Majority Black-Led VC Firm Raises $203 million

[desjardins]

I understand the pessimism. People got burned supporting Bevel. Black face backed by (almost) all white money that got sold to white corporation cashing those white men out . Tristan got a bag out of it but really wasn't what a lot of people assumed it was

This is interesting cause i'm not sure I ever heard of a VC raising money, I thought they were usually the ones giving the money. On the crunchbase profile you can see half of the partners aren't black and I'm curious what the make up of the $200m+ raised is coming from. https://www.crunchbase.com/organization/mac-venture-capital/people

 

[Alix217]

I understand the pessimism. People got burned supporting Bevel. Black face backed by (almost) all white money that got sold to white corporation cashing those white men out . Tristan got a bag out of it but really wasn't what a lot of people assumed it was

This is interesting cause i'm not sure I ever heard of a VC raising money, I thought they were usually the ones giving the money. On the crunchbase profile you can see half of the partners aren't black and I'm curious what the make up of the $200m+ raised is coming from. https://www.crunchbase.com/organization/mac-venture-capital/people

VCs raise money for funds all the time. Even one of the biggest VCs, Peter Thiel, funds companies with other firms/VCs as "partners"

They'd rather not be all in with their own money and spread the risk of financing evenly.

What you're thinking of is Angel Investors who are solo funders of businesses and just give out starting capital or chunks of money at the beginning of a company for a big piece of equity. That's what Thiel did for Facebook, but Facebook went and got other VC investment later on in other funding rounds.

 

[Frangala]

I understand the pessimism. People got burned supporting Bevel. Black face backed by (almost) all white money that got sold to white corporation cashing those white men out . Tristan got a bag out of it but really wasn't what a lot of people assumed it was

This is interesting cause i'm not sure I ever heard of a VC raising money, I thought they were usually the ones giving the money. On the crunchbase profile you can see half of the partners aren't black and I'm curious what the make up of the $200m+ raised is coming from. https://www.crunchbase.com/organization/mac-venture-capital/people

VCs raise money in order to make investments into portfolio companies. The capital can either come from very wealthy individuals known as HNWI (High Net Worth Individuals essentially multi-millionaires types) and institutions (those can be pension funds, foundations, sovereign wealth funds) those are called limited partners (LPs) they commit capital to a VC firm and fund like Mac Venture and then Mac Venture takes that money and invests in companies in which as a result for making those investments, the VC firm/fund get an equity/ownership of that company.

The VC/fund and the limited partners (LPs) who committed capital to that fund hope that those companies grow in value. So if VC fund gets $1M of commitment to invest in company X, maybe 5 years later company X is now worth $10M. VC will be incentivized to sell company known as an exit) through either company going public through an IPO where you and I can buy shares or another private acquisition another VC buying it or another acquirer that sees synergies in acquiring company X and feels like it can add even more value.

The VC fund gets paid two ways usually (1) Management fee which is not contingent on performance of their investments the Limited partners have to pay like 2% of committed capital (2% of $1M = 20,000) that money is basically for the VC's daily operations i.e salaries, office rent expense, utility bills etc.. (2) Carried interest - which is a part of the profit. In the example I laid out, the VC made a $9M return/gain (invested $1m and sold it at $10M) therefore they get maybe 20% of that $9M ($1.8M). The carried interest part is to incentivize performance and picking winners and contingent on performance.

The limited partners (LPs) who put money in the VC fund get their initially $1M investment + 80% of that $9M gain ($7.2M).

If you keep picking winners, then the easier for you it is to raise a new fund/money because your track record speaks for itself.

Of course the VC could always pick bad investments

 

[#1 pick]

Majority Black-Led Venture Capital Firm Raises $203 Million, Positioning It For Strong Future Growth

See what a mostly Black-led venture capital firm is doing to become a larger player in the multi-billion dollar financing space.

www.blackenterprise.com

MAJORITY BLACK-LED VENTURE CAPITAL FIRM RAISES $203 MILLION, POSITIONING IT FOR STRONG FUTURE GROWTH​

Jeffrey McKinneyJuly 4, 20221988

MaC Venture Capital team, from left to right: Marlon Nichols, managing general partner; Michael Palank, general partner; Charles D. King, general partner; and Adrian Fenty, managing general partner (Photo credit: MaC Venture Capital)
Collecting almost double than its first seed-stage fund, the second fund for MaC Venture Capital raised $203 million that will greatly help boost its capacity to grow.

The MaC VC Fund II just closed after $110 million was attained in Fund I in March 2021. The event is trailblazing for the firm that calls Los Angeles and Silicon Valley its headquarters on several fronts.
Managing general partner Adrian Fenty says it is extremely important that a majority Black-led venture capital firm raised more than $200 million for one fund because it helps achieve diversity and brings more people into the venture capital world.
With the new funding, Fenty’s firm will have over $412 million in assets under management, he tells BLACK ENTERPRISE via email. The firm claims the financing will make it one of the nation’s largest majority Black-owned venture capital funds.
“This puts us in a great position to continue making impactful investments, help our companies grow, and for MaC VC to be a leading seed venture capital fund for years to come,” Fenty says.

Bringing in almost $100 million in new investors for Fund II allows the firm to take bigger ownership percentages in companies, he adds. “Having this $203 million fund from existing and new LPs (limited partners) is affirmation that the type of deals we invest in and work we’ve been doing is what professional investors want to put their money into,” Festy explains.
MaC Venture Capital emerged in 2019 after the merger between Cross Culture Ventures and M Ventures.

Since 2019, the firm has invested in 50 companies, with top performers including Pipe, Edge Delta, Stoke, Zigazoo, Epsilon3, and Spartan Radar. Before forming MaC, its four founders had invested in over 135 companies.
“We’re supporting the next generation of companies, like Spora Health and Avala, who are bridging gaps in access and opportunities, and our Investors are trusting in our cultural investment framework which guides our investment strategies,” Fenty says.

Fenty says the firm invests in technology startups leveraging shifts in cultural trends and behaviors. He added it seeks to work with ambitious founders who want to build billion-dollar companies. The new funding will be invested in a range of sectors, including health tech, fintech, Web3, and aerospace.
Managing general partner Marlon Nichols shared most of MaC’s investments are in the United States, notably in California, New York, Washington, and Texas. The firm has a number of international investments, particularly in Latin America and Africa. Like Fund I, Fenty says MaC plans to invest in 45 to 50 companies with the new fund.
However, with Fund II, he says the goal was to raise $200 million so the firm could write bigger checks, have bigger ownership percentages, and take bigger stakes. This time the firm expects the average check size to range from $2 million to $3 million, up from $1 million to $1.5 million in Fund I.
And MaC has made diversity a vital part of an investment strategy. It reports 36% of portfolio companies are led by women founders, and 69% have BIPOC founders. The firm disclosed over $99 million has been invested across its portfolio since the two funds were launched. The investment is needed. Reports show data from Crunchbase gathered for Reuters revealed startups with a Black or Hispanic founder got just 3.5% of the banner $311 billion U.S. venture funding in 2021, up from an average 2.5% the prior five years.
To boot, MaC reports over 50% of its investment team is Black and 25% women.
General partner Michael Palank said, “MaC Venture Capital understands establishing diversity in leadership is not only the right thing to do, it’s the most strategic investment strategy, too.”
Check out more details on the MaC news here.

Wow!