A few years ago, Kelauni Jasmyn was deflecting questions from friends about deciding to stay in Pittsburgh rather than take a six-figure salary job in Washington, D.C. It was Pittsburgh where she launched Black Tech Nation, which started as a local organization, but is now an online nationwide network for cultivating a “digital Wakanda” for Black tech entrepreneurs. She could have taken the BTN imprint to D.C., where there’s a growing pool of Black talent gathering in places like her alma mater, Howard University, but instead she decided to remain in Pittsburgh, where she believed overlooked and untapped talent was within reach. To supplement her income as a coding instructor for high school students, she tended bar.
Her decision ended up paying off: In March, she announced that she had become an equal partner in the newly formed Black Tech Nation Ventures, a venture capital firm seeking to raise $50 million this year.
Here’s why this is a big deal: African Americans, and Black women in particular, are severely underrepresented in the VC space. According to the National Venture Capital Association’s 2020 human capital survey, only 4% of investment professionals were Black, and African Americans made up just 4% of the overall VC industry workforce last year. When looking at investment partners or their equivalents, only 1% were Black women in 2020. But Jasmyn is among a growing group of Black women — Sherrell Dorsey of The Plug, Monique Woodard of Cake Ventures, and Sydney Sykes of BLCK VC, to name a few — who have been leading efforts nationally to shift the definition of who gets to claim the title “venture capitalist.”
The VC role is crucial in current discussions about racial wealth gaps, economic justice and developing generational wealth opportunities for African Americans. Investing in a successful startup may be one of the quickest ways to multiply wealth. But to get a leg up in the tech startup space, you need significant capital, beyond sources like philanthropic and government grant funding. Attracting venture capitalists and other wealthy investors is imperative in this regard, but if you’re Black, it can be nearly impossible to find someone like this in your reachable network.
This is where BTN Ventures steps in. Their goal is not only to find and fund emerging Black tech talent, but also to recruit and develop other Black professionals into the VC funder space. Jasmyn’s example is instructive here: She doesn’t have a background in capital investment. But she’s been organizing Black tech talent for years, growing the BTN network across state lines, which is how she caught the attention of VC veteran Sean Sebastian, founder of Pittsburgh-based Birchmere Ventures.
“I can remember calling my mom. I was like, ‘Mom, this VC guy wants to talk to me. I don’t know what I’m supposed to say to him,’” says Jasmyn. “I told my whole family, I had never even met a venture capitalist.”
Jasmyn impressed Sebastian enough with her extensive knowledge of the Black tech landscape — and her commitment to improving it — that he connected her with David Motley, another Pittsburgh-based VC vet with a track record of developing Black talent in the investment world through his organization the African American Directors Forum, formed in 2017 to increase Black representation among companies’ boards of directors and executive positions. The work that Jasmyn was doing with BTN seemed like a natural match.
After a couple years with Motley and Sebastian as mentors, Jasmyn finally convinced them last year that it was time to make a Hulk move in the Black tech space. This was in the wake of the global protests last May in response to the police killing of George Floyd in Minneapolis. People in the tech and investment space were going through their own discussions about how their work could be more meaningful in the Black Lives Matter milieu. Motley was convinced that Jasmyn could be the “superpower” they needed to move the needle on this.
“We were talking about the watershed event that 2020 was for a lot of people and we were looking at the situation saying, ‘Well, how can I be relevant in this moment at this time?’” says Motley. “I was blown away by the energy and the passion and the capability that Kelauni brought to this and literally said, ‘Sean, put me on. I want to play.’”
Leveling up this work was going to mean creating a whole new ship, which Sebastian says he knew he would not be able to steer. The conversation since last May had been about reparations and increasing Black power, so their response had to make sense in that equation. The outcome was BTN Ventures, with Jasmyn and Motley as co-captains, and with the eventual goal of having Jasmyn steer it herself. They collectively dropped an initial commitment of $5 million into the company — 10% of their $50 million goal for 2021, which is considerably higher than the 2-3% that partners typically vest in a startup VC fund. They plan to start funding companies once they reach the halfway mark, $25 million, and they are already three quarters of the way there, according to Jasmyn.
This puts Jasmyn and her partners in the ballpark of other Black venture capitalists who’ve recently started new firms: In 2018, Adeyemi Ajao raised $137 million for his Base10 Partners firm, making it the most well-funded VC account led by a Black founder (It has since increased that pot to $250 million). That same year, Sarah Kunst raised $3.5 million to launch Cleo Capital, which at the time was the second-largest debut by a Black woman-led VC, according to The Plug. An analysis by The Plug found that the median investment amount for Black women-led VCs is $3.3 million.
One of BTN Ventures’ goals is to diversify not just the complexion of the VC industry, but also its geography, by pulling the center of gravity from Silicon Valley to other emerging tech centers. Pittsburgh has many advantages as a VC destination: Dozens of major tech companies are based there, and it’s home to Carnegie Mellon University, which has one of the leading computer science departments in the world. BTN Ventures plans for 25-30% of its companies to come from the Pittsburgh region. And it’s not alone: Former Pittsburgh Steelers player Will Allen, an African American, also announced in March that he was co-founding a new VC firm called Magarac Venture Partners, which is also prioritizing diversity and will target startups in the Midwest.
“My gut told me to stay here,” said Jasmyn. “I don’t think I would have been able to do what I’ve done here anywhere else, to be honest.”
BTN Ventures’ success will be determined based on the amount of funding it can spread to emerging Black tech talent, but first and foremost, those talents will have to see what they can raise for themselves. It’s an industry standard that in order to even get a seat with a VC, founders need to collect somewhere between $100,000 to $150,000 in funding on their own, typically through what’s called a “friends and family round” of funding. While it’s true that VCs have a paltry record of investing in Black startups, it is also true that many Black founders are disadvantaged by their lack of proximity to trusted people with that kind of disposable income.
“Black women hold 10% the wealth of white men in America, but we are the most educated demographic, and the fastest growing demographic of entrepreneurs.”
BTN Ventures will operate under the same standards, investing in “more mature” and proven properties, but it will be counting on the BTN network Jasmyn has already established to create pathways for nascent founders to come up with that first round of cash. Black women will particularly be in Jasmyn’s purview.
“Black women hold 10% the wealth of white men in America, but we are the most educated demographic in the country and also the fastest growing demographic of entrepreneurs,” says Jasmyn. “So when you look at that juxtaposition, it’s depressing, but also very telling of where a lot of the energy needs to go, because when the most neglected are supported, then the rest are automatically supported. So to be able to use BTN as a platform to push the success of Black women is for me personally absolutely fulfilling.”
There is a spirited debate happening among established Black VCs about whether it’s appropriate to just build Black VC funds as opposed to demanding that white VCs invest more of their bread in Black companies. In some ways, creating separate “Black” funds only isolates the problem in ways that places the burden on Black funders to solve a problem they didn’t create.
“Black entrepreneurs don’t need a separate water fountain,” said Cake Ventures founder Monique Woodard during a BLCK VC conference last year. “You have to fix the systemic issues in your funds that keep Black founders out and keep you from delivering better returns.”
It’s a point that Sebastian has taken to heart. His Birchmere Ventures company, which currently holds close to $300 million under management, has operated under what he calls an “informal Rooney Rule,” where any time an opening becomes available in one of his portfolio companies they intentionally seek out people of color to interview. He says that a “disproportionate” number of Birchmere’s companies are led by people of color, women or LGBTQ executives. As in some other racial equity programs, like Oakland’s cannabis program, Birchmere is boosting BNT Ventures’ odds of success by lending office space, and sharing access to contacts and resources.
“This is really an effort to kind of raise both sides of the table, to find entrepreneurs deserving of capital that can create wealth for themselves and for their investors, and also for increasing the pool of skilled minority diverse investors,” said Sebastian. “So just sort of getting out of the cycle where everybody in the business looks like me.”
It’s a business model they hope will be replicated across other firms, and in some places it already has. Allen’s Magarac Venture Partners is also operating on the Rooney Rule. As for the rest of the industry, Jasmyn says it is not off the hook despite the rising number of Black-owned and -led VC firms. She wants the companies that made statements about commitments to racial justice after the police killing of George Floyd to follow up with financial commitments.
“You know the black square thing that happened on Instagram last year, where everyone was putting up black squares as a representation of solidarity with the black community? This is [the VC industry’s] black square moment,” says Jasmyn. “We are at the beginning of Black innovation being taken seriously. It’s always been here. It’s just that now the industry is starting to realize the unfortunately untapped market that is Black ideas and Black innovation. Instead of putting it on social media, put it with Black Tech Nation Ventures and let’s build this.”
This content was originally published here.