The late Kobe Bryant, the former NBA MVP, announced the launch of a $100 million venture capital fund in 2016. Although the fund was quietly co-founded in 2013 with Jeff Stibel, news of the launch went public during a ceremonial ringing of the New York Stock Exchange bell.
Shortly after the ceremonial ringing, Bryant and Stibel spoke about the mission and the vision of the fund, during an exclusive interview with CNBC.”We are focused on the convergence of technology, media, and data,” Stibel notes. “We’re looking to go not just for evolutionary shifts, but revolutions. And we’re seeing a revolution right now in these spaces, as they collide together,” he concludes.
Portfolio of Investments
Bryant’s current portfolio of investments includes the sports media website The Players Tribune, which was recently purchased by MinuteMedia. The platform is transformative, because it presents a medium for the direct reflections, thoughts, and experiences of professional athletes.
Other notable investments include video game designer Scopely, legal services company Legal Zoom, a telemarketing-software firm called RingDNA, and a home juicing company called Juicero. Although each of these companies are interesting and game changing in their own right, what is striking is the absence of investment in any black-owned enterprises.
Struggles with Venture Funding
And yet, Bryant isn’t the only venture capitalist who isn’t investing in black-owned enterprises. According to a study conducted by CB Insights, less than one percent of venture capital-backed company founders were African American. Comparatively, 83% were white and 12% were Asian.
“Venture capitalists gain the confidence to gamble on a company’s future when they see the potential for that company to succeed,†Aaron Kaufman writes. “Regrettably, it seems that there is a pervasive, systemic problem throughout the venture capitalist community, where it seems distinctly risk averse when weighing investments in companies founded by women and minorities,†he concludes.
These deeply rooted systemic perceptions in the venture capitalist community are not grounded in reality. In fact, a study published by the Ewing Marion Kauffman Foundation found that minority-owned companies tend to be profitable for investors. The average return was $1.6 million for minority-owned enterprises, compared with an average investment of $562,000 per firm.
Call to Action
Bryant is uniquely positioned to change systemic perceptions and transform how people of color navigate in the venture capitalist community. Considering that 87% of venture capitalists are white and only four percent identify as African American and Latino, his willingness to invest in black-owned firms could propel other venture capitalists to follow suit.
The good news is that there are a variety of black-owned startups that speak to the mission and vision of Bryant’s fund, insofar as they are situated at the nexus of technology, media, and data.
For example, Blavity is a tech startup that is changing media by building the world’s largest digital community for millennials of color. Blavity was founded in 2014 with the goal of enabling millennials of color to tell their own stories. Another example is the Swat App, a data aggregator that promotes safety, accountability, and transparency by enabling users to live stream interactions with the police and file official complaints with a click of a button.
Jared Brown currently coordinates a $25 million initiative at the United Negro College Fund (UNCF) designed to cultivate the next generation of African American innovators and entrepreneurs. He also serves as operations director at Black upStart, an early stage social enterprise that supports entrepreneurs through the ideation and customer validation processes. His commentary on issues related to workforce development, broadly, and black entrepreneurship, specifically, has been published by Black Enterprise, the Center for American Progress, and the Congressional Black Caucus Foundation. Twitter: @LearnedServant.
This article was originally published on August 24, 2016.
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