The greatest wealth generating opportunity of our time is modern tech. What the industrial revolution was for the nineteenth and early twentieth centuries, the software revolution is for our new connected age. Like those before them, the founders, early employees, and financial supporters of the next generation of breakout companies will create massive wealth. Yet, consistent with the history of U.S. wealth generation, people of color are participating at rates that do not come close to reflecting our national demographics. This isn’t sustainable.
The current venture funding system grossly underestimates the growing significance of underrepresented founders, operators, consumers, and talent of color. We look at this market inefficiency and see an investment opportunity to generate superior returns by actively mobilizing around this core underserved ecosystem.
That’s why we set out to build a dedicated early-stage investment business to address the racial wealth gap. Over the past 19 months, we have quietly and strategically built Concrete Rose, our venture firm focused on investing in Pre-Seed through Series A opportunities across three areas:
- Underrepresented founders with an emphasis on Black and Latinx,
- Companies forming to meet the needs of underrepresented consumers, and
- Founders authentically committed to building diverse teams and inclusive company cultures — regardless of background.
We want to make an impact, but this is not an impact fund. Our thesis is that investing in founders committed to building diverse and inclusive teams will lead to venture sized returns while cultivating the next generation of Black and Latinx founders and funders.
Creating a flywheel for the long term opportunity
The data tells us that diverse teams perform better. But underrepresented investors and founders of color remain undercapitalized. We’ve all seen the numbers: only 3% of venture backed founders are Black or Latinx. Morgan Stanley estimates that over $4 Trillion is being left on the table by investors who overlook businesses led by underrepresented entrepreneurs. A miniscule amount of resources is dedicated to what we consider the diversity opportunity — about $1Bn is managed by Black/Latinx GPs or invested with a focus on underrepresented founders of color.
This capital gap will take generations to fix, but we are committed long term. Black and Latinx professionals need to participate in multiple “generations” of startups as founders and early employees, and we are here to fund and support those companies.
We are running at this opportunity from all sides. While investing in underrepresented founders is a core focus of ours, the diversity opportunity goes beyond founders.
Talent at all levels needs opportunity. If a new founder hasn’t worked as an early employee at a successful company, they will not have the experience or network to raise institutional money. This broader lack of saturation contributes to investors’ perception of who is “investable”. This is problematic, but it’s an important reality to consider. Worse still, these network effects compound over time.
Our belief is that investing in founders authentically dedicated to building diverse teams while helping them meet and hire underrepresented talent will lead to increased wealth generation for diverse professionals and cultivate a robust group of potential future founders.
We started making our first investments in January 2020.
We are particularly interested in purpose-driven entrepreneurs working on financial inclusion, productivity software and virtual work, AI/automation, reskilling/mobilization of the unemployed, health and wellness, and access to education. If you are working on an idea in these areas, please reach out!
Our portfolio companies range across these themes we’ve developed: EdConnective, Paladin, Rheaply, FiveToNine — and three other commitments not yet publicly announced to a virtual learning platform targeting post-secondary education students, an enterprise SaaS company automating HR processes, and a musical instruction and collaboration platform. All these companies are run by exceptionally talented founders — we are lucky and proud to be their partners.
The Concrete Rose investing partners have diverse and broad experience in investing, technology and social impact. Before Concrete Rose, I was a founder, and an operator at tech startups and social impact nonprofits. Jason Norman has a remarkable ability to identify emerging cultural trends and a track record connecting underrepresented talent with opportunity. Ian Beadle is a sharp financial mind, experienced investor, and high character person. Will Bumpus is a thoughtful evaluator of people and companies, with 30 early stage investments — mostly in companies led by women and underrepresented founders of color.
Our Investment Advisory Committee includes Theresia Gouw, Andre Iguodala, Alan Waxman, and Jeff Weiner. All are brilliant investors, entrepreneurs, and operators with an authentic commitment to investing in and creating opportunities for underrepresented talent.
Other important advisors as we refined our thesis and launched the business include Kobie Fuller at Upfront Ventures, Ben Bisconti of Accel KKR, Renata Quiniti of Renegade Partners, Peter Hebert of Lux Capital, Somesh Dash at IVP, and Greg Waldorf of the Stanford GSB.
We’ve been at this since 2018, building our processes and the Concrete Rose Network while incubating our business at Sixth Street Partners with guidance from Alan Waxman. We sharpened our investment themes and thesis in partnership with Jeff Weiner. Theresia Gouw advised us in building institutional-level venture firm processes. And we raised capital from the right LPs — leaders in Silicon Valley with a previously demonstrated commitment to diversity and equality of opportunity.
We deliberately raised money from a diverse group of LPs who have committed to offering our portfolio companies mentorship, strategic counsel, and access to talent and customer introductions. We began with our Investment Advisory Committee as our Founding LPs. Dozens of Silicon Valley leaders including Reid Hoffman and James Slavet from Greylock, Scott Forstall, Tom Chavez, Zander Lurie, and Josh Kopelman from First Round Capital are also on board. These LPs recognize the opportunity to invest in URM talent, have an authentic desire to move from being allies to accomplices, and have already proven to be invaluable resources for the founders we’ve backed.
Our Strategic VC Partners
We are proud of our strategic VC partnerships with Acrew Capital, Greylock, Next Play Ventures, and Renegade Partners. We will look at companies together, coinvest, and support each other’s portfolio companies. These partnerships will lead to more opportunity for diverse talent, more capital for underrepresented founders of color, and more support for the companies we invest in. They will lead to better outcomes for founders and companies, which is what matters most.
Our Foundation Partnership
Investing in great companies will drive change, but we double down on that effect by committing 50% of our carry to The Concrete Rose Foundation. The Foundation funds organizations expanding the leaky underrepresented talent pipeline and connecting it with opportunities throughout the broader Concrete Rose Network. The Foundation is advised by Sam Cobbs and other leaders at Tipping Point Community, and was capitalized on day one by our Founding LPs. We’ve established partnerships with The Hidden Genius Project, StreetCode Academy, ColorStack, Harlem Children’s Zone, Next Chapter, Venture for America, and Management Leadership for Tomorrow. We’re working on discrete projects and initiatives with these organizations and connecting them with our Network to supercharge their ability to achieve their mission. These organizations are led by brilliant leaders who are intimately knowledgeable of the issues we are trying to solve. We are proud to fund these existing innovative solutions and encourage others to do the same.
A unique energy has gripped our country. Americans are examining their own actions and how their organizations can drive solutions. This is clearly a moment — if not **the** moment — to focus on these issues and opportunities. As a team that has spent the past two years building a business and investing in underrepresented founders, we feel encouraged and inspired.
We’ve seen a number of initiatives unveiled over the past few weeks seeking to do their part to address systemic challenges. It will take every social, political, and economic resource possible to rectify 400 years of compounded racial inequality. Every diversity hiring initiative, every fund dedicated to Black founders, every nonprofit working to close gaps for historically underrepresented groups, and every corporate statement — we need them all.
Many of the organizations born in this moment will fail, just like many (if not most) startups. We have to recognize and be ok with that. We have to embrace pursuing ambitious goals and iterating and evolving the way Silicon Valley has claimed to since its beginning. We can’t afford to not try — it will take hundreds of initiatives and multiple generations of companies before we see significant and measurable results. The gap is that wide.
We at Concrete Rose are going to focus on our core mission of investing in diversity as an opportunity and providing social and financial capital in a meaningful and sustainable way. We’ll support our businesses and will use this moment in time to solidify long term partnerships for our companies, to build our pipeline on the investment themes we’ve identified, and to grow and strengthen our ecosystem not just in Silicon Valley but in places like Atlanta, Chicago, Detroit, St. Louis, LA, and New York. And we’ll continue to do our part to diversify networks in Silicon Valley that are well-intentioned but have lacked the discipline and execution to yield meaningful results.
We are grateful to be on this journey and are looking forward to building on this opportunity — partners welcome.