#MentalNote · History · Politics · startups · venture capital

It’s Time To Build Pt. 2

Marc Andreessen, one of the co-founders of Andreessen Horowitz, wrote a timely piece during the height of the US COVID-19 crisis. Titled It’s Time to Build. It’s essentially a call to arms for builders to focus on creating a better reality where we’re prepared for tomorrow’s challenges. It was a collective call to create a more conducive environment for builders and sounded like a call to get back to what made the United States great; making and creating. 

Fast track to George Floyd’s death and we’ve seen a significant outpouring of support and collective action around ending racism and destroying racist institutions. Now more than ever, there’s an awakening to the fact that black people are suffering from systems built to disenfranchise and systematically ensure they’re held down. We’re at a pivotal point globally. We’ve all seen the decentralized protests around the world demanding change and justice for George Floyd and others who have died at the hands of those sworn to protect them. People, now more than ever, want to tear down and rebuild these institutions. 

As we think of building and tearing down institutions we should make sure we’re focused on building a more inclusive type of institution. The only way we’ll really achieve the promise of a future where there’s equality for all is to ensure everyone is in the workshop as we’re building. We know this is currently not the reality. Black people lag behind on most indicators that would lead them to be in the rooms to be a part of this building process. In venture capital, for example, where the rubber meets the road when it comes to building, the stats are abysmal. For those who aren’t familiar with the venture capital space, here’s some data to provide some color:

  • 77.1 percent of founders were white—regardless of gender and education.
  • Just one percent of venture-backed founders were black.
  • Women-funded startups received only 9 percent of investments.
  • Latino founders made up 1.8 percent of those receiving funding, while Middle Easterners totaled 2.8 percent.
  • Asians were the second most-backed group, making up 17.7 percent of venture-backed founders.

From Ratemyinvestor.com 

We can’t build this new reality if there’s this much inequality in the venture capital industry. I don’t think individual actors are deliberately enforcing inequality – I believe the “system” of risk capital is flawed and perpetuates actors to not act in an equitable way. Venture capital is just one example. There are disparities in healthcare, education, job creation, urban development, and etc. Everywhere we look, there are systems that disproportionally affect black people, and most of the time, for the worst.

If we aren’t careful, we’ll build on the same bias and power structures and we’ll be back in the same spot 20 years from now wondering how we got to where we are. 

venture capital

The License To Suck

Chris Rock, one of my favorite comedians, said something some years ago that changed my perception of equality in venture capital. I’d recommend watching the whole thing. He’s dropping gems, especially at the end. Its just a 3-4 minute video.


While this goes against what most black people, especially in hyper-competitive white-majority spaces, have been taught, black founders seeking venture capital need this form of equality the most.

Let me explain…

Benedict Evans wrote an article in 2016 on failure and the economics of venture capital here. I’ll be cherry-picking some points so you don’t need to go and jump into reading it now. Essentially, Evans was able to get aggregate data from one of their limited partners on over 7000 investments made by the venture funds they deployed capital to from 1985 – 2014. All to say, they had a treasure trove of data to explore VC activity over a 29 year period.

Here are some major takeaways:

  • Around half of all investments returned less than the original investment.
  • 6% of deals produced at least a 10x return, and those made up 60% of total returns
  • A fund gets better returns by having more really big hits, not by having fewer failures

The way venture works, most investments have a high probability of failure, and few companies produce significant returns. Speaking with black founders, there seems like there’s an extraordinary case needed to justify investment in their startup to early-stage investors. Most of the time, they feel like they need to have everything figured out… exceptional team, major traction, product, and massive market. There’s a return the fund hurdle that’s put on each opportunity. Where in other situations, white founders have been given what I like to call “figure it out money”. You may have one exceptional part of the puzzle going for you but go figure it out. This return the fund hurdle isn’t applied equally.

Most companies who get “figure it out money” don’t. Some do. But the opportunity to figure it out or not is at the core of equality. Entrepreneurship is a muscle, the more you flex it, the stronger you get. I agree, black founders need to return the fund, just like every other founder should try to if they accept venture capital but VC funds have to be okay with the reality that black founders will most likely return less than they invested, just like their white counterparts.

“It’s not that I want to be bad, but I want the license to be bad and come back and learn.”

– Chris Rock

A couple of extraneous thoughts I couldn’t fit into the essay

  • My main goal was to build on a quote from a conversation on Twitter yesterday. “The key here is that Black people need the same room for failure and repeated failure that our white peers enjoy. And can turn their failure into the narrative, in which they’ve emerged on the other side more enlightened.” (from The Myth of Blackness in Venture ) I wanted to add more color to the mechanics behind why failure is essential.
  • I’d often get into arguments in meetings with my white counterparts about the market opportunity, especially around black founded companies. To be honest, I’ve never really trusted market opportunity slides or rationale. If you’re investing early, the math will most likely change.
  • That goes to say, its 2020. There’s more than enough data for VCs to learn and understand black focused market opportunities. There’s untapped value to be created if you’re willing to explore.
  • I’m torn on the conversation that black founders need to find larger markets than black people. I think its a simplistic and outdated statement. Most people build for who they know and what they know. Most of the time, companies who brand themselves as going specifically after black customers most likely have adjacent markets that could add to scale. What I’m trying to say is I somewhat hear the market opportunity argument but it’s up to the investment team and the founders to really think about the bigger opportunity. Extend the same imagination about how an opportunity can work to black founders too.
History · Learning

This Question Came Up Today

A good friend of mine, who is a well-known agitator, asked a question about Africans role in facilitating the transatlantic slave trade. I guess some people weren’t too clear on what happened. So based on the history classes I’ve taken and books I’ve read, I tried to answer as best I could. Of course, it turned into a book.

Ugh… I wish it was easy to deconstruct but I’ll try.

Most European countries were not able to build solid enough networks to acquire slaves without the help of a network of African leaders and traders who had struck commerce agreement with each other. It started off as raw materials exchange but slavery became one of the main requests after a while. You’ve probably heard that most slaves were captured as a result of wars.

What people don’t understand is how this scaled. At the time, there was no collective identity and Africa as it is now with countries and nationalities. It was mostly tribal (for some exemptions like certain empires that did exist) and fragmented. As Europeans started to see how profitable the slave trade was, they started to encourage conflict among tribes. They signed military agreements with opposing tribes, armed others and leveraged conflicts to accelerate the number of slaves that would be taken as a result of wars.

People also fail to understand that many groups we’re not going. There were certain villages that build fortifications, came up with tactics to make it not worth their while to take slaves from that area. For example, collective hunger strikes, actually going to war with traders, Killing them, “special ops” teams that would sell slaves to see where they went and would set them free after. Europeans, over time, saw these groups as “not profitable” to engage and stayed away.

There are so much context and fragmented narratives here… but from this, you can take away three things.

1. Yes, there were people who collaborated with the European traders to facilitate commerce in which slavery became a big driver. There are Africans who benefited from this.

2. The only way chattel slavery scaled is by European intervention. By supplying guns and protection to specific groups, the Europeans increased their supply of slavery and manipulated political and economic realities in West Africa.

3. A lot more folks in Africa were not going than people give credit.


I decided to give a long answer because the relationship between Africa and the African diaspora has been on my mind for the last couple of days. I’ll probably follow this up with a longer post on what I’m thinking.

History · Self-Revelation · Why?

Is Protesting Effective?

So for those asking the question, “Are riots/protests really effective?” There’s some research from Omar Wasow, an associate professor at Princeton, that takes a look at Black protests in the 1960s and its ability to move elites, shape public opinion, and voting. If you don’t feel like reading the whole thing, here are some quick takeaways:

1. Violent tactics by the state or protesters operate as a double-edged sword. State repression subjugates activists but focuses media attention on the concerns of nonviolent protesters. While violent tactics by protestors are framed as a breach of law and order.

2. Black activists overcame structural biases, framed news, directed elite discourse, swayed public opinion & won at the ballot box. An “eye for an eye” in response to violent repression may be moral & just but this research suggests it may not be strategic, but it achieved its goal.

This time around, three main changes will enhance or detract from its effectiveness.

1. Fragmented media – People have more media channels that are skewed to their already existing notions of reality. (Facebook groups/ TL, twitter followers, more skewed tv media)

2. Decentralized first-hand reporting – Everyone with a camera provides a unique perspective which leads to a diversity of data points that can reinforce or detract from a multitude of narratives.

3. Rapid mobilization of protestors. Now more than ever, it’s easier to scale protests beyond a particular city, which can lead to a larger dichotomy between local, regional and national narratives.

#MentalNote · History

Some Thoughts On This week 5/29/20

  1. This is a cycle. A black person dies. We get angry. The law intervenes. We assume justice comes and then it doesn’t. How do we break the cycle?
  2. There are several definitions of justice. Most relevant to this situation, – the administering of deserved punishment or reward. Justice in the legal sense makes sense but morally, especially around situations of murder, justice as a transaction doesn’t seem to be equitable.
  3. As black people, we need a new social contract with the United States. For those unfamiliar, social contract theory, made famous by John Locke and Thomas Hobbes is the view that persons’ moral and/or political obligations are dependent upon a contract or agreement among them to form the society in which they live. Between COVID / police violence, and economic downturn, there’s probably no better time than now.
  4. These news cycles are Jimmy John’s fast now. Wasn’t it just a week ago that Joe Biden had that gaff with Charlamagne on Breakfast Club? Are people still mad at him? Honestly, it feels like it was weeks ago.
  5. Joe Biden is going to have to put an avengers (endgame) level team together if he wins in November. Between international diplomacy, domestic affairs, a pandemic, an economy that is about to collapse, and a gutted government, he’s going to need people who can execute on day one.
  6. In moments like this, I feel an immense sense of hopelessness. What can I do to really change this world or stop things like this from happening? I’m reminded of a message from Robert F Kennedy –

“Few will have the greatness to bend history itself, but each of us can work
to change a small portion of events, and in the total of all those acts will be
written the history of this generation… It is from numberless diverse acts of courage and belief that human history is shaped. Each time a man stands up for an ideal, or acts to improve the lot of others, or strikes out against injustice, he sends forth a tiny ripple of hope, and crossing each other from a million different centers of energy and daring those ripples build a current which can sweep down the mightiest walls of oppression and resistance.”

Also gotta throw a Tupac/Wale quote here as well.

I’m not saying I’m going to change the world. But I guarantee I will spark the brain that will change the world