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Could Serena Williams' Pivot to Venture Capital Spur Opportunities for Black Entrepreneurs?

PhenomenalMAG Staff  |  Mogul Mindset

Serena Williams said that after retiring from tennis, she will focus on a venture capital firm that she started eight years ago.

Williams' declaration sparked talk about how few women and minorities inhabit the elite world of high-stakes venture capital, where investors make risky bets on young companies in hopes of a return.

Serena Ventures is one of a limited number of VC firms run by Black women, but that's changing, says Sydney Sykes, a partner at Lightspeed Venture Partners, which invests extensively in early-stage, female-led startups.

"No one will say venture financing is diverse," adds Sykes. "I've never been more positive. I think we're having a new kind of conversation."

There's reason to be hopeful.

Sykes co-founded BLCK VC six years ago to "connect, engage, inspire, and develop Black venture investors." BLCK VC offers a nine-week program to help young professionals enter VC.

When she started in VC in 2016, 2% of investors were Black. This year, it's 3%.

"That's not a huge difference," she acknowledges. "Now founders come to investors saying, "I want to diversify my capital." Or, "My company can't succeed as it is; it's not varied enough.""

Melissa Bradley, creator of 1863 Ventures, named after the year of the Emancipation Proclamation, says the racial justice movement's reckoning accelerated this transition. Since the death of George Floyd by a white police officer, billions of dollars have flowed from Black investors, she claims.

Elliott Robinson, Bessemer Venture Partners partner, argues that's not enough.

"We talked a lot about access to money and startup diversity after George Floyd, Breonna Taylor, and Ahmaud Arbery," he says. "The numbers are telling."

Harvard and Stanford are Venture capital hubs.

Robinson believes 40% of VC jobs are filled by Harvard and Stanford grads, which haven't developed a broad candidate pool. Robinson, a Columbia MBA, believes it's "jaw-dropping."

Bradley came into VC "when I created my first firm and found there was a lack of finance." 1863 Ventures should "concentrate on Black and brown founders," she concluded.

Her VC firm has helped 3,200 startups produce $1 billion in revenue since its founding, she says. "We focus on revenue and chance because the multiplier effect is in the communities they serve."

Williams' high profile as a top athlete and Black female CEO of a VC business might amplify that effect, Robinson argues, calling her "a little bit superhuman" in the venture capital business.

Serena Ventures, whose motto is "Play to Win," has raised $111 million for new investments this year, says Williams. Health, wellbeing, and athletics are priorities. In an editorial for Vogue, Williams stated 78% of her VC's portfolio "happens to be firms created by women and people of minorities, since that's who we are."

"My spouse is white, so I try to be inclusive," she writes. Serena Ventures was an all-female company until recently, when we hired a man.

Sallie Krawcheck, CEO of Ellevest, said businesses managed by female CEOs get a little portion of VC funding, but the return is better.

"Investing in women-run enterprises is a means to shatter the guys' club," Krawcheck told Michel Martin. "We haven't made as much success with traditional VCs as we wanted."

More women- and minority-led enterprises could help.

BCG thinks that world GDP might be improved by several percentage points, or $5 trillion, "if women and men participated equally as entrepreneurs." A 2020 Brookings Institution analysis states that a paucity of African American-owned firms in the U.S. "threatens Black employment and community development."

Underrepresentation of Black firms costs the U.S. economy millions of jobs and billions in unrealized sales, says the Brookings analysis.

Lightspeed's Sykes argues Williams might have an influence because financial institutions have "gatekept riches from the Black population."

Serena says it's crucial to be an athlete, a strong Black woman, and a mother. “Financial institutions and generational wealth are also crucial," says Sykes.

"That says a lot to the Black community and the next generation," she says.

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