The usual outline where notable investors fly in, show up for their mic checks before their sessions, give their sessions, and then depart didn’t apply during last week’s Black Wall Street Homecoming
Investors from Impact America Fund, Cross Culture VC, Square 1 Bank, Magic Johnson Enterprises, Silverpea Ventures, Backstage Capital and Creative Allies, flew in early and stayed present and available throughout the week to provide formal and informal guidance to founders at all stages along their entrepreneurial journey during Black Wall Street Homecoming and the Google for Entrepreneurs Exchange Black Founders.
Though many conferences and events claim to bring investors to the region, many events don’t quite hit the mark. Beyond paying lip service to a theme of “connecting entrepreneurs and investors,” last week’s Black Wall Street Homecoming celebrated the many formal and informal opportunities for dialog between investors and founders about how to best grow their business and build relationships.
Black Wall Street Homecoming’s mission to connect attendees rang true in the hubbub of conversations between events.
It was rare to be at a session that didn’t include Stefanie Thomas, senior associate at Impact America Fund, Ryan Smith, investment director at Magic Johnson Enterprises, or Marlon Nichols, general partner at Cross Culture Ventures, each of whom were in town for all three days spanning the event, as either a speaker, judge, or audience member. These investors engaged during breaks, visited some of Durham’s favorite after-work locales, and joined the audience for other sessions throughout the week.
Getting the Money
Only 6 percent of companies secure venture capital, regardless of founding team makeup. According to Thomas, many companies participating in Black Wall Street’s Homecoming this past week were far too early stage for venture firm’s Impact America Fund to consider an investment in the near future, yet Thomas and her colleagues invested in nearly a full week of conversations to coach founders and provide advice to those in their early stages.
During a Q&A session on Friday, one attendee asked how he might work on his soft skills in order to better network and connect with investors at funds like Impact America.
“It is just as important for entrepreneurs to collect information on building their business as it is for entrepreneurs to collect information on how to fund their business,” says Thomas. And the key to that second part of the equation, says Thomas, is relationships.
To have success in this aspect of the business, says Thomas, it’s imperative the entrepreneurs understand that it’s not enough to research potential funding sources. If entrepreneurs are to find trusted, respected, and committed partners that invest in the growth of their business, they must begin early to establish relationships with them, and with their networks that might advocate for you or help you get a formal meeting, says Nichols.
Think about it, says Thomas, “as you grow your company, the amount of responsibility increases.”
Having a well-established support network makes this growth easier. Despite what news reports and Hollywood movies may depict, says Thomas, no entrepreneur is successful solely on their own. When you’re building these relationships, says Thomas, it’s imperative that you demonstrate that you are coachable, and that you’re committed to the company and to learning how to grow, improve, and scale.
After hearing background on his company, a two-year old software company that provides services to government contractors and was profitable after its first year, Thomas advised the entrepreneur to consider not seeking venture capital.
Venture capital isn’t the best option for everyone, says Nichols. To seek venture funding, an entrepreneur has to master selling, says Nichols. Sell your vision, sell your plan, sell your approach, and to sell yourself and your story.
That transaction doesn’t happen overnight, says Thomas. “We like to spend a great deal of time getting to know entrepreneurs and their businesses.” Investors don’t need to know every minute detail about the business, the entrepreneur, and the team, says Thomas, nor do entrepreneurs need to have their financials in perfect order, but they must be able to demonstrate that there are viable options to add and deliver value.
It’s not personal, says Thomas. In fact, entrepreneurs and investors alike would be wise to remember that in a partnership, “we must take out our personal feelings and understand that everyone is taking an approach that, to them, seems in the best long-term interests of the company,” she says.
By investing their time in building relationships here in Durham, the investors who came to town for Black Wall Street Homecoming may have delivered just what the event organizers hoped: a step toward closing the well-documented funding gap between founders of color and their white counterparts.