As many know, few venture dollars are distributed in the black community. Well, these three black millennials want to change that.
Odunayo Eweniyi and Jasmine Shells, both black female founders who’ve raised over $1 million in venture funding, teamed up with Philip Michael, CEO of NYEG, a real estate and investment firm, to create VentureLAB, LLC with the goal to invest in over 1,000 diverse founders’ businesses.
Shells is the founder and CEO of Five To Nine, an HR tech startup. Eweniyi, is the founder of PiggyBank, a startup that has raised $1.1M. She is also the co-founder of WealthLAB, a financial resource for people of color. Black Enterprise caught up with the team to find out why this initiative is so important to them and how they plan to execute the feat.
Black Enterprise: Why do you think it’s important to invest in millennials of color?
Eweniyi: Millennials represent two extremes of society. One is that some millennials stand to benefit from one of the largest generational transfers of wealth in history. The flip side of that is that millennials have been handed—possibly—the worst economic situation in recent history.
So more than any other generation, it is acutely important and urgent that millennials start to learn to turn things around—and that includes taking control of the investment process. It’s imperative for the millennial generation to understand that compounding interest can make a world of difference if you start investing in your 20s rather than late 30s or 40s.
Why do you have such a heavy focus on funding women-owned businesses?
Shells: Couple of reasons. It’s the right thing to do and it’s good business. We want to fund amazing companies and a lot of those companies are led by women. According to McKinsey, diverse teams are 33% more likely to turn a profit. Yet, diverse startups account for under 10% of venture capital.
Because we are a diverse VC and founders ourselves, we understand the value that comes from varying perspectives and mindsets. Our goal is to continue to create opportunity alongside others in the space who are looking to create a tech ecosystem that is reflective of our society today.
Perfect example, as of last year, only 26 black female founders had ever raised over $1 million for their startups. We have two on VentureLAB. And we want to help create more.
What do you feel is the best way to build generational wealth in the black community?
Michael: I’ll answer that one. Startups are riskier, which is why it has to come from the institutional level, such as from us. To me, real estate is by far the best, most secure and time-tested wealth-building vehicle.
It’s a tremendously overlooked asset class, especially among minorities. At the current pace, black and Latino wealth will drop to zero in the next 50 years. And real estate ownership—or the lack of real estate ownership—is the biggest driver behind that.
It’s not like the dollars aren’t there. There’s $1.2 trillion in spending power, yet only $11K in black wealth. It’s just a matter of re-allocating the cash versus spending it.
Why they feel “labels” are damaging and being a minority or woman is actually an advantage?
Eweniyi: We’re in the golden age of inclusivity! Social media is helping to shine a light on the injustices that minority groups have suffered for a long time. So I wouldn’t call it an advantage, but it is harder now to be dismissed or not taken seriously without cause as a woman (or a minority) in business.
There are programs targeted at getting more of us into spaces we previously couldn’t get into, and opportunities created specifically targeting our demographic. So again, I wouldn’t call them advantages, but it is nice to finally get recognized for doing great work.
NOTE: Philip Michael is a current Black Enterprise contributor.