VC Fund Aims to Inspire HBCU Students to Become Next Generation of Investors

On Wednesday, in an auditorium on Clark Atlanta University’s campus that typically hosts jazz concerts and plays, students were instead pitching their businesses and getting advice from venture capitalists and CEOs.

The sessions were part of VC Week, a seven-day event hosted by Fearless Fund, an Atlanta-based venture firm that invests in women of color.

“This is about inspiring the next generation of investors,” Arian Simone, general partner and co-founder of the Fearless Fund, told The Plug.

While Monday and Tuesday were devoted to kids and teens, Wednesday was all about students at historically Black colleges and universities. There were sessions about financial planning, equity, acquisitions, IPOs and how to pitch their businesses. Participants also got to hear advice from renowned fashion designer and businessman Steve Madden.

Two $5,000 scholarships were also given, one to Kadeisha Davis, a Howard University student studying international business, and the other to Kwaku Baffo-Gyan, a Clark Atlanta political science student.

“To have all these people supporting me, it was a special feeling,” Baffo-Gyan told The Plug upon accepting the scholarship.

My HBCU Matters, an online retail store that also provides scholarships to HBCU students,  received $10,000 in a pitch competition that closed out the day.

Venture capital and HBCUs

Fearless Fund’s Arian Simone is a proud graduate of Florida A&M University, an HBCU where as a student she worked to raise capital for her mall-based retail store. During that time, she promised herself she would one day be the business investor that she was looking for.

Since 2019, she has been fulfilling that promise. Fearless Fund has now raised more than $25 million, according to Simone. The firm invests in early stage women of color-led companies that are in the food and beverage or beauty and technology industries. The average investment is between $250,000 and $500,000 and they target five to 10 percent equity.

The fund operates in a space where Black people, especially Black women, are vastly underrepresented. Only three percent of investment partners at VCs are Black,according to the 2021 VC Human Capital Survey.

Between 2009 and 2017, only 0.0006 percent of VC funding went to businesses started by Black women, according to Project Diane.

HBCUs have played a key part in developing Black women founders. Howard University has produced more Black-women led startups than Harvard or Stanford, Project Diane also found.

Fearless Fund’s HBCU sessions come as venture capital has recently had a renewed focus on HBCUs. Just this month, a new VC fund, HBCU Impact Capital launched with the goal of helping develop innovation and research coming from HBCUs by investing in businesses started by alums and people in the HBCU ecosystem.

Base10 Partners announced in May it had raised a $250 million fund and would donate half the fund’s carried interest to HBCUs to support their endowments. Another firm, Lowercarbon Capital, has offered HBCUs some fund allocations on a no-fee/no-carry basis.

In June, three multibillion-dollar asset management firms announced a joint 10-year, $90 million initiative at Clark Atlanta University, Howard University, Morehouse College and Spelman College to open more pathways for students to pursue jobs in private equity.

Simone sees HBCU students as an important part of diversifying venture capital.

“This mission wasn’t about getting [white male investors] to invest in people of color, though I think they should. It was about creating more Black and brown check cutters in order to invest in more Black and brown people,” Simone said.

“And if I can start with them now at an HBCU level and create more Black check cutters, then I know that we will have more dollars deployed to Black people.”

Mirtha Donastorg

Mirtha Donastorg is a corps member with Report for America and The Plug's HBCU Innovation Editor and Senior Reporter, exploring start-up initiatives and innovations coming from Historically Black Colleges and Universities, as well as the way students are shaping the future of tech. She previously worked as an associate producer and a researcher for CNN.