Durham’s Black Wall Street may be long gone, but a team of local angel investors is working on a comeback of sorts.
Meet Resilient Ventures, a new fund “inspired by [its] legacy,” specifically targeting African American-led startups from around the country.
This month, two years after its launch and in the midst of a pandemic, the fund 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 Matter Movement, the fund received a bump. But it wasn’t enough for them to reach their original goal of $10 million set before the pandemic hit.
Even so, Daniel is optimistic. “We feel pretty good,” he added.
Durham’s Black Wall Street
Back in the early 1900s, Black-owned businesses once lined Parrish Street in Durham’s downtown, forming a hub of black wealth and political power in the heart of the city. But with the construction of the Durham Freeway and urban renewal, those shops were pushed out, along with its once vibrant black business community.
These days, Black founders often face disproportionate struggles getting their businesses off the ground — with less than 1% of venture capital going to African American entrepreneurs.
So in late 2018, Daniel and Thomas Droege, president of Droege Computing Services, started Resilient Ventures.
Their mission: to close the existing wealth gap by expanding access to capital, networks, and opportunity.
It is believed to be the only fund in the Durham-Raleigh area that explicitly targets African American founders.
“We knew there needed to be a voice at the table and more focus on African American founders,” Daniel says. “The pandemic has only further clarified [our mission].”
“We want to just get the fundraising period over,” added Droege, “and focus the next three years on finding these companies and deploying the capital.”
Deal flow is ‘steady’
So far, the fund has pledged around $680,000 to its eight portfolio companies, more than half of which are from the Southeast.
Four come from North Carolina. 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); and LiveWell, (Chapel Hill).
Two are from Atlanta: Optimal Technology, a hardware-as-a-service startup, and MyAvana, a personalized hair care system.
The remainder of the portfolio includes Five to Nine, a tech startup out of Chicago; and Functional Fluidics, a Detriot health tech startup 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 fund is actively recruiting new companies, and has around has 50 companies in the pipeline to review. The goal is to invest in “10 to 15” companies in total.
“I feel pretty confident,” Daniel says. “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.”
A national movement?
What’s happening with Resilient Ventures can be seen as part of a national trend.
In recent years, a growing group of Black angel investors and Black-led early-stage Venture Capital (VC) funds have been working to address the funding gap by seeking out minority-led companies.
Among the most visible firms are New York-based Harlem Capital Partners, California-based Backstage, and Black Angel Tech Fund.
Ultimately, Droege believes access to capital for Black founders is improving. But there’s still “a long way to go.”
“I don’t like to get optimistic about anything until we get further down the road.”
Of Resilient Venture’s efforts, he’s similarly realistic: “It’s a drop in the bucket.”
Featured photo: Keith Daniel (left) and Thomas Droege (right) of Resilient Ventures