DURHAM – Resilient Ventures is living up to its name.
Two years after starting a new fund targeting Black-led startups and in the midst of a pandemic, the venture has closed on $3.45 million.
Twenty-four investors, “mostly accredited individual investors from their network,” contributed to the fund.
“It’s definitely been difficult and challenging,” says Keith Daniel, owner of Durham-based Madison Consulting Group.
In the wake of global racial protests and the Black Lives Movement, he said the fund received a temporary boost. But it wasn’t enough for them to reach their original goal: $10 million set before the pandemic hit.
Even so, he’s optimistic: “We feel pretty good.”
Back in late 2018, he and Thomas Droege, president of Droege Computing Services, started Resilient Ventures inspired by the legacy of Durham’s now long-gone “Black Wall Street.”
It is believed to be the only fund in the Durham-Raleigh area that explicitly targets African American founders.
Their mission: to close the existing wealth gap by expanding access to capital, networks and opportunity.
“The pandemic has only further clarified [our mission],” Daniel says. “Despite how hard it is, maybe even harder in some ways for certain companies, this is the time to be doing this work.”
Added Droege: “We want to just get the fundraising period over and focus the next three years on finding these companies and deploying the capital.”
Despite a push over the last decade to increase entrepreneurial diversity, angel companies are still overwhelmingly being led by white male CEOs.
Some reports suggest less than 1 percent of venture capital going to African American entrepreneurs. Others are a little more generous, but still paint a bleak picture.
In 2019, investors totaling 79 angel groups invested over 300 million in more than 850 early-stage companies – but only 6 percent of funds went to founders/CEOs who were African American, according to the Angel Capital Association (ACA).
Deal flow is ‘steady’
So far, the fund has pledged around $680,000 to its eight portfolio companies – half of which are from North Carolina.
Among them: Gryppers, a sports tech startup created by two former North Carolina State University Wolfpack football players
(Raleigh); Beyu Group, a restaurant chain (Durham); CircleIn, an edtech startup (Cary); LiveWell, (Chapel Hill); and Optimal Technology, a hardware-as-a-service startup (RTP/Atlanta).
Outside North Carolina, the portfolio includes Five to Nine, a tech startup (Chicago); MyAvana, a personalized hair care system (Atlanta); and Functional Fluidics, a health tech startup (Detroit) specializing in the standardization of clinical blood function assays.
“Half the companies are already at the $800,000 revenue point and higher. That’s significant,” Droege says.
The goal is to invest in around “10 to 15” companies in total.
Currently, the pair describes deal flow as steady, and has around 50 companies in the pipeline to review.
“I feel pretty confident,” Daniel says. “We we definitely have what appear to be some great opportunities for our investors, and for our firm. Our goal is [to pick] two or three, and maybe a follow on.”
Ultimately, Droege believes access to capital for Black founders is improving, but there’s still “a long way to go.”
“It’s a drop in the bucket. I don’t like to get optimistic about things, until we get further down the road.”