiles said. “It gets us into the big league quickly.”
The firm also has venture capital giants Ben Horowitz of Andreessen Horowitz, Precursor Ventures’ Charles Hudson, Joanne Wilson’s Gotham Gal and Kate Shillo Beardsley (Hannah Grey) on its advisory board.
Where Black Ops is the lead investor, Hiles said the firm will aim to make $1 million to $1.25 million investments. Beyond providing capital, the firm plans to help portfolio companies across industries with capacity building, hands on support and operations.
“We’re all Black operators, that makes us unique, that we’re 100 percent, unabashedly here for Black founded companies and that we’re all Black founders who have the operational chops, and DNA to roll our sleeves up and help these founders win,” Hiles said.
