A Broken Racial World – And The Mistake of Special Venture Funds for Black-Led Startups

There is something unique about being black in America. If you do not do well, that is expected. If you do well, it is possible a special path was made for you. In my first year in Johns Hopkins, a student made a comment implying I could have gotten in via affirmative action or whatever. I responded by informing the person that if I had to come here via any method that was not based on merit, it was because the system was broken, for me. See, I had 800/800 in GRE Quantitative (few get that globally) and my Master’s degree was 4/4 CGPA. The student apologized. I graduated before the student, and after two more years, the student left without graduating! (I was admitted with 3 academic fellowships.)

That brings me to the news that venture funds in the U.S. are opening funds to fund black entrepreneurs. Yes, they need extra help because they could not match the white entrepreneurs. Nonsense! That is the problem in this world – extremely smart people cannot look beyond skin colors. Of course if they give you the money, please take it.

The Opportunity Growth Fund “will only invest in companies led by founders and entrepreneurs of color,” according to an internal memo from SoftBank’s COO Marcelo Claure, who said the fund will initially start with $100 million — meaning there is room for SoftBank or other limited partners to add more over time.

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For the past three days, technology company executives and the investors who backed them have issued statements of support for the protests and the Black Lives Matter movement. Firms like Benchmark,  Sequoia, Bessemer, Eniac Ventures,  Work-Bench  and SaaSTR Fund founder Jason Lemkin  all tweeted in support of the cause and offered to take steps to improve the lack of representation in their industry.

But some Black entrepreneurs and investors are questioning the motivations of these firms, given the weight of evidence that shows inaction in the face of historic inequality in the technology and venture capital industry.

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The efforts announced by large venture capital firms in the last few days should broaden the access that underrepresented founders have to venture capital money and decision-makers and could lead to some checks. But calendar invites and emails will not solve racial injustice. Nor will a dedicated month of talking to Black founders solve the pattern-matching that systemically sits within venture capital.

Yet, that fund will not help America because the challenge goes beyond money. Would you give the black entrepreneur the right contacts? Would you give her the support as you give her white counterparts? Those contacts are even more important than the money. This is how I see it: I write this $80 million to minority founders and with that no one can accuse me that I am not helping. Unfortunately, that mindset will destroy the minority founders as the VCs will put them on a different pedestal which will end up destroying their missions. Yes, they will push the white founders hard, and give the black and latinos a pass! Black and latino founders do not need special highways; they just need to be given opportunities.

What is happening in America is one of the reasons why I think the Obama Presidency failed my expectations. I had hoped his ascent would have killed racism and discrimination. But it was an ephemeral thing that has disappeared just as when Muhammad Ali won the Olympics, rose to the mountaintop, only to be denied a space to eat a burger because he was black. The vanity of his Olympics feat came on him, and he threw away the medal into Ohio River. Yes, the medal which brought fame in the world could not qualify him for a seat in an eatery.

A young Muhammad Ali returned from the Olympic Games a champion in 1960, only to be victimized by bigotry in his segregated home city of Louisville. Disillusioned, he threw his gold medal off the Second Street Bridge and into the Ohio River.

Yet, America will be fine. It will fix this demon. That many of us are here, as immigrants, is a testament that progress is being made. The pace just needs to be ramped up.

Yes, America will be okay despite the current paralysis. The real issue is Nigeria.  My native nation of Nigeria has a village nearly wiped out in Sokoto a few days ago by bandits. The major print press did not cover it; Premium Times remains the hope now. Why? Killing in Nigeria is no more news! That is the class-racism which is growing daily in Nigeria. The lives of the poor are no more lives. If otherwise, governments should be protecting them. While protesting for George Floyd is noble, I challenge us to deal with our demons.

The world is looking for leadership, desperately.

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