It is no secret that entrepreneurship and venture capital space are suffering from a lack of diversity. Only 2 percent of venture capital is black and Latinx and .002 are black women. While only 1 percent of African American and only 1.8 percent of Latinx led start-ups to receive funding from venture capitals, according to statistics from RateMyInvestor and Diversity VC. “It is kind of eye-opening in the sense of how a good portion of our population thinks about these demographics and what they’re capable of and it is very sad”, highlights Marlon Nichols, Co-Founder and Managing Partner at Cross Culture Ventures (CCV) who sees immense value in unlocking talent of diverse founders and is determined to do it with a difference. Before venture investing, Marlon had successful careers in software and strategy consulting in the technology, media, private equity, and entertainment sectors. Later he entered venture capital as Investment Director at Intel Capital where he also completed his Kauffman Fellowship. In his role, he initially led investments for the software & services and then the New User Experiences investment groups. Marlon later led investments in women and minority-led start-ups through the company’s $125M‘Diversity Fund’, which he helped to launch. But he learned that the companies in which they invested solved global problems, the notion of being funded as ‘diversity’ made it difficult for them to raise capital in the future. This revelation further solidified his passion to support the overlooked minorities and the genesis of CCV took off. He formulated, “I’m going to look at culture from a global perspective and try to identify emerging trends — if we are successful in doing that — and can be successful in picking trends — I’m going to get a high number of diverse entrepreneurs solving problems for the 99 percent”, reminisces Nichols. Founding California based CCV in 2015 with Atom factory’s Troy Carter and The Third Space’s Trevor Thomas, Marlon’s rationale was clear: targeting high-impact start-ups, powering up under-represented entrepreneurs of color, and women but also guiding them through future success. Cross Culture’s latest investments--- include FaZe Clan, the world most dominant professional eSports and Pop-Gaming Team; RealBlocks, a blockchain-powered technology platform that allows for seamless fundraising and investing in real estate; BlocPower, the company uses data, thermodynamic models, structured finance, IoT and edge computing to make city buildings, greener, smarter and healthier; and Phiar, the company developing an AI-driven Augmented Reality navigation app for driving, to name a few—are helping creative entrepreneurs to bring novel and positively disruptive ideas to market irrespective of their backgrounds. “This is the time to be here. If you are going to invest in the companies of tomorrow you have to go where the world is moving to — and that’s black and brown, honestly,” says Nichols.
“This is the time to be here. If you are going to invest in the companies of tomorrow you have to go where the world is moving to — and that’s black and brown, honestly"
Investing in Tomorrow’s Culture
CCV invests in entrepreneurs creating next-generation technology and consumer products. Through their strategic partnership with Atom Factory, they work together to discover, invest in and develop companies that fuel shifts in cultural trends and behaviors within an increasingly diverse global marketplace. That is focussing on a thematic approach when it comes to investing in clients which they call as “cultural investing”. Nichols defines it as, “This means that we match the convergence of global pop culture with consumer needs based on innovation and technology growth. For example, we’ve noted that millennials value flexibility and transparency so an investment in a company that shows a 100% transparent procurement process via a mobile application would be lucrative. By studying market culture and consumer wants and needs, we are able to better understand the types of investments we need. Our ethos is that culture drives brands and brands define the world that we live in. Nothing showcases brands in our current society better than diversity, innovation and pop culture.”
So far, Marlon’s approach has yielded impressive results: The company backed list of some of the fast-growing companies include Fair, the company revolutionizing rental cars; Wonderschool, the Airbnb for preschool; PlayVS, the company bringing esports to high school students to compete for a state championship; and Airspace Technologies, the company provides technology-enabled and time-definite on-demand logistics services. While Cross Culture’s most notable exits include the podcasting company Gimlet (backed at a $36 million post-money valuation) was acquired by Spotify for approximately $230 million. Others are MessageYes which was sold to Nordstrom last year, while Skurt was acquired by Fair in early Feb 2018. Again by including most diverse pools of startup founders (66% of CCVs companies are led by black, Latinx, or women founders) from industries namely health tech, education, media, and financial services, CCV has emerged as the most disruptive firm that is actively changing the face of venture capital.
Marlon Nichols, Co-Founder & Managing Partner
Making a Difference
Marlon is also keenly involved in mentoring, conference keynotes not just to narrow the gap for people of color as entrepreneurs but also to combat the problem of low representation in venture capital by introducing tomorrow’s VCs of color. As he understands the realities as well as the responsibilities of being one of them who try to serve the world past preconceived notions and unconscious bias. “Based on a recent report, it seems that white and Asian women are the only form of diversity in a venture that is improving," he said. "I'd like to see gains in all areas, and more opportunities for black women and Latinas. We've partnered with Silicon Valley Bank to create the VC apprentice program to bring talented underrepresented women of color into the industry."
For Nichols, this isn’t just about bottom-line. Nor it is about proving his investment approach right. But it’s about the moral victory by modeling diversity & inclusion, changing industry culture, and reaping high rewards for the economy and the broad society. And also the catastrophic effect failure would mean for the future of startup’s founders who don’t have typical backgrounds as compared to the (white) founders in the Silicon Valley. “There is no way I can fail at this, I have to win”, concludes Nichols.
The pursuit of such a vision is aspirational and worth fighting for...