A Future Where Black People, Ideas, Institutions are Valued & Funded.

The Case for HBCUvc

HBCUvc addresses wealth inequality by developing a future generation of Black investors who will spur economic opportunity in Black communities by 1) investing in Black entrepreneurs and 2) re-architecting the venture capital system to be more equitable. Our work supersedes the goal of helping young professionals receive a “good job;” instead, we unlock an investor's mindset, which is based on the entrepreneurial mindset but focuses more on collaboration, community, relationships, and trust, and can pave ways to build regenerative wealth for Black communities.

The venture capital industry employs a relatively small number of professionals each year—in fact, less than 10,000. Still, the industry has an outsized impact on the United States' economic outcomes, managing $200-$300B annually and deciding which early-stage companies receive investments. The decision of who receives funding has a compounding wealth effect on the company's geographical location and among those the company hires. 

As the venture capital industry currently operates, white men control 93% percent of venture capital dollars. As a result, 30% of these dollars go to companies located in the San Francisco Bay area, and 77% go to white founders. In contrast, Black founders receive less than 1%. As a secondary output, these VC-funded founders/companies create a concentrated employment workforce in the San Francisco Bay area, where only 4% of the workforce is Black. These factors exemplify how the current venture capital ecosystem perpetuates the inequality we see because of who exists in it.

The other hidden demographic within venture capital is alma mater, with two universities overrepresented in the industry. Forty percent of all venture capital professionals have attended one of two schools: Stanford or Harvard. And equally aligned, research shows that Stanford and Harvard are the top universities for founders who have raised more than $1M. The reason for this is simple: venture capital operates on close-knit trust networks. In an industry where high bets are made at the earliest stages of a company—often in companies with no or limited track records—VCs look for other signals or patterns to gauge the likely success of a company. These signals may be referrals from within their network or other mainstream (and antiquated) success indicators, such as attending an Ivy League university. 

HBCUvc's work targets students and alumni of historically Black colleges and universities. Since relationships and networks of trust are essential in venture capital, we intentionally leverage one of the most established and extensive Black networks, the HBCU student and alumni network, to have a regenerative wealth impact on the Black community.

In addition, working alongside HBCUs allows us to leverage the mission and work of HBCUs, which historically (and currently still) outperform in providing higher education opportunities for Black communities. Many institutions offer second-chance opportunities for students who are refused admittance to majority universities. The missions of HBCUs account for the barriers traditionally faced by Black communities and create opportunities to serve low-income students, as much as 70% of whom depend on Pell grants to attend college. HBCUs have demonstrated success as social mobility vehicles, and with this in mind, we build on the foundation provided by HBCUs to accelerate our mission while considering the systems impacting Black communities.

In our approach to addressing wealth and inequality, we leverage USAid's 5Rs Framework (results, roles, relationships, rules, and resources) for systematic change and adapt it to change how venture capital operates, aiming for an equitable wealth distribution model. We've identified the relationship component from the 5Rs Framework as the most accessible and that which will significantly impact the desired results.

Through our work, we aim to shift how Black communities with little to no exposure to tech and VC perceive capital. This also includes unraveling conceptions of what a business “should” look like to receive funding. Alternatively, it raises the possibility of how HBCU students and alumni can engineer or support their own ecosystems for founders and investors within their networks. 

Today, HBCUvc’s work has positively shifted the career trajectories of 380 participants, with ripple impacts on the communities they represent. HBCUvc’s alums have gone on to start, lead, and influence venture funds and entrepreneurial-support organizations, resulting in more than $200M distributed to Black entrepreneurs.