HBCUvc: Increasing Access to Capital For Minority Entrepreneurs By Creating More Minority Investors

We're closing the racial wealth gap in communities of color by teaching black and Latinx college students how to invest in entrepreneurship.

Photo of Hadiyah Mujhid
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Eligibility

  • I am not an employee of BNY Mellon, or an immediate family member of a BNY Mellon employee
  • I am over 18 years of age
  • My organization is incorporated as a non-profit, for-profit, or hybrid organization, or I have a partner that is incorporated and could accept funds on my behalf
  • I have already piloted my initiative and have some initial evidence of impact
  • My organization is headquartered and creating impact in the United States

Gender

  • Woman

Where are you making a difference?

Texas: Houston Metro Area (77446)
Tennessee: Nashville (37208)
Florida: Tallahassee (32307)

Focus Areas (required)

  • Business & Social Enterprise
  • Development & Prosperity

Date Started

4/1/2017

Organization Type

  • nonprofit/NGO/citizen sector

Project Stage: Select the description below that best applies to your approach.

  • Start-Up (first few activities have happened)

Budget

  • $500k - $1m

Website or social media URL(s) (optional)

http://www.hbcu.vc/

Twitter URL

https://twitter.com/hbcuvc

Facebook URL

https://www.facebook.com/hbcuvc/

1.Founding Story: Share a story about the "Aha!" moment that led the founder(s) to get started or the story of how you saw the potential for this to succeed.

I moved to San Francisco in 2010 for a software engineering job. It was the first time I witnessed "super wealth" up close and personal. It didn’t take long to see that both the technology and venture capital industries were creating an abundance of wealth in San Francisco and Silicon Valley. It was also clear that those benefiting from these industries were white men; while people of color remain underrepresented. My biggest motivations for creating HBCUvc had been my shared experience with other people of color raised in lower socio-economic communities. I want to create wealth-building opportunities, using my professional experience in technology, for those who have been historically and traditionally excluded.

2. The Problem: What problem are you helping to solve?

We are helping to solve the racial wealth gap by leveraging the wealth-creating industries of technology entrepreneurship and venture capital. This country's history of systematic racism and unfair practices of discrimination have created a wealth divide between races; where communities of color are more likely to be affected by poverty. There is a negative impact on the entirety of the American economy if these disparities are not solved.

3. Your Solution: How are you planning to solve this problem? Share your specific approach.

We train black and Latinx students to support and fund entrepreneurs in their community through a two-year venture capital fellowship. We select students who attend minority-serving institutions such as historically black colleges and universities (HBCUs) and Hispanic serving institutions (HSIs) to participate in the fellowship program. The fellowship provides a blend of classroom training and investing experience through our fund and investment partners. Fellows also amplify our impact by hosting entrepreneurial education events on campuses to support underserved entrepreneurs and identifying entrepreneurs for investment as part of the fellowship. Students who complete the fellowship have the experience and network to jumpstart a career in venture capital where they continue to support underserved entrepreneurs.

4. Example: Please walk us through a specific example of how your solution is working to solve the problem.

We piloted our fellowship during the 2017 - 2018 academic year at three HBCUs. During our pilot year, fellows hosted entrepreneur education events on campus. An example event organized by our fellows included a startup financing training event titled, "Understanding the deals behind 'Shark Tank.'" Our student-led events were attended by 250 minority entrepreneurs in our pilot year. An entrepreneur in Texas received his first VC investment to expand his business after attending one of the student-led events. For people of color, access to capital is a barrier to entrepreneurship, and thus a limiting factor in creating wealth in these communities. For these communities, we are making a difference by facilitating access to capital and ultimately aiding in the creation of wealth and job opportunities.

5a. Too many people in the U.S. have unmet needs for financial products and services. How is your work reaching a population(s) that is currently underserved? If it is not reaching an underserved population yet, how might it in the near future?

Through our program, we empower our fellows to serve as investors in their community and bring access to capital for minority-owned businesses. Lack of capital is the biggest barrier to entry for black and Latinx entrepreneurs. Our fellowship program meets the unmet needs of entrepreneurs of color who are ready for investment but have traditionally and historically been overlooked due to both racial and geographical disparities present in the venture capital industry.

5b. Please specify if the population you are reaching is underserved due to any of the following characteristics:

  • geography
  • race/ethnicity
  • socio-economic class

6. Marketplace: Who else is addressing the same problem? How does the proposed project differ from these approaches?

Organizations such as CODE2040 and Toigo Fellows are working to bridge the racial wealth gap by building a diverse pipeline of talent in tech and finance, respectively. Our approach to the problem differs in that it focuses on creating black and Latinx venture capitalists to invest in minority entrepreneurs. Other programs, such as Dorm Room Fund and Rough Draft Ventures are also similar in working with university students to expose them to venture capital, but lacks a social impact mission and has an underrepresentation of black and Latinx program participants.

7. Impact: How has your project made a difference so far?

HBCUvc hosted its pilot venture capital fellowship during the 2017 - 2018 academic year. During the pilot, students hosted entrepreneurship education events on their campuses and reached roughly 250 students. Also, two of our eight fellows have already landed venture roles - an incredible accomplishment, as it is rare students are hired into these roles from undergrad. Our other fellows have landed roles in venture adjacent industries, such as finance and consulting firms, but have had their professional experience enhanced by participating in the program. We've also have been successful in helping an entrepreneur in Texas connect with his first institutional investor. We are looking forward to implementing many of the lessons we've learned during our pilot year to increase our impact in our subsequent years.

8a. Spread Strategies: Moving forward, what are the main strategies for scaling your impact?

Within the next year, we are scaling to include Hispanic serving institutions, in addition to the historically black colleges and universities we serve now. Also, we are raising a fund to invest in minority entrepreneurs selected by our fellows. The networking, mentorship, and visibility received by winning the Unlocking Change Challenge will aide in the raising of the fund and scaling of impact.

8b. If applicable, which of the following scaling strategies have you launched?

  • Organizational Growth
  • Organizing Conferences
  • Trainings, Consultation

9. Financial Sustainability Plan: What is this solution’s plan to ensure financial sustainability?

Currently, our organization is supported by grants, donations, and event sponsorships. We are establishing a venture capital fund, where future financial returns from investments would be used by the organization to support the fellowship program and operations. We estimate that it may take five years or longer to generate substantial returns from the fund to sustain the organization. In the meantime, we are focused on increasing revenue through event and corporate sponsorships.

10. Team: What is the current composition of your team (types of roles, qualifications, full-time vs. part-time, board members, etc.), and how do you plan to evolve the team’s composition as the project grows?

Hadiyah Mujhid is the Founder and CEO of HBCUvc. She has worked in the technology industry for fifteen years as a software engineer, launched a startup, and a non-profit to support entrepreneurs of color. Jorge Torres joins HBCUvc with a background in venture capital and law practice. As a venture partner at Silas Capital, he provided capital to entrepreneurs starting and scaling high-growth branded consumer business.

Help Us Support Diversity! Part 1 - Which of the following categories do you identify with? (optional)

  • Black or African American (for example: African American, Jamaican, Haitian, Nigerian, Ethiopian, Somalian, etc)

Help Us Support Diversity! Part 2 - Do you identify as part of any of the following underrepresented communities? (optional)

  • Communities of color

How did you hear about this challenge?

  • Other

If you replied "Other" in the question above, please specify. (optional)

Contacted by Isabela Carvalho

Organization name

HBCUvc

Program Design Clarity

Our organization runs a two-year venture capital fellowship for students attending HBCUs and HSIs. The fellowship program is a blended model of classroom training and direct investing experience. Year one involves classroom training where fellows learn the investment fundamentals of venture capital. Fellows participate in a monthly online 2-hour module. They also meet in-person once per semester for training. Professional venture capitalists serve as guest faculty during the trainings. Year two allows the fellows to apply their year one learnings and make investments through the venture fund.

Approach to financial wellbeing: does your project focus on creating financial wellbeing through innovating on any of the following?

  • entrepreneurship
  • investments

Innovation type: Please select which of the following types of innovation best characterize your work

  • Process innovation (execution of a new or considerably improved production or delivery method)
  • Institutional innovation (Creation or changes in organizational structures, the setting up of new types of financial intermediaries, or to changes in the legal and supervisory framework)

Partnerships in detail: tell us about your partnerships that enhance your approach.

The Kauffman Foundation and Surdna Foundation are foundation partners that provided financial support. In our pilot year, we partnered with Kapor Capital, Cross Culture Ventures, and Indie.vc as program partners. Our program partners provided externships for our fellows so that they could obtain venture capital experience. We also partnered with 20 professional venture capitalists who served as mentors for our fellows. We also have university partners who helped with the recruitment of students.

If you won the Unlocking ₵hange Challenge, how would you invest the prize money of $50,000?

If we won the Unlocking Change Challenge, we would use the money to support second-year fellows in the venture fund. Second-year fellows identify qualified entrepreneurs from within their community and make investments from the fund under the supervision of our managing director, an experienced VC.

Awards & Recognitions: What awards or recognitions has the project received?

We are a Kauffman Inclusion Open awardee. In addition, our work has been recognized and featured in publications such as Forbes, TechCrunch, and Black Enterprise. http://www.hbcu.vc/press-coverage.html

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Photo of Kristina Lersbuasin

I like that you are working towards a model that's financially sustainable. Great mission and much needed as well!

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