Kwame Anku: [00:00:00] Prince asked this question kind of hypothetically, but also in a very challenging way, just asking, where are the black Mark Zuckerbergs and what are you guys doing? Your generation, what are you all doing to make those folks a reality?
Johnathan Holifield: On today's show, we talked to Kwame Anku, the founding managing partner and chief investment officer of the Black Star Fund. I met Kwame back in 2016 when we both presented during Tech Jackson, an innovation summit in Jackson, Mississippi. At that time, he was laying the foundation for what became a truly pioneering idea.
Christopher Gergen: Since then, Kwame put that vision into action and launched Black Star Fund in 2021. The Nation's first black LED venture [00:01:00] capital firm that is invested now in 23 black founders, over 50% of whom are women. It's also attracted capital from a growing network of high net worth black individuals like Robert Jones, whom we featured in our previous episode.
Johnathan Holifield: Welcome to Moving the Needle, a podcast where we have conversations with social innovators and problem solvers doing critical work in cities and rural communities to create new pathways to generational wealth. And as we'll hear from Kwame, they are creating the on the ground conditions to transform underestimated human assets into sources of American global competitive advantage.
This is Jonathan Hollifield.
VO: And I'm Christopher Gergen. As your co-host,
Christopher Gergen: we're here to lift up solutions that are giving us hope and can light the way for policy makers, community leaders, philanthropists, private investors, and engaged citizens who care about equity [00:02:00] and economic impact.
Johnathan Holifield: Kwame. Cool. How are you, my man?
Kwame Anku: Excellent, sir. Good to be with you both. Excited to jump into the topic today.
Johnathan Holifield: Very good, very good. Well, Kwame, you have a story and I think it'll be instructive for our audience to learn a little bit about what brought you to where you are today with one of the leading firms investing in entrepreneurs of color, particularly black entrepreneurs.
Sure.
Kwame Anku: Well, I appreciate it. Thank you so much. You know, as you can probably guess from my name, Kwame Anku, that's a Ghanaian name. Uh, and my folks are actually from Ghana. My father was born in Ghana in the early forties. My mother's actually half Ghanaian and half British. And I, I share that with you. It's really twofold.
One, because when you meet Ghanaians, they always talk about their family first. Oh. Uh, but also it helps to shape the perspective that I'm bringing to the table. Even though, you know, myself, my siblings, we were born and raised in the United States and Ohio specifically. Um, you know, we always had a very global [00:03:00] perspective, uh, because our folks were, were immigrants.
And we had also a unique perspective because we were first generation of a dual experience in America. And what I mean by that is that I'm experiencing the world as what we would call a black American, um, because of the way that our society was set up and quite frankly, how the society would view me.
But I don't have the cultural connection to the country as a Black American because my parents are actually not from here. So it gave me always a unique perspective. It was being able to see from being able to look inside the house from outside with that outside kind of immigrant perspective. And it gave me the, the existential understanding very clearly of what was happening inside the house because I was born here.
So when you see the different disparities, and I experienced these different, you know, disparities as a, as a kid growing up, it wasn't just things we were watching on television, it was things I was dealing with. Whether it was unconscious bias or very conscious bias, or different levels of racism or exclusion.
[00:04:00] All those different things were at play. But I can also say that witnessing my parents, starting from very humble beginnings, uh, you're talking about my father in a village with no running water, no electricity. He was in a country that he was 17 years old before the country was independent. So he was basically a colonial subject for the first 17 years of his life.
And my mother, you know, pretty much grew up in a coal miners town in, in South Wales. From the age of two. So to see the two of them be, be able to build a life, literally the American dream in the seventies and eighties, uh, where my father be was a physician and my mother was the business operations manager for that enterprise.
And ultimately, uh, be very successful in business, be very successful as a physician, helping to cure cancer. And then, you know, raise kids that ultimately went to Stanford, one went to Columbia and one went to Cal. You know, so I watched that firsthand. So as difficult and as challenging as it was, as difficult as in challenging as some of the systemic issues and, and, and [00:05:00] structures are and, and, and exist, it's possible greatness is possible.
Transformative lifestyles are possible. And I witnessed that as a kid and it really shaped a lot of what I do, uh, as an investor in, in the world of venture capital.
Christopher Gergen: So let's build on that. So obviously modeled early on in terms of your parents and something that you. In your own life in terms of being able to continue to, to strive for excellence.
And I'm curious when you, in your own journey, started to really think about how you could pay it forward, get engaged in really fostering the potential, love the entrepreneurs around you, recognizing the fact, to your point, anything's possible. And how do you create the conditions by which excellence is realized?
And when did that start to sort of percolate in terms of your own journey, uh, [00:06:00] as a, as a leader?
Kwame Anku: Sure, sure. You know, I think probably like all of us, right? Your childhood experiences has shaped so much of how you see the world. And I remember, you know, as a kid, you know, it was, it was all the subtleties. So as a young kid, you're starting to realize, wow, there's a way in which people kind of treat me a little bit different, and I'm not quite sure why that is.
And then you start putting two and two together that there was a perception, and granted, you have to put this in perspective, right? When I was five years old, it was 1977, right? But kids are very perceptive. I understood that there was a way that people talk to me and sometimes our family differently. I remember when we would go to restaurants and they would always try to seat us in the back or near the bathroom, and my mom would always get really mad, and as a kid I couldn't really put it all together.
And you start realizing, oh, this is the bias. This is the set of assumptions that people are putting on you because of how you look. And then you start realizing it's not really just you. It's a whole group of [00:07:00] who you're associated with. And you understand fundamentally that that's wrong. Now maybe there's an emotional experience and you feel sad or you feel bad, but even as a kid, I could still separate that intellectually and go, this isn't right.
Because there's great people who are being seen as less than and, and then you start, as you get older, you realize it's not that they're being seen as less than, it's they're not even being seen at all. And then you start, as you get become a teenager, then you start to get a little mad. And then you start realizing, well, you could just be mad or you could figure out what role are you gonna play?
How are you gonna make things better? How are you gonna change this? And as most young people, you're very idealistic. And I was really into music and film and so my, you know, my uh, kind of inspirations were like Spike Lee and, you know, conscious rap artists. So thinking how do we use music and how do we use media to transform consciousness and make the world better?
And we also came up in a time where we watched artists change pretty [00:08:00] much single handedly apartheid in South Africa. Bring in the consciousness bands like U2 and bands like Public Enemy and all these different folks who were raised in the consciousness of a generation. And so I got really swept up in that as a young person initially.
That's what I really wanted to do. As things progressed, I was fortunate enough to go to Stanford and undergrad and part of the, kind of the digital media revolution. And really just a few years before we saw the beginning of the internet transform the world. You know, I started realizing it wasn't just about making music and films that would help.
Raise the consciousness. It was about owning those institutions. It's one thing to make a film, it's another thing to be Warner Brothers. It's one thing to make a song, it's another thing to be Sony music. It's one thing to make a video, it's another thing at the time to be MTV. So I started becoming very interested in the business part of the media and then fast forward what eclipsed that really was the [00:09:00] internet.
And so then when you put all those pieces together, I was really fortunate to have an opportunity to work with my, uh, favorite artist of all time, the legendary rockstar Prince. And I got to work with him at the later stage of his life, few years before we lost him. And you know, that's where it all came together for me, where it was like media, internet, equity, ownership.
And the path would be venture capital. And it literally came as, as Prince asked this question, kind of hypothetically, but also in a very challenging way, just asking, where are the black Mark Zuckerbergs? And what are you guys doing? Your generation, what are you all doing to make those folks a reality?
And when I thought about it, I said, well, and I'm a simple guy. You know, I, when I was at Stanford, you know, Reid Hoffman was a contemporary man, Peter Thiel, who wrote the first angel check that Facebook was in law school when I was an undergrad, [00:10:00] Jerry Yang, who created Yahoo, was a couple years ahead of me in school.
So I thought about it and I realized, you know, all of these transformative companies, including Facebook, all started with a check between a hundred thousand and $500,000. Now, that doesn't mean that's the magic formula to create a multi-billion dollar unicorn, but what it does mean is that's the seed. So if you just, if you're looking for the simple answer to Prince's question.
Where the black Mark Zuckerberg's, the extension of that is, well, how are they created? And if your answer was the answer that I basically believed was the case, Hmm. That's about aggregating a few hundred grand and strategically placing them that capital in the hands of extraordinary founders, visionary, extraordinary founders could, creating game, changing planet, changing companies, but not just the capital.
But then supporting them with business development and access to people who can make their vision a reality. I believe that that was the winning formula, and that's what started me on the journey of venture capital, specifically investing in black founders. [00:11:00]
Johnathan Holifield: You know, Kwame, uh, listening to your personal narrative and your journey.
Uh, some common, uh, themes in my own journey and, uh, what resonated was immersion into probably late eighties, early nineties, conscious rap. Um, I'm there 100. I'm a little bit older than you, but I'm there. 100. Well, also interested in, when you describe being born here, but your parents not, and not having the cultural connection, can you dig into that a little bit?
How perhaps was that limiting and perhaps how, perhaps was it freeing as well?
Kwame Anku: Yeah, so I think it was limiting from the standpoint. Sorry, I appreciate the question. Right. It's limiting because at the end of the day, you know, kinship is about connection and, and black folks in the country, there's just always this quick inherent understanding of one [00:12:00] another, uh, because of the kinship connection.
But that kinship connection again, isn't skin color. It's experiential shared experiences. And so when your folks, you know, when you have x generations of, of grandparents and great grandparents, and maybe you're living in California, but there's a common story of a migration from the south. And that common story isn't just migration, but that's escaping Jim Crow in the South if it's a certain type of music connection, even soul food, right?
That connection that binds people. I did not grow up with that. And I didn't have a story of a grandma who was from Mississippi, or a great-grandmother who was, you know, from North Carolina. And so I didn't, I didn't, I didn't feel that connection that way. My connection was experience, right? We are all experiencing this duality together.
So I felt completely connected to that level. So it was a bit limiting because of just not being, being able to fully co identify. Right. And also, and vice versa, right? Could people really co identify with me, who's, you know, having parents who weren't from this [00:13:00] country, uh, a mom with a British accent, a father who wasn't Black American, but was very, very, very Ghana.
So those things, you just kind of sort through and as a kid, like all of us, you, you see those things as maybe deficiencies or impediments, but then as you get older you realize that that was the, those experiences were the things that ended up creating the tools for you. To operate in your gifting, you know?
So I like to say that, you know, adversity is God's chisel to manifest the masterpiece of your destiny. And so that adversity that you're seeing, I can't co identify and I'm feeling somewhat estranged. You know, as you get older you realize, oh my God, it's actually a gift. So now let's flip the other side of your question, right?
It's limiting here, but how is it? How is it helpful? Here's how it was helpful. I experienced that unconscious and conscious bias and sometimes overt racism. But I can tell both of you, at no point in my life journey did I ever believe that. [00:14:00] Like I never felt less than. I never felt like I couldn't do anything and everything I wanted to do.
And I think that's part of the weight of multi-generational kind of trauma, uh, is that a thing is so deeply embedded almost at the cellular level when you've got hundreds of years of oppression. You want things to be better, you willing, you got the energy to fight, but you deep down inside this thing is so heavy on your, on your soul that sometimes it's hard to believe that it actually can be done.
And so what was helpful to me is that, you know, in my own journey is that I didn't actually have that. And plus, as I shared with you, I saw firsthand, I mean, my father comes to this country as a dark skinned African in 1960s, and that becomes one of the country's leading oncologists curing cancer in the eighties and nineties with no internet.
You know what I mean? I, I watched the whole journey. And I don't mean that from like a hor allergist thing and everybody can just pull theirself up by their bootstraps. I don't mean that, what I mean is that. All I needed to see was, it was possible. But in my spirit as a [00:15:00] five-year-old kid, as a 15-year-old kid, as a 25-year-old kid, now as a man is in his fifties, I never thought I couldn't do it.
And so this is where it's so helpful because look, let's go back to VC in 2015, there was not one venture capital fund in the United States investing in black tech entrepreneurs. There wasn't one. And that, and, and that's not even a, a, you know, a, a, a commentary on bro culture in Silicon Valley. That means no black people had even put together five, $10 million to invest in black entrepreneurs, right?
So when we, when we jumped into that, into that foray, we didn't go, well, nobody's done this before. This is gonna be really hard. Maybe we should do something else. We just said, it's important, it needs to be done. We're the first to do it, so be it. And hopefully if we do it right and do it well, we can be a catalyst.
And I certainly don't take responsibility for the massive [00:16:00] transformation that we've seen, but I, I know what role we played considering that we were creating one of the first funds to do this with the Black Angel Tech Fund. Started with some Stanford folks, and then later what I've done with Blackstar Fund.
Uh, and when we see all the amazing funds out there from Backstage Capital to Harlem Capital to Mac Ventures, and the list goes on and on and on, we played a, a, a pivotal role in the history, uh, so that we find ourselves now literally less than 10 years in 2024 with dozens and dozens and dozens of extraordinary funds focusing on folks of color with literally hundreds of millions, in some cases, uh, dollars, assets under management.
If we were all collectively able to do that in 10 years, imagine where we're gonna be in another five.
Christopher Gergen: So I wanna dig into that Kwame, but, but before we do, I actually wanna, I wanna unpack one other thing that you said earlier in the conversation, which I think is really important 'cause it's the mindset shift.
And I think actually it's a bit of a generational mindset shift, which is the idea of ownership, right? You've told this remarkable [00:17:00] story of your parents, uh, in their respective journeys to get to where they were, to be able to model for you, uh, and your siblings like what is possible. But in that case, it often is, is quite vocational and it's, uh, you know, you're getting into a career path.
You are getting into a job that is respected and understood. And so, you know, the, the path to a doctor is understood, uh, and is, and is a path to a certain form of prestige, wealth, success. Entrepreneurial path has, you know, significant risk associated with it, but it is a path, the ownership that you're talking about, and this conversation we had with your friend and mentor Robert in a previous podcast, which is like the really and important transition to understand the power of ownership.
Can you speak a little bit more to that? Aha. You know, and I love the story of Prince and I love the story of being [00:18:00] able to connect on that level to say, how do I empower next generation owners? Because that is a path towards generation, true generational wealth creation.
Kwame Anku: Yeah. So it's, so, it's a powerful, powerful question and thank you for bringing it up.
You know, um, there's an intersection still with my, my parents, right? Because remember, and I love that you made that distinction in terms of generational difference. My father's generation was really the last generation of, of medical physicians, practitioners that were, that were business owners. And so for the most part, folks who are working in the medical field today, it's not, it's not that they're not doing well, but for the most part, they're not in private practice.
They're actually working for a hospital. They're working for an HMO, that type of thing. So as a child, I would go to my dad's office and see my parents working. I would be there after school or, you know, on the weekends. And, you know, my father on the door it said, Vincent Ku MD Incorporated. Now, they never sat us down and talked [00:19:00] about the importance of ownership and generational, this, that, and the third.
But that was the, that was the baseline norm. We were clear. There was, there was two words that my parents never said at the dinner table my entire life, my boss, they never said that. Now, what they did talk about was the employees, what they did talk about was billing. What they did talk about was. I remember going to see where my dad was gonna open a new office and I'd saw my parents sitting down with the architects and the layouts and the plans.
Like I saw all that, right? So I was watching onerous functioning with an onerous mindset. But remember the journey was, you know, I was five. I remember being five years old and sitting on the floor of my dad's office with my mom. He was an electric pencil sharper, and they had cardboard boxes. 'cause my dad couldn't afford a file cabinet.
My mom took a six month leave from her teaching position when she was teaching fashion design to be his office manager. And that [00:20:00] six month leave ended up being 14 years. So I watched them build a business from the ground up where we had a pinto with the foam coming outta the seat when I was five. And within 10 years we were in private school.
You know, so I saw the whole journey, right? So it was, I was witnessing, when we talk about class, it seems somewhat like, uh, uh, like we're talking about cast. But when we think about an owner as a mindset, that's the mindset of freedom. So here's the village boy from Ghana who had an owner mindset. He came from nothing and didn't own anything.
And so we saw that and because I saw that and then I saw the systemic problems, any kind of inequity you want to talk about. And I just fundamentally believed that the solutions would be pe. 'cause look, lemme put it this way, I, I've learned that people who are marginalized, exploited, taken advantage of, in some cases worse.
That happens when you don't have power, [00:21:00] and when you're not an owning group, you don't have power. And so that was actually the driving thing for me because I'm looking at the thing going, how do you have all these disparities? And if you take it even to vc. Where, you know, people like to tout this number all the time, less than 1%, and it's been less than that.
Uh, founders and fund managers that are getting venture capital allocations. That means you're, you're signaling to the market that this is not an owner group and this is not a group that can multi, can make multiples on investments, which is why my career, I never talked about the lack as an investment thesis.
If I were to sit down with you two as allocators potential allocators with my fund, I'm not gonna start with less than 1% of venture capital lands in the hands of African Americans. I'm not gonna start with that. This is what we did. We literally sat down with people and said, oh, um, our analysis has get is we've come to a conclusion that black led [00:22:00] companies represent a new asset class.
And people are like, wait, what? What? Wait, what? I'm like, yeah, because think about the, the traditional venture capital model is, is like this. It's a funnel, right? It says there's a thousand companies at the top. You'll engage a hundred, you'll make 50 offers. You write 10 checks, seven will fail, two will return capital, and one will be a unicorn to make all the money.
Now, if African American founders historically have not been playing in that game for venture capital for like, say, 40 years, what I realized is that the model is actually flipped upside down and we should be able to go, in theory, this was five years ago. In theory, we should be able to go to the top of the, of the apex, find best in class founders who are African American.
Have no competition to get into those deals because obviously no one's paying attention. Yeah. Because they're
Christopher Gergen: under invested in,
Kwame Anku: yeah. Right, right. And you don't have to sort through who the real winners are because that means, in theory, you should be able to deal with people who are MIT rocket scientists and Georgia Tech rocket scientists.
You should be able to deal with best in [00:23:00] class biotech engineers. And that's exactly what happened. And then I said, this group, because of that shared experience for an African American founder and I I, I'll give you one for example, and I talked about Georgia Tech trained, I have, I have a Georgia Tech trained US Air Force veteran rocket scientist, who developed a digital cinema system that bounces the movie signal from a movie theater off of a satellite, uh, excuse me, from from the studio to a satellite to the movie theater who happens to be a Ghanaian woman.
That's the upper echelon. Of entrepreneurs and, and of, of, of creative business people. So you, you, you don't have to sort through a thousand people trying to find some needle in a haystack. You can go straight to the top and you're dealing with the creme de la creme de la creme. And my argument wasn't, they weren't the creme de under the creme of black [00:24:00] entrepreneurs of entrepreneurs.
So what we said is, this is why I love sharing this stuff, Christopher and Jonathan, because before five years ago I was selling an idea in a theory in 2024, I've got the numbers and the results. So what does venture capital do? 70% attrition. We talked about that. Okay. As of today, I have over 80% of my portfolio is still up and running in business.
Over half of the portfolio did over $5 million in revenue last year. Half the portfolio are black women. Over 50% of the capital has gone to black women. See, this isn't about skin color and genetics. We said this population group that has had this particular existential journey of, of life historically has a different mindset, a different shared life experience, a different way of doing business.
And we as [00:25:00] a fund understand that it's both. It's the capital, it's the business development support, and it's the access to decision makers who can help those companies accelerate their growth. That that's the formula. So you may have believed that five years ago, you may not have believed that five years ago, but in 2024, now we're bringing the data.
And the thing that I love about that is it takes us out of the argument why Silicon Valley should support venture capital folks led by black. No, no, no. If you wanna do it, great. If you don't, why? It doesn't matter if you know why, because my LPs are very happy. See when they get their balance sheets and my other friends are in other funds and they're down 20, 30, 40, 50%.
You see what I mean? My healthies are very happy with those quarterly statements and annual statements, and our portfolio companies are thriving. They're hiring, they're growing, they're having, they're making significant transformations in their industries, and that's what we set out to do.
Johnathan Holifield: Kwame [00:26:00] and Christopher, this is an interesting interchange, uh, particularly about the, uh, generational differences, um, and growth.
I'm a big fan of narrative, not because it's empirical, because it's a reflection of what people are thinking about and talking about and what's important in the national narrative. This notion of equity has really taken off in the last, let's say five years or so, but it's a almost exclusively a fairness argument.
And it's from largely younger generations connect to me this notion, and I believe it, equity is ownership. Why is that not a pervasive part of the national discourse, even though the people driving that discourse are younger people?
Kwame Anku: Yeah, so I think there's two things. I think there's two things. Let's deal with the fairness thing first.
I think you, [00:27:00] you have a generation that had a very different upbringing than their parents' generation. Right? And I'm, I'm somewhat guilty of it as a parent, and I'll just, I'll say this quickly to make the point. You know, when I was seven, like most of us, I took a bus, 40 minutes to school, 40 minutes back, I got off that bus, walked by myself, came to the home with a key, opened the door, was in the house for two hours before my parents came home.
That was the norm for us, right? Most of us did not raise our children that way. There was so much that we just kind of gave them and kind of made it so easy that it's that a lot of them live in that narrative around just fairness and was just, this isn't fair. And the thing with that is you're analyzing the system as it is, you're making a declaration about the disparity, and then you're just kind of waiting for someone else to do something about it, to change it.
And you're just upset that it's not equal for me. And I think for us, we've called these the dynamic, a lot of different things. We've tried multiculturalism [00:28:00] and then diversity, and then we've added all these additional things on top of it. You know, equity, inclusion, belonging, all these different things.
But all of this was a reaction to one simple thing. The country wasn't being what it said it was.
Johnathan Holifield: Dr. King would say, be true to what you put on paper.
Kwame Anku: Right, exactly right. So it's the land of the free, it's the home of the brave. We are born with these inalienable rights that all of us are created equal, and one can make it kind of binary.
It's like, well, that's just what it is, and we'll kind of pretend that that's who we are and we actually know that's not what we're doing. Or we can be really critical of it as being hypocritical. What I've learned is that that concept was aspirational, and it's incumbent upon us to do what Langston Hughes said, which is America has to be the land that has never yet been yet must be in order for America to be [00:29:00] the thing it said that it wanted to be.
It requires us to rise up to be that thing, right? So, so take all these pretty words aside. Just, let's just deal with that. Now, if we're dealing with that, we wanna live in a world, and I hear this a lot where people say, Hey, you know, if you're not invited to the table, you gotta build your own table. And I agree with that.
But the table that we're building is, is the table that should have been built in the first place that everybody has a seat. I'm not interested in creating a black table simply because we weren't really included in the the mainstream table. What I'm interested in is, is, is architecting the table that everybody can sit at and participate in what we're seen as equals.
But in order to be seen and respected as equals, you have to be bringing something of value. And that's where the owner mentality comes from because that when we show up to the table, we're showing up as owners and, and now we're respected as such, and there's something we can bring to the table. [00:30:00] And that we want to build with other people to be able to create the society, the culture, the world that one we want to live in.
But quite frankly, more importantly, once you get over 50, you're really thinking about what's the world I wanna leave for my kids and my grandkids? And that's the phase of life that I'm actually in. Right? And almost 52, I'm already in legacy. And so that, that's really how I think about it. Is that difference that maybe this is the time, especially since there's so much pushback against DEI and these different things, maybe we need to rethink this dynamic.
And maybe now is the time to actually have a different type of language that's not an aversive kind of language, we're just avoiding the issue, but is an aspirational kind of language, which invites people in, not just to the conversation, but invites them into the process of architecting and building the society that we wanna live in.
Christopher Gergen: So let me build on that one. 'cause I, uh, I think this is such a great and, uh, and, [00:31:00] and important arc. You talk about table making. I would also, you know, suggest it's market making. Uh, you talk about, hey, vision, you know, four years ago you've got data to be able to demonstrate. And by being able create that clear demonstration of value and being able to put a clear value proposition on the table, you're able to market make on, on both sides of this one is that you're able to basically create greater awareness on the supply of great ideas that are looking for capital, right?
So, so entrepreneurs can say, I see a path, and it gives them that much more confidence to be able to go after this in. It also creates market making on the demand side because you have, uh, a growing class of investors, and again, Robert's one of those who has made a fair amount of money on the fixed asset side, had never really thought about how they could deploy their [00:32:00] capital in a meaningful way to get good financial returns for themselves, but do it in a way that was actually making a meaningful impact in terms of a societal shift of wealth and ownership.
So that market making is super interesting, and you alluded to this earlier in the fact that, you know, you were an early pioneer on black focused venture capital. It's starting to get some momentum. So, uh, and the goal is a, you know, 10, 15, 20 years, hence. The market's gonna be made and there're gonna be a significant shift of where the wealth is going on many fronts.
So walk us through that. Give us, keep, keep going on that arc of this idea of like, we clear on the ownership side of that you're starting to create this important market. Uh, yet, and you mentioned this earlier, we're still not quite seeing the kind of capital flow to black entrepreneurs that, uh, we need to, it's been relatively flat over the last several years.
Where's it [00:33:00] going? How do we, how do we continue to see progress and, and really have a breakout inflection point in this process?
Kwame Anku: Yes. So really important. You know, I, I think, you know, the media is an easy target for a lot of people, but oftentimes when people kind of make commentaries around the media, the media's able to say, well, everyone just blames on the media and not have any accountability.
How's that connected? Because the media has a tendency of, of focusing on sensational and somewhat salacious at times, headlines. And they love to keep putting out this idea less than 1% of venture capital and hand in the hands of black people. The dangerous one. A few years ago, the average amount of capital raised by a black woman, uh, is $30,000.
Black women get 0.0006% of entry. These are dangerous, dangerous, dangerous numbers, which are all designed to create this sensational shock effect. Now, let's look at this. In [00:34:00] 2016, there was 12 black women who had ever raised a million dollars as entrepreneurs. 12. Two years later it was over a hundred. Okay, now let's move out of just raising capital.
You notice, Christopher, the headline, you never see how much money did black venture capitalists deploy to black people? I. Now, whatever the percentage is in mainstream, and it can be argued, but let's say it's 1 5, 7 half. Ask black Star fund, what percentage of capital went to black founders?
Johnathan Holifield: What percentage of capital
Kwame Anku: went to black founders?
Uh, a hundred percent.
Johnathan Holifield: There you go.
Kwame Anku: We gotta deal with gender disparity. Well, what percentage of, uh, founders did you invest in that are women? Kwame? Oh, 50%. Well, what percentage of capital actually went to them? Maybe the number of of women, but what percentage of capital? Oh, over 50%. Over 50%, [00:35:00] right. You see what I mean?
So that's how you solve this problem. Now, over time, so if we started focusing, and this is important too because there's something very disingenuous about the way that we kind of operate as investors, where we know how things actually work, and then we pretend like we don't know what we're talking about this stuff.
And lemme lemme be clear what I mean, signaling is what investment world is based on. When you put out into the world, black women receive 0.006% of all of the investment money That's signaling you don't wanna invest in black women. Why? Because nobody's investing in them. And then everyone keeps saying that.
And then there's an aversion to that. If you say gold is a thing to invest in, crypto's a thing to invest in, uh, bonds are the things to invest in. Everybody's investing in this particular AI and everybody does it. So what happens when you say, how much capital did black fund managers deploy in 20 [00:36:00] 20, 21 and 20 22, 20 23, what percentage gains are black entrepreneurs producing for their investors?
So I'll give you an example. We have a, a company that we are, the first investor in that company is a high quality, premium athleisure brand called Actively black, taken over the planet right now. Partnerships with Marvel, Disney, Wakanda Forever, the Muhammad Ali Estate, Alan Iversson, they just, tomorrow they're dropping a, a new collection with the Bob Marley estate.
The sales, their first year was $2 million in revenue. The next year was $5 million in revenue. The third year, which was last year, was $8 million in revenue. Now, Blackstar Fund is up on that investment today, 1800%. They're gonna raise another round this year, and conservatively we'll be at about [00:37:00] 23 to 2400%.
Now, that's, I can give you a list of other companies and other growth that we've had, but this isn't about Black Star Fund. My question was what are the kind of returns, what's the, what's the number of cap? What's the total amount of capital that was deployed by fund managers of color? How are those companies performing and outperforming the benchmark?
And let's just say at the top echelon, what kind of percentages returns are we showing now that it's unrealized, we get that. But the path to real, the out, you know, outsized realizations is steady, unrealized, gain our growth. So if, if that was the question, and that's what we were focusing on, what we would find is Mac Ventures, Harlem Capital, Blackstar Fund, uh, uh, jumpstart Ventures, uh, the, the list goes on and on and on and on.
You would be hearing story after story after [00:38:00] story of 200, 305 per hundred percent, a thousand percent plus unrealized gains, companies that were, that are doubling revenue. I'll give you another example. Uh, partake cookies. Healthy allergy friendly company that we've invested in. Now, when I had met that founder, Denise Woodard, remarkable extraordinary entrepreneur, she was literally selling cookies out of her car.
And in 2017, the year I met her, she did $78,000 in revenue. Last year her company did $16 million in revenue. She's in 14,000 stores. She's on first class of American Airlines, domestic and International. Jay-Z has invested four times in this company. You see what I mean? So. A lot of people are not familiar with that story.
They may be familiar with the company, but they're not familiar with the success story that's there. And that's not just, again, Blackstar Fund. She's raised $25 million in investment [00:39:00] capital, which means all of those investors have success stories. So if you change the story around what percentage of venture capital is landing in the hands of black fund managers or, or black founders, like, forget all that.
That's not important. But that what's important is what are we doing with the capital that we have and how is it not performing? How is it outperforming? Then it forces you to say, well, how is that and why is that? And once you understand how and why, then you can skill it. You can, you can duplicate it.
And that's to, to, to the name of the show. That's, it's right. That's how you move the needle, which is my exact follow up. This rocket science. It's not rocket science. We do it every day in the normal markets. And then we we're scratching our heads trying to pretend like, we don't know how this thing works.
This is how it works.
Johnathan Holifield: It's how it works. Well, well look, let's continue down that path. These are, I hope this is not [00:40:00] offensive, but these are episodic. How do we. Is there an opportunity that they're more predictably systemic? Not everyone, but if we were just matching others in the market, and I'm talking particularly black founders in this particular example, and getting that real bottom line that ignores to the benefit of communities and increasing wealth and having that great multiplied impact as well, how does that come together?
Where do you see that going?
Kwame Anku: So look, I think it's, it's it's, you can't separate the two, right? You can't separate the two. People like to talk about the PayPal Mafia almost romantically, but not analyze that from just a business standpoint. It's the same thing. Don't talk about Elon today. Don't talk about Reid Hoffman today.
Talk about that band of 20 something knuckleheads back in the [00:41:00] nineties. That built PayPal and were really on the dawn of transformative e-commerce using the internet. Okay, this is the same thing. I mentioned a Denise word. Well, what happens when Denise has an exit, and I'm making this up, but let's just say she hadn't exit in two years and she exited with a $600 million exit.
Now without putting her business on the street, she would walk away that day with a really significant check. Now, to a person, every founder I've invested in and sat down and said, when when you get your exit, what are you gonna do? And they all say the same thing, I'm gonna start investing in founders. So the reality is, is that this we have to look at because this is the beauty of exponential growth.
Right. When you have people like Denise Woodard who created Partake, when you have people like Lanny Smith who created Actively Black Neville Boston, who created a Reviver digital license plate company, Mary Spiel, the rocket scientist who's created a Metaverse blockchain company that we've invested in, when they [00:42:00] all have net worths of over a hundred million dollars, personally, none of them are interested in going and buying an island and checking out.
They're all to a person interested in starting to fund an investment institution. So imagine if Denise decided she was gonna start a fund. How hard do you think it would be for her to raise $250 million institutionally when she shows up to Morgan Stanley or Goldman Sachs and the rest of these folks and she's the anchor investor with a $50 million check?
We all know the answer to that question. So what we're saying is, is that we all Black Star and all these different funds, if what we deliver to the world, when just if our work, if what we deliver to the world. 50 black entrepreneurs who had successful exits, who have the personal wherewithal, financial wherewithal to be the seed investors of institutional investment firms.
And each one can put 25 to $50 million as the anchor and then quickly raise 250 to $500 [00:43:00] million. That's a hundred funds that are managing 250 to $500 million that are headed by entrepreneurs who understand how to do this right and do it well and create success. Now, again, if that vision is 10 years from now, if that's 10 years from now, let's call it twenty, thirty five, ten years ago, none of this existed.
And to bring it full circle, since we just had the Super Bowl in Las Vegas, this is literally like the story of Las Vegas. You've got a desert and there's nobody there. And in a few short years, you have a, a, a, a city, a business which is generating millions and millions and millions and millions of dollars of revenue.
The difference being two things. One, our timeframes are condensed because it's not gonna take 60 years to create that. It's gonna take 20. And what's also different is that that business model [00:44:00] is not fundamentally designed to transform people's lives. And Jonathan, to your point, how does this hit community?
How does this create trans transformation? Because people like Lanny Smith who created Actively Black and the founders I shared with you, they're all community minded and focused from the beginning. Yeah, right. It's in the DNA and it's not giving back. It's actually built into the companies today where they're building and investing in communities and helping to uplift and create opportunities for folks in the community right now.
They didn't wait until they were making a hundred million dollars and then, and, and donate. They did it. Literally from day one. And as they become more and more successful, they're able to do more and more of that.
Christopher Gergen: You know, it's interesting. It's a lot like one of the things we've been talking about is this, how do you create this flywheel of impact, right?
And what you've been talking about is basically building a flywheel on the capital side, right? So you get the exits, you then put money into a fund, you then deploy more capital, you're able to get more wins, you're able to get more people excited [00:45:00] about that. You amplify that impact and you're able to get that flywheel going.
And then on to Jonathan's point, on the systemic side of things, uh, it feels very much that we need to be orienting around the flywheel of talent as well, so that we're actually creating the pipeline of entrepreneurs who are taking big swings, believe in ownership, and have the mindset and skillsets to be able to really create scalable ventures and scalable enterprises.
I'm curious about your take on sort of as more capital flows, you know, are we gonna be able to keep up on the, the talent side of things?
Kwame Anku: Yeah, so really important. And look, at the end of the day, I'm honest with my investors at, at the initial meetings and I said, look, fundamentally, I am not an investment banker.
I'm a talent scout, right? My gifting and superpower is I'm able to identify the talent quickly. [00:46:00] That's what I'm really good at. And to be fair and honest, which is what's important in these conversations, we, we are going to have a shift within five years around the talent, not necessarily the pipeline, but because the dynamic that existed 10 years ago will no longer exist, meaning that you're gonna have to start having a, a much wider funnel at the top.
Uh, it's gonna be a lot more competitive, but my argument would be you'll also just have more people who are, who are getting in the game, right? Because at the end of the day, this is another part of it too, Christopher, that we're just not honest about in these conversations. I don't have the number, but you guys don't understand what I mean when I say this.
When you look at college graduates and you go, what percentage of white undergraduate students choose a career in finance, just finance? And then you say the same thing in African American, you have a major difference there. Now that's an important, because that's not a [00:47:00] disparity. Now a standpoint of a systemic thing, that's a difference in choice.
What are you choosing to major in? What's your career path that you're choosing? So at the end of the day, why do people invest in funds and where, where's the comfort level? What are we, what are we managing? We're managing risk. We're managing risk. So when you're looking at an investment team and you're seeing folks with a pedigree and people who have 5, 10, 15 years and have investment banking, they've managed tens of millions, hundreds of millions of dollars, they, there's a usual suspects that they've worked with that, you know, all of that is mitigating risk.
So historically, when you have a population group like African Americans that historically hasn't gone into finance, and then in finance, you're talking about investment banking, and in our case, you're talking investment banking, you're talking about venture. You just haven't had the numbers of people getting into the game.
Now this is where the new generation comes in. Hundreds of thousands [00:48:00] of people soon to be millions, but hundreds of thousands of people through social media are witnessing the stories of the Kwame cos, the Koon Cos my brother, who's created incredible real, real estate development and investing in Ghana.
They're following people like the founders I shared with you, Alanni Smith, uh, a Pinky Cole who we've not invested in, who created an incredible, uh, food company. Uh, it was just valued at a hundred million dollars with a $25 million investment from Shake Shack. They're following these people and they're being inspired by these folks.
These folks are literally writing, getting book deals now too, and they're doing book tours and they're doing Netflix shows. And so a whole generation of young people are starting to see an option that they never saw before in a way that's very different. So if you're watching a 90 minute Netflix show on an African American entrepreneur from the south who got raised money and did all these different things, and you saw the Ups Downs, highs, lows, and said, I want to do what she's doing, I've got a great idea and I'm inspired to do [00:49:00] that.
And again, give that five, 10 years and now you've got tens of thousands of people who historically would not have even gotten on that playing field, who not only are inspired to get on the playing field, but actually have hundreds of us. Who are doing podcasts, who are doing Netflix shows, who are at conferences, doing keynotes that they're listening to, that they're learning from, that they're being mentored by, um, they're being inspired by, and then they're choosing, not are they choosing to go into this field, but they're going in the field infinitely better equipped than we were because they had all of us to listen to and talk to and learn from.
So my my argument is, look, we've done an extraordinary job and I'm not, I don't apologize for that. You something bracket those is when you can't back it up. We've done an extraordinary job. I'm saying our generation of pioneers in this space, we had almost no one, you know what I'm saying? We didn't have help.
I'm saying we didn't almost had no one to look to as a model. Now, if [00:50:00] we could come into this space in 20 15, 20 16 where it didn't exist and we didn't have models and we were able to do what we did in less than 10 years, can you imagine what this generation of 30 somethings is gonna be able to do? Not only with us as examples, but us also having the financial wherewithal to actually really support them.
How much could I help you if I had only raised a couple million dollars five years ago? Right. We're raising a hundred million dollars right now, so we can do a lot more
Christopher Gergen: Kwame. Before we leave, I wanna come back to, uh, a model that we've talked about before and, uh, I just wanna make sure we don't lose before we wrap up this conversation is also thinking about new ways of investing and specifically around the venture equity model and recognizing the fact that there is a transition of wealth, transition of assets, and there's an opportunity potentially to come in and flip those assets into next generation ownership through a new way of [00:51:00] capital deployment.
Uh, and I, I would love if you, uh, willing to share just a couple of minutes on your perspective on that.
Kwame Anku: Yeah, I'd love to. So thank you for asking me about that. Um, at two levels, really simple. Uh, and I'm glad you brought this up as the last piece because it's one thing to talk about transforming venture capital, private equity.
It's another thing to talk about the new models and the new models is quite frankly, is where the real excitement and transformation actually is. So you mentioned venture equity. This is a concept that we have really started to pioneer again, and I, I always love to give credit where creditors due because I actually didn't come up with that name, but I described the dynamic.
So I'm having a conversation with a friend of mine and we're talking about the limitations of vc, right? Things like 70% attrition and what happens when the companies are struggling and there's not a lot of help for them, and they get written off. And we started realizing, you know, there's something that private equity is really good at when it comes to distressed assets.
It's really good at turning those companies around. And private equity [00:52:00] typically doesn't even look at venture. And venture doesn't typically look at private equity. So I started playing with this idea of like, what if you had companies that are maybe struggling in the venture portfolio that you took more of a PE approach in terms of restructuring and recapitalizing.
So instead of writing them off because they're not performing down to zero and losing everybody's money and the ip, and quite frankly the years of work that you spent with those folks, what if you had a different model where you were, you were looking to restructure them like you would with private equity?
So I talking with a friend of my name Shilpi, and we were in Aspen. Um, I'm a fellow with the Aspen Institute, Aspen Ascend, and I was explaining this, I conversation to her and she was like, so you're taking the best in your mind of venture capital and private equity. I said, yeah. And she said, you should call it bench equity.
And I said, that's what I'm gonna call it. So that's what we're developing one of our funds to be able to do that. I'll give you another great example. You know, we work with an amazing, uh, investor out of the d DC area and Patrice Brickman, and she's created something [00:53:00] called Inspire Access. Stumbling upon is legislation that allows donor-advised funds to invest in venture funds.
And then as long as those gains are reinvested, there's no capital gains tax. So she has literally built a platform where she's able to get donor-advised funds on the philanthropic side, make tax deductible donations to her platform. That platform then invests in funds like ours and a host of other funds.
Ideal scenario, we've got great returns and those returns come back and it's an evergreen model, so it keeps going, which means I can make a 500,000 tax deductible donation one time. And typically when we do that, we're not, there is no return, right? We're doing that to support a particular cause. But now what we're really doing is creating, we're planting a multiplying seed.
And this platform, which is called Inspire Access. Again, new pioneering concept. And her then mission is to get those tax deductible donor-advised [00:54:00] fund donations as LP positions into funds managed by folks of color and women. And then as we're outperforming and those returns are coming in, it's an evergreen model and this is a new model.
Now imagine if that's successful, which I believe that it will be, what's gonna happen 10, 20, 30, 50, 80, a hundred people are gonna say, oh my God, it's a good idea. We should do the same thing. And that becomes a popular thing. And those institutions, unlike a VC fund, which is gonna sunset in seven, eight years, and we get a 20% return or 80% return, or whatever the thing is, this in theory goes on to perpetuity, which means there's more and more and more and more capital.
And when you don't wanna talk about closing the gap. Again, another way to be able to do that. So these are all things that have sprung out in literally the last 36 months. And so we just couldn't be more excited and enthusiastic about what the future holds because we've built a solid foundation. You mentioned it exactly right.
Its a flywheel, and we're benefiting from the power of [00:55:00] compounding and exponential growth.
Johnathan Holifield: My man. Kwame, as we close out, we're gonna lighten it up a little bit.
Kwame Anku: Okay.
Johnathan Holifield: But I have to say, this has been one of the most hopeful conversations I've had in a long time, and I appreciate, uh, what you're contributing and what you are doing.
Uh, here, here, lighter note. Three questions. Okay. One, what are you reading?
Kwame Anku: Mm,
Johnathan Holifield: two all time favorite groups. You only need three. And four or, um, number three, your personal theme song if you have it.
Kwame Anku: Wow.
Johnathan Holifield: Yeah, I know we're going there, man. We are going there.
Kwame Anku: So I'll be honest with you guys, I listen to a lot of interviews and podcasts, more so than sitting down reading books.
And I, I gotta be honest, it's when I'm on the fly, I [00:56:00] travel a lot, uh, I work out, I'm listening to interviews and, you know, again, I wanna learn from people who are doing the things that either I'm, I'm doing or the things that I wanna do. So I wanna share that so that, you know, it's, it's not, it's not the book of the week to be able to give people, but that's, that's the honest answer.
Christopher Gergen: On, on that vein, are you listening to some interesting podcasts or have you had some interesting interviews that you would, uh, wanna share with our audience?
Kwame Anku: Yeah. You know what I do? I mean, it's crazy. What I do is I'll just search a particular topic and then I'll watch an interview. You know, it could be somebody who's doing a one-on-one fireside at like Stanford Business School.
Right. Uh, it could be somebody who's not even a household name that's doing an interview about startup companies. Right. So, I, I don't, I'm not like a junkie where I have a particular thing that I listen to, like kind of top to bottom. Um, but I'm constantly learning and then, um, I'm doing something interesting as of late.
I'll listen to these things while I'm sleeping. I
Christopher Gergen: do not do that.
Kwame Anku: I just started doing it like,
Christopher Gergen: no, I'm, I am curious about that man. Like, [00:57:00] so is it showing up dreams next day? It's absolutely.
Kwame Anku: Oh, absolutely. Oh, absolutely. Absolutely. Because you, when you sleep is when you're resetting your subconscious. Yeah.
Right. I hope that's, you're re your subconscious beast on what you have. Your, uh, your,
no, it should be, there you go. Yeah, man. On the music side, my favorite groups, uh, prince. Obviously, uh, U2 and I just saw them at the sphere in Las Vegas. Uh, and my favorite band actually, of all time is Living Color The Rock. Really? There you go. In New York. Yeah. Wow. That, that's,
Johnathan Holifield: that's one from the eighties.
Kwame Anku: And I've been, I've been friends with them since I was 17. Um, okay. So it's, yeah, so like I'm have like a close personal relationship with them, but that's my favorite band, you know? And I would say probably the personal theme song is, is I'm the [00:58:00] Man from Aloe Black.
Johnathan Holifield: I'm alright with that.
Kwame Anku: Yeah. Yeah. And not that I have to qualify it, but it's not just like an ego thing that's a song of resilience.
Because, you know, so much of what we talked about today was, you know, kind of being at the apex and the pioneer and on the cutting edge and everything else. But like everybody else in the world and in life and in business, I've had, you know, the very low valleys, you know, and I've, I've experienced the loss.
I've experienced, uh, health issues and crises, loss of loved ones, loss of business partners, loss of, you know, everything. And, and been able to come back and to rebuild and to learn from those, those situations and, and those experiences. And so that song to me is like the theme song really for anybody and everybody that's gone through it or it's going through it, that you can do it.
You, you were put here for a reason. There's, there's a purpose of the pain. If you can, um, hold on, have faith, do the work, uh, in the [00:59:00] dark and in the cold when no one's paying attention and no one's watching you, and there's no one's clapping for you, that when your time comes to really be on the world stage and do what you were called to do, you'll actually be ready to do it.
And that's really where I found myself in my life. So I appreciate the, the compliments and just know that anybody who's kind of watching and listening and maybe being inspired or feeling what you felt, Jonathan, hey, this is uplifting and this is hopeful. Yes, this is coming from somebody that that's had to, to overcome, uh, an extraordinary amount of adversity.
Uh, and that's why I am hopeful because I know if I could have gone through things I've gone through and gotten to this place and then be called to be able to be, uh, you know, a, a, a beacon of light and of hope, uh, then, then definitely anybody and everybody can, and at the end of the day, that's why we're here.
We're here to inspire each other. Regardless of our backgrounds do, we're here to affirm one another, to see each other's light and gift. Magnify that, amplify that, support that, and then [01:00:00] collectively use that to make things better.
Johnathan Holifield: My man. Christopher, it's on you to take us home.
Christopher Gergen: Yeah. So Kwame, ask, share, uh, Jonathan's feeling coming out of this with a lot of hope, a lot of love, uh, and a lot of just, um, uh, excitement about what the future holds in store with your leadership and others.
Um, out there. Uh, a good friend, uh, named David Bernstein has this great saying, which is that problems scream while solutions whisper, and I feel. Good dose of solutions that are making a really meaningful difference than moving the needle. So thanks. Thanks for joining us. This has been really great.
Really great.
Kwame Anku: My pleasure.
Christopher Gergen: Thanks guys.
VO: Thanks so much for listening to Moving the Needle. If what you heard resonates with your mission, do something about it. Leaving a rating interview and sharing our show with your network is definitely appreciated. But what we really want is for you to get [01:01:00] involved and find a way to move the needle in your life and your community.
Johnathan Holifield: Moving the Needle is hosted by me, Jonathan Hollifield and Christopher Gerin, editing and production by Earfluence Music from Bart Matthews and cover art from Devin Lewis Designs. We hope each episode introduces you to leading edge change makers informs you about what's possible and inspires you to action.
So let's get out there and do some needle moving.
Johnathan Holifield: On today's show, we talked to Kwame Anku, the founding managing partner and chief investment officer of the Black Star Fund. I met Kwame back in 2016 when we both presented during Tech Jackson, an innovation summit in Jackson, Mississippi. At that time, he was laying the foundation for what became a truly pioneering idea.
Christopher Gergen: Since then, Kwame put that vision into action and launched Black Star Fund in 2021. The Nation's first black LED venture [00:01:00] capital firm that is invested now in 23 black founders, over 50% of whom are women. It's also attracted capital from a growing network of high net worth black individuals like Robert Jones, whom we featured in our previous episode.
Johnathan Holifield: Welcome to Moving the Needle, a podcast where we have conversations with social innovators and problem solvers doing critical work in cities and rural communities to create new pathways to generational wealth. And as we'll hear from Kwame, they are creating the on the ground conditions to transform underestimated human assets into sources of American global competitive advantage.
This is Jonathan Hollifield.
VO: And I'm Christopher Gergen. As your co-host,
Christopher Gergen: we're here to lift up solutions that are giving us hope and can light the way for policy makers, community leaders, philanthropists, private investors, and engaged citizens who care about equity [00:02:00] and economic impact.
Johnathan Holifield: Kwame. Cool. How are you, my man?
Kwame Anku: Excellent, sir. Good to be with you both. Excited to jump into the topic today.
Johnathan Holifield: Very good, very good. Well, Kwame, you have a story and I think it'll be instructive for our audience to learn a little bit about what brought you to where you are today with one of the leading firms investing in entrepreneurs of color, particularly black entrepreneurs.
Sure.
Kwame Anku: Well, I appreciate it. Thank you so much. You know, as you can probably guess from my name, Kwame Anku, that's a Ghanaian name. Uh, and my folks are actually from Ghana. My father was born in Ghana in the early forties. My mother's actually half Ghanaian and half British. And I, I share that with you. It's really twofold.
One, because when you meet Ghanaians, they always talk about their family first. Oh. Uh, but also it helps to shape the perspective that I'm bringing to the table. Even though, you know, myself, my siblings, we were born and raised in the United States and Ohio specifically. Um, you know, we always had a very global [00:03:00] perspective, uh, because our folks were, were immigrants.
And we had also a unique perspective because we were first generation of a dual experience in America. And what I mean by that is that I'm experiencing the world as what we would call a black American, um, because of the way that our society was set up and quite frankly, how the society would view me.
But I don't have the cultural connection to the country as a Black American because my parents are actually not from here. So it gave me always a unique perspective. It was being able to see from being able to look inside the house from outside with that outside kind of immigrant perspective. And it gave me the, the existential understanding very clearly of what was happening inside the house because I was born here.
So when you see the different disparities, and I experienced these different, you know, disparities as a, as a kid growing up, it wasn't just things we were watching on television, it was things I was dealing with. Whether it was unconscious bias or very conscious bias, or different levels of racism or exclusion.
[00:04:00] All those different things were at play. But I can also say that witnessing my parents, starting from very humble beginnings, uh, you're talking about my father in a village with no running water, no electricity. He was in a country that he was 17 years old before the country was independent. So he was basically a colonial subject for the first 17 years of his life.
And my mother, you know, pretty much grew up in a coal miners town in, in South Wales. From the age of two. So to see the two of them be, be able to build a life, literally the American dream in the seventies and eighties, uh, where my father be was a physician and my mother was the business operations manager for that enterprise.
And ultimately, uh, be very successful in business, be very successful as a physician, helping to cure cancer. And then, you know, raise kids that ultimately went to Stanford, one went to Columbia and one went to Cal. You know, so I watched that firsthand. So as difficult and as challenging as it was, as difficult as in challenging as some of the systemic issues and, and, and [00:05:00] structures are and, and, and exist, it's possible greatness is possible.
Transformative lifestyles are possible. And I witnessed that as a kid and it really shaped a lot of what I do, uh, as an investor in, in the world of venture capital.
Christopher Gergen: So let's build on that. So obviously modeled early on in terms of your parents and something that you. In your own life in terms of being able to continue to, to strive for excellence.
And I'm curious when you, in your own journey, started to really think about how you could pay it forward, get engaged in really fostering the potential, love the entrepreneurs around you, recognizing the fact, to your point, anything's possible. And how do you create the conditions by which excellence is realized?
And when did that start to sort of percolate in terms of your own journey, uh, [00:06:00] as a, as a leader?
Kwame Anku: Sure, sure. You know, I think probably like all of us, right? Your childhood experiences has shaped so much of how you see the world. And I remember, you know, as a kid, you know, it was, it was all the subtleties. So as a young kid, you're starting to realize, wow, there's a way in which people kind of treat me a little bit different, and I'm not quite sure why that is.
And then you start putting two and two together that there was a perception, and granted, you have to put this in perspective, right? When I was five years old, it was 1977, right? But kids are very perceptive. I understood that there was a way that people talk to me and sometimes our family differently. I remember when we would go to restaurants and they would always try to seat us in the back or near the bathroom, and my mom would always get really mad, and as a kid I couldn't really put it all together.
And you start realizing, oh, this is the bias. This is the set of assumptions that people are putting on you because of how you look. And then you start realizing it's not really just you. It's a whole group of [00:07:00] who you're associated with. And you understand fundamentally that that's wrong. Now maybe there's an emotional experience and you feel sad or you feel bad, but even as a kid, I could still separate that intellectually and go, this isn't right.
Because there's great people who are being seen as less than and, and then you start, as you get older, you realize it's not that they're being seen as less than, it's they're not even being seen at all. And then you start, as you get become a teenager, then you start to get a little mad. And then you start realizing, well, you could just be mad or you could figure out what role are you gonna play?
How are you gonna make things better? How are you gonna change this? And as most young people, you're very idealistic. And I was really into music and film and so my, you know, my uh, kind of inspirations were like Spike Lee and, you know, conscious rap artists. So thinking how do we use music and how do we use media to transform consciousness and make the world better?
And we also came up in a time where we watched artists change pretty [00:08:00] much single handedly apartheid in South Africa. Bring in the consciousness bands like U2 and bands like Public Enemy and all these different folks who were raised in the consciousness of a generation. And so I got really swept up in that as a young person initially.
That's what I really wanted to do. As things progressed, I was fortunate enough to go to Stanford and undergrad and part of the, kind of the digital media revolution. And really just a few years before we saw the beginning of the internet transform the world. You know, I started realizing it wasn't just about making music and films that would help.
Raise the consciousness. It was about owning those institutions. It's one thing to make a film, it's another thing to be Warner Brothers. It's one thing to make a song, it's another thing to be Sony music. It's one thing to make a video, it's another thing at the time to be MTV. So I started becoming very interested in the business part of the media and then fast forward what eclipsed that really was the [00:09:00] internet.
And so then when you put all those pieces together, I was really fortunate to have an opportunity to work with my, uh, favorite artist of all time, the legendary rockstar Prince. And I got to work with him at the later stage of his life, few years before we lost him. And you know, that's where it all came together for me, where it was like media, internet, equity, ownership.
And the path would be venture capital. And it literally came as, as Prince asked this question, kind of hypothetically, but also in a very challenging way, just asking, where are the black Mark Zuckerbergs? And what are you guys doing? Your generation, what are you all doing to make those folks a reality?
And when I thought about it, I said, well, and I'm a simple guy. You know, I, when I was at Stanford, you know, Reid Hoffman was a contemporary man, Peter Thiel, who wrote the first angel check that Facebook was in law school when I was an undergrad, [00:10:00] Jerry Yang, who created Yahoo, was a couple years ahead of me in school.
So I thought about it and I realized, you know, all of these transformative companies, including Facebook, all started with a check between a hundred thousand and $500,000. Now, that doesn't mean that's the magic formula to create a multi-billion dollar unicorn, but what it does mean is that's the seed. So if you just, if you're looking for the simple answer to Prince's question.
Where the black Mark Zuckerberg's, the extension of that is, well, how are they created? And if your answer was the answer that I basically believed was the case, Hmm. That's about aggregating a few hundred grand and strategically placing them that capital in the hands of extraordinary founders, visionary, extraordinary founders could, creating game, changing planet, changing companies, but not just the capital.
But then supporting them with business development and access to people who can make their vision a reality. I believe that that was the winning formula, and that's what started me on the journey of venture capital, specifically investing in black founders. [00:11:00]
Johnathan Holifield: You know, Kwame, uh, listening to your personal narrative and your journey.
Uh, some common, uh, themes in my own journey and, uh, what resonated was immersion into probably late eighties, early nineties, conscious rap. Um, I'm there 100. I'm a little bit older than you, but I'm there. 100. Well, also interested in, when you describe being born here, but your parents not, and not having the cultural connection, can you dig into that a little bit?
How perhaps was that limiting and perhaps how, perhaps was it freeing as well?
Kwame Anku: Yeah, so I think it was limiting from the standpoint. Sorry, I appreciate the question. Right. It's limiting because at the end of the day, you know, kinship is about connection and, and black folks in the country, there's just always this quick inherent understanding of one [00:12:00] another, uh, because of the kinship connection.
But that kinship connection again, isn't skin color. It's experiential shared experiences. And so when your folks, you know, when you have x generations of, of grandparents and great grandparents, and maybe you're living in California, but there's a common story of a migration from the south. And that common story isn't just migration, but that's escaping Jim Crow in the South if it's a certain type of music connection, even soul food, right?
That connection that binds people. I did not grow up with that. And I didn't have a story of a grandma who was from Mississippi, or a great-grandmother who was, you know, from North Carolina. And so I didn't, I didn't, I didn't feel that connection that way. My connection was experience, right? We are all experiencing this duality together.
So I felt completely connected to that level. So it was a bit limiting because of just not being, being able to fully co identify. Right. And also, and vice versa, right? Could people really co identify with me, who's, you know, having parents who weren't from this [00:13:00] country, uh, a mom with a British accent, a father who wasn't Black American, but was very, very, very Ghana.
So those things, you just kind of sort through and as a kid, like all of us, you, you see those things as maybe deficiencies or impediments, but then as you get older you realize that that was the, those experiences were the things that ended up creating the tools for you. To operate in your gifting, you know?
So I like to say that, you know, adversity is God's chisel to manifest the masterpiece of your destiny. And so that adversity that you're seeing, I can't co identify and I'm feeling somewhat estranged. You know, as you get older you realize, oh my God, it's actually a gift. So now let's flip the other side of your question, right?
It's limiting here, but how is it? How is it helpful? Here's how it was helpful. I experienced that unconscious and conscious bias and sometimes overt racism. But I can tell both of you, at no point in my life journey did I ever believe that. [00:14:00] Like I never felt less than. I never felt like I couldn't do anything and everything I wanted to do.
And I think that's part of the weight of multi-generational kind of trauma, uh, is that a thing is so deeply embedded almost at the cellular level when you've got hundreds of years of oppression. You want things to be better, you willing, you got the energy to fight, but you deep down inside this thing is so heavy on your, on your soul that sometimes it's hard to believe that it actually can be done.
And so what was helpful to me is that, you know, in my own journey is that I didn't actually have that. And plus, as I shared with you, I saw firsthand, I mean, my father comes to this country as a dark skinned African in 1960s, and that becomes one of the country's leading oncologists curing cancer in the eighties and nineties with no internet.
You know what I mean? I, I watched the whole journey. And I don't mean that from like a hor allergist thing and everybody can just pull theirself up by their bootstraps. I don't mean that, what I mean is that. All I needed to see was, it was possible. But in my spirit as a [00:15:00] five-year-old kid, as a 15-year-old kid, as a 25-year-old kid, now as a man is in his fifties, I never thought I couldn't do it.
And so this is where it's so helpful because look, let's go back to VC in 2015, there was not one venture capital fund in the United States investing in black tech entrepreneurs. There wasn't one. And that, and, and that's not even a, a, you know, a, a, a commentary on bro culture in Silicon Valley. That means no black people had even put together five, $10 million to invest in black entrepreneurs, right?
So when we, when we jumped into that, into that foray, we didn't go, well, nobody's done this before. This is gonna be really hard. Maybe we should do something else. We just said, it's important, it needs to be done. We're the first to do it, so be it. And hopefully if we do it right and do it well, we can be a catalyst.
And I certainly don't take responsibility for the massive [00:16:00] transformation that we've seen, but I, I know what role we played considering that we were creating one of the first funds to do this with the Black Angel Tech Fund. Started with some Stanford folks, and then later what I've done with Blackstar Fund.
Uh, and when we see all the amazing funds out there from Backstage Capital to Harlem Capital to Mac Ventures, and the list goes on and on and on, we played a, a, a pivotal role in the history, uh, so that we find ourselves now literally less than 10 years in 2024 with dozens and dozens and dozens of extraordinary funds focusing on folks of color with literally hundreds of millions, in some cases, uh, dollars, assets under management.
If we were all collectively able to do that in 10 years, imagine where we're gonna be in another five.
Christopher Gergen: So I wanna dig into that Kwame, but, but before we do, I actually wanna, I wanna unpack one other thing that you said earlier in the conversation, which I think is really important 'cause it's the mindset shift.
And I think actually it's a bit of a generational mindset shift, which is the idea of ownership, right? You've told this remarkable [00:17:00] story of your parents, uh, in their respective journeys to get to where they were, to be able to model for you, uh, and your siblings like what is possible. But in that case, it often is, is quite vocational and it's, uh, you know, you're getting into a career path.
You are getting into a job that is respected and understood. And so, you know, the, the path to a doctor is understood, uh, and is, and is a path to a certain form of prestige, wealth, success. Entrepreneurial path has, you know, significant risk associated with it, but it is a path, the ownership that you're talking about, and this conversation we had with your friend and mentor Robert in a previous podcast, which is like the really and important transition to understand the power of ownership.
Can you speak a little bit more to that? Aha. You know, and I love the story of Prince and I love the story of being [00:18:00] able to connect on that level to say, how do I empower next generation owners? Because that is a path towards generation, true generational wealth creation.
Kwame Anku: Yeah. So it's, so, it's a powerful, powerful question and thank you for bringing it up.
You know, um, there's an intersection still with my, my parents, right? Because remember, and I love that you made that distinction in terms of generational difference. My father's generation was really the last generation of, of medical physicians, practitioners that were, that were business owners. And so for the most part, folks who are working in the medical field today, it's not, it's not that they're not doing well, but for the most part, they're not in private practice.
They're actually working for a hospital. They're working for an HMO, that type of thing. So as a child, I would go to my dad's office and see my parents working. I would be there after school or, you know, on the weekends. And, you know, my father on the door it said, Vincent Ku MD Incorporated. Now, they never sat us down and talked [00:19:00] about the importance of ownership and generational, this, that, and the third.
But that was the, that was the baseline norm. We were clear. There was, there was two words that my parents never said at the dinner table my entire life, my boss, they never said that. Now, what they did talk about was the employees, what they did talk about was billing. What they did talk about was. I remember going to see where my dad was gonna open a new office and I'd saw my parents sitting down with the architects and the layouts and the plans.
Like I saw all that, right? So I was watching onerous functioning with an onerous mindset. But remember the journey was, you know, I was five. I remember being five years old and sitting on the floor of my dad's office with my mom. He was an electric pencil sharper, and they had cardboard boxes. 'cause my dad couldn't afford a file cabinet.
My mom took a six month leave from her teaching position when she was teaching fashion design to be his office manager. And that [00:20:00] six month leave ended up being 14 years. So I watched them build a business from the ground up where we had a pinto with the foam coming outta the seat when I was five. And within 10 years we were in private school.
You know, so I saw the whole journey, right? So it was, I was witnessing, when we talk about class, it seems somewhat like, uh, uh, like we're talking about cast. But when we think about an owner as a mindset, that's the mindset of freedom. So here's the village boy from Ghana who had an owner mindset. He came from nothing and didn't own anything.
And so we saw that and because I saw that and then I saw the systemic problems, any kind of inequity you want to talk about. And I just fundamentally believed that the solutions would be pe. 'cause look, lemme put it this way, I, I've learned that people who are marginalized, exploited, taken advantage of, in some cases worse.
That happens when you don't have power, [00:21:00] and when you're not an owning group, you don't have power. And so that was actually the driving thing for me because I'm looking at the thing going, how do you have all these disparities? And if you take it even to vc. Where, you know, people like to tout this number all the time, less than 1%, and it's been less than that.
Uh, founders and fund managers that are getting venture capital allocations. That means you're, you're signaling to the market that this is not an owner group and this is not a group that can multi, can make multiples on investments, which is why my career, I never talked about the lack as an investment thesis.
If I were to sit down with you two as allocators potential allocators with my fund, I'm not gonna start with less than 1% of venture capital lands in the hands of African Americans. I'm not gonna start with that. This is what we did. We literally sat down with people and said, oh, um, our analysis has get is we've come to a conclusion that black led [00:22:00] companies represent a new asset class.
And people are like, wait, what? What? Wait, what? I'm like, yeah, because think about the, the traditional venture capital model is, is like this. It's a funnel, right? It says there's a thousand companies at the top. You'll engage a hundred, you'll make 50 offers. You write 10 checks, seven will fail, two will return capital, and one will be a unicorn to make all the money.
Now, if African American founders historically have not been playing in that game for venture capital for like, say, 40 years, what I realized is that the model is actually flipped upside down and we should be able to go, in theory, this was five years ago. In theory, we should be able to go to the top of the, of the apex, find best in class founders who are African American.
Have no competition to get into those deals because obviously no one's paying attention. Yeah. Because they're
Christopher Gergen: under invested in,
Kwame Anku: yeah. Right, right. And you don't have to sort through who the real winners are because that means, in theory, you should be able to deal with people who are MIT rocket scientists and Georgia Tech rocket scientists.
You should be able to deal with best in [00:23:00] class biotech engineers. And that's exactly what happened. And then I said, this group, because of that shared experience for an African American founder and I I, I'll give you one for example, and I talked about Georgia Tech trained, I have, I have a Georgia Tech trained US Air Force veteran rocket scientist, who developed a digital cinema system that bounces the movie signal from a movie theater off of a satellite, uh, excuse me, from from the studio to a satellite to the movie theater who happens to be a Ghanaian woman.
That's the upper echelon. Of entrepreneurs and, and of, of, of creative business people. So you, you, you don't have to sort through a thousand people trying to find some needle in a haystack. You can go straight to the top and you're dealing with the creme de la creme de la creme. And my argument wasn't, they weren't the creme de under the creme of black [00:24:00] entrepreneurs of entrepreneurs.
So what we said is, this is why I love sharing this stuff, Christopher and Jonathan, because before five years ago I was selling an idea in a theory in 2024, I've got the numbers and the results. So what does venture capital do? 70% attrition. We talked about that. Okay. As of today, I have over 80% of my portfolio is still up and running in business.
Over half of the portfolio did over $5 million in revenue last year. Half the portfolio are black women. Over 50% of the capital has gone to black women. See, this isn't about skin color and genetics. We said this population group that has had this particular existential journey of, of life historically has a different mindset, a different shared life experience, a different way of doing business.
And we as [00:25:00] a fund understand that it's both. It's the capital, it's the business development support, and it's the access to decision makers who can help those companies accelerate their growth. That that's the formula. So you may have believed that five years ago, you may not have believed that five years ago, but in 2024, now we're bringing the data.
And the thing that I love about that is it takes us out of the argument why Silicon Valley should support venture capital folks led by black. No, no, no. If you wanna do it, great. If you don't, why? It doesn't matter if you know why, because my LPs are very happy. See when they get their balance sheets and my other friends are in other funds and they're down 20, 30, 40, 50%.
You see what I mean? My healthies are very happy with those quarterly statements and annual statements, and our portfolio companies are thriving. They're hiring, they're growing, they're having, they're making significant transformations in their industries, and that's what we set out to do.
Johnathan Holifield: Kwame [00:26:00] and Christopher, this is an interesting interchange, uh, particularly about the, uh, generational differences, um, and growth.
I'm a big fan of narrative, not because it's empirical, because it's a reflection of what people are thinking about and talking about and what's important in the national narrative. This notion of equity has really taken off in the last, let's say five years or so, but it's a almost exclusively a fairness argument.
And it's from largely younger generations connect to me this notion, and I believe it, equity is ownership. Why is that not a pervasive part of the national discourse, even though the people driving that discourse are younger people?
Kwame Anku: Yeah, so I think there's two things. I think there's two things. Let's deal with the fairness thing first.
I think you, [00:27:00] you have a generation that had a very different upbringing than their parents' generation. Right? And I'm, I'm somewhat guilty of it as a parent, and I'll just, I'll say this quickly to make the point. You know, when I was seven, like most of us, I took a bus, 40 minutes to school, 40 minutes back, I got off that bus, walked by myself, came to the home with a key, opened the door, was in the house for two hours before my parents came home.
That was the norm for us, right? Most of us did not raise our children that way. There was so much that we just kind of gave them and kind of made it so easy that it's that a lot of them live in that narrative around just fairness and was just, this isn't fair. And the thing with that is you're analyzing the system as it is, you're making a declaration about the disparity, and then you're just kind of waiting for someone else to do something about it, to change it.
And you're just upset that it's not equal for me. And I think for us, we've called these the dynamic, a lot of different things. We've tried multiculturalism [00:28:00] and then diversity, and then we've added all these additional things on top of it. You know, equity, inclusion, belonging, all these different things.
But all of this was a reaction to one simple thing. The country wasn't being what it said it was.
Johnathan Holifield: Dr. King would say, be true to what you put on paper.
Kwame Anku: Right, exactly right. So it's the land of the free, it's the home of the brave. We are born with these inalienable rights that all of us are created equal, and one can make it kind of binary.
It's like, well, that's just what it is, and we'll kind of pretend that that's who we are and we actually know that's not what we're doing. Or we can be really critical of it as being hypocritical. What I've learned is that that concept was aspirational, and it's incumbent upon us to do what Langston Hughes said, which is America has to be the land that has never yet been yet must be in order for America to be [00:29:00] the thing it said that it wanted to be.
It requires us to rise up to be that thing, right? So, so take all these pretty words aside. Just, let's just deal with that. Now, if we're dealing with that, we wanna live in a world, and I hear this a lot where people say, Hey, you know, if you're not invited to the table, you gotta build your own table. And I agree with that.
But the table that we're building is, is the table that should have been built in the first place that everybody has a seat. I'm not interested in creating a black table simply because we weren't really included in the the mainstream table. What I'm interested in is, is, is architecting the table that everybody can sit at and participate in what we're seen as equals.
But in order to be seen and respected as equals, you have to be bringing something of value. And that's where the owner mentality comes from because that when we show up to the table, we're showing up as owners and, and now we're respected as such, and there's something we can bring to the table. [00:30:00] And that we want to build with other people to be able to create the society, the culture, the world that one we want to live in.
But quite frankly, more importantly, once you get over 50, you're really thinking about what's the world I wanna leave for my kids and my grandkids? And that's the phase of life that I'm actually in. Right? And almost 52, I'm already in legacy. And so that, that's really how I think about it. Is that difference that maybe this is the time, especially since there's so much pushback against DEI and these different things, maybe we need to rethink this dynamic.
And maybe now is the time to actually have a different type of language that's not an aversive kind of language, we're just avoiding the issue, but is an aspirational kind of language, which invites people in, not just to the conversation, but invites them into the process of architecting and building the society that we wanna live in.
Christopher Gergen: So let me build on that one. 'cause I, uh, I think this is such a great and, uh, and, [00:31:00] and important arc. You talk about table making. I would also, you know, suggest it's market making. Uh, you talk about, hey, vision, you know, four years ago you've got data to be able to demonstrate. And by being able create that clear demonstration of value and being able to put a clear value proposition on the table, you're able to market make on, on both sides of this one is that you're able to basically create greater awareness on the supply of great ideas that are looking for capital, right?
So, so entrepreneurs can say, I see a path, and it gives them that much more confidence to be able to go after this in. It also creates market making on the demand side because you have, uh, a growing class of investors, and again, Robert's one of those who has made a fair amount of money on the fixed asset side, had never really thought about how they could deploy their [00:32:00] capital in a meaningful way to get good financial returns for themselves, but do it in a way that was actually making a meaningful impact in terms of a societal shift of wealth and ownership.
So that market making is super interesting, and you alluded to this earlier in the fact that, you know, you were an early pioneer on black focused venture capital. It's starting to get some momentum. So, uh, and the goal is a, you know, 10, 15, 20 years, hence. The market's gonna be made and there're gonna be a significant shift of where the wealth is going on many fronts.
So walk us through that. Give us, keep, keep going on that arc of this idea of like, we clear on the ownership side of that you're starting to create this important market. Uh, yet, and you mentioned this earlier, we're still not quite seeing the kind of capital flow to black entrepreneurs that, uh, we need to, it's been relatively flat over the last several years.
Where's it [00:33:00] going? How do we, how do we continue to see progress and, and really have a breakout inflection point in this process?
Kwame Anku: Yes. So really important. You know, I, I think, you know, the media is an easy target for a lot of people, but oftentimes when people kind of make commentaries around the media, the media's able to say, well, everyone just blames on the media and not have any accountability.
How's that connected? Because the media has a tendency of, of focusing on sensational and somewhat salacious at times, headlines. And they love to keep putting out this idea less than 1% of venture capital and hand in the hands of black people. The dangerous one. A few years ago, the average amount of capital raised by a black woman, uh, is $30,000.
Black women get 0.0006% of entry. These are dangerous, dangerous, dangerous numbers, which are all designed to create this sensational shock effect. Now, let's look at this. In [00:34:00] 2016, there was 12 black women who had ever raised a million dollars as entrepreneurs. 12. Two years later it was over a hundred. Okay, now let's move out of just raising capital.
You notice, Christopher, the headline, you never see how much money did black venture capitalists deploy to black people? I. Now, whatever the percentage is in mainstream, and it can be argued, but let's say it's 1 5, 7 half. Ask black Star fund, what percentage of capital went to black founders?
Johnathan Holifield: What percentage of capital
Kwame Anku: went to black founders?
Uh, a hundred percent.
Johnathan Holifield: There you go.
Kwame Anku: We gotta deal with gender disparity. Well, what percentage of, uh, founders did you invest in that are women? Kwame? Oh, 50%. Well, what percentage of capital actually went to them? Maybe the number of of women, but what percentage of capital? Oh, over 50%. Over 50%, [00:35:00] right. You see what I mean?
So that's how you solve this problem. Now, over time, so if we started focusing, and this is important too because there's something very disingenuous about the way that we kind of operate as investors, where we know how things actually work, and then we pretend like we don't know what we're talking about this stuff.
And lemme lemme be clear what I mean, signaling is what investment world is based on. When you put out into the world, black women receive 0.006% of all of the investment money That's signaling you don't wanna invest in black women. Why? Because nobody's investing in them. And then everyone keeps saying that.
And then there's an aversion to that. If you say gold is a thing to invest in, crypto's a thing to invest in, uh, bonds are the things to invest in. Everybody's investing in this particular AI and everybody does it. So what happens when you say, how much capital did black fund managers deploy in 20 [00:36:00] 20, 21 and 20 22, 20 23, what percentage gains are black entrepreneurs producing for their investors?
So I'll give you an example. We have a, a company that we are, the first investor in that company is a high quality, premium athleisure brand called Actively black, taken over the planet right now. Partnerships with Marvel, Disney, Wakanda Forever, the Muhammad Ali Estate, Alan Iversson, they just, tomorrow they're dropping a, a new collection with the Bob Marley estate.
The sales, their first year was $2 million in revenue. The next year was $5 million in revenue. The third year, which was last year, was $8 million in revenue. Now, Blackstar Fund is up on that investment today, 1800%. They're gonna raise another round this year, and conservatively we'll be at about [00:37:00] 23 to 2400%.
Now, that's, I can give you a list of other companies and other growth that we've had, but this isn't about Black Star Fund. My question was what are the kind of returns, what's the, what's the number of cap? What's the total amount of capital that was deployed by fund managers of color? How are those companies performing and outperforming the benchmark?
And let's just say at the top echelon, what kind of percentages returns are we showing now that it's unrealized, we get that. But the path to real, the out, you know, outsized realizations is steady, unrealized, gain our growth. So if, if that was the question, and that's what we were focusing on, what we would find is Mac Ventures, Harlem Capital, Blackstar Fund, uh, uh, jumpstart Ventures, uh, the, the list goes on and on and on and on.
You would be hearing story after story after [00:38:00] story of 200, 305 per hundred percent, a thousand percent plus unrealized gains, companies that were, that are doubling revenue. I'll give you another example. Uh, partake cookies. Healthy allergy friendly company that we've invested in. Now, when I had met that founder, Denise Woodard, remarkable extraordinary entrepreneur, she was literally selling cookies out of her car.
And in 2017, the year I met her, she did $78,000 in revenue. Last year her company did $16 million in revenue. She's in 14,000 stores. She's on first class of American Airlines, domestic and International. Jay-Z has invested four times in this company. You see what I mean? So. A lot of people are not familiar with that story.
They may be familiar with the company, but they're not familiar with the success story that's there. And that's not just, again, Blackstar Fund. She's raised $25 million in investment [00:39:00] capital, which means all of those investors have success stories. So if you change the story around what percentage of venture capital is landing in the hands of black fund managers or, or black founders, like, forget all that.
That's not important. But that what's important is what are we doing with the capital that we have and how is it not performing? How is it outperforming? Then it forces you to say, well, how is that and why is that? And once you understand how and why, then you can skill it. You can, you can duplicate it.
And that's to, to, to the name of the show. That's, it's right. That's how you move the needle, which is my exact follow up. This rocket science. It's not rocket science. We do it every day in the normal markets. And then we we're scratching our heads trying to pretend like, we don't know how this thing works.
This is how it works.
Johnathan Holifield: It's how it works. Well, well look, let's continue down that path. These are, I hope this is not [00:40:00] offensive, but these are episodic. How do we. Is there an opportunity that they're more predictably systemic? Not everyone, but if we were just matching others in the market, and I'm talking particularly black founders in this particular example, and getting that real bottom line that ignores to the benefit of communities and increasing wealth and having that great multiplied impact as well, how does that come together?
Where do you see that going?
Kwame Anku: So look, I think it's, it's it's, you can't separate the two, right? You can't separate the two. People like to talk about the PayPal Mafia almost romantically, but not analyze that from just a business standpoint. It's the same thing. Don't talk about Elon today. Don't talk about Reid Hoffman today.
Talk about that band of 20 something knuckleheads back in the [00:41:00] nineties. That built PayPal and were really on the dawn of transformative e-commerce using the internet. Okay, this is the same thing. I mentioned a Denise word. Well, what happens when Denise has an exit, and I'm making this up, but let's just say she hadn't exit in two years and she exited with a $600 million exit.
Now without putting her business on the street, she would walk away that day with a really significant check. Now, to a person, every founder I've invested in and sat down and said, when when you get your exit, what are you gonna do? And they all say the same thing, I'm gonna start investing in founders. So the reality is, is that this we have to look at because this is the beauty of exponential growth.
Right. When you have people like Denise Woodard who created Partake, when you have people like Lanny Smith who created Actively Black Neville Boston, who created a Reviver digital license plate company, Mary Spiel, the rocket scientist who's created a Metaverse blockchain company that we've invested in, when they [00:42:00] all have net worths of over a hundred million dollars, personally, none of them are interested in going and buying an island and checking out.
They're all to a person interested in starting to fund an investment institution. So imagine if Denise decided she was gonna start a fund. How hard do you think it would be for her to raise $250 million institutionally when she shows up to Morgan Stanley or Goldman Sachs and the rest of these folks and she's the anchor investor with a $50 million check?
We all know the answer to that question. So what we're saying is, is that we all Black Star and all these different funds, if what we deliver to the world, when just if our work, if what we deliver to the world. 50 black entrepreneurs who had successful exits, who have the personal wherewithal, financial wherewithal to be the seed investors of institutional investment firms.
And each one can put 25 to $50 million as the anchor and then quickly raise 250 to $500 [00:43:00] million. That's a hundred funds that are managing 250 to $500 million that are headed by entrepreneurs who understand how to do this right and do it well and create success. Now, again, if that vision is 10 years from now, if that's 10 years from now, let's call it twenty, thirty five, ten years ago, none of this existed.
And to bring it full circle, since we just had the Super Bowl in Las Vegas, this is literally like the story of Las Vegas. You've got a desert and there's nobody there. And in a few short years, you have a, a, a, a city, a business which is generating millions and millions and millions and millions of dollars of revenue.
The difference being two things. One, our timeframes are condensed because it's not gonna take 60 years to create that. It's gonna take 20. And what's also different is that that business model [00:44:00] is not fundamentally designed to transform people's lives. And Jonathan, to your point, how does this hit community?
How does this create trans transformation? Because people like Lanny Smith who created Actively Black and the founders I shared with you, they're all community minded and focused from the beginning. Yeah, right. It's in the DNA and it's not giving back. It's actually built into the companies today where they're building and investing in communities and helping to uplift and create opportunities for folks in the community right now.
They didn't wait until they were making a hundred million dollars and then, and, and donate. They did it. Literally from day one. And as they become more and more successful, they're able to do more and more of that.
Christopher Gergen: You know, it's interesting. It's a lot like one of the things we've been talking about is this, how do you create this flywheel of impact, right?
And what you've been talking about is basically building a flywheel on the capital side, right? So you get the exits, you then put money into a fund, you then deploy more capital, you're able to get more wins, you're able to get more people excited [00:45:00] about that. You amplify that impact and you're able to get that flywheel going.
And then on to Jonathan's point, on the systemic side of things, uh, it feels very much that we need to be orienting around the flywheel of talent as well, so that we're actually creating the pipeline of entrepreneurs who are taking big swings, believe in ownership, and have the mindset and skillsets to be able to really create scalable ventures and scalable enterprises.
I'm curious about your take on sort of as more capital flows, you know, are we gonna be able to keep up on the, the talent side of things?
Kwame Anku: Yeah, so really important. And look, at the end of the day, I'm honest with my investors at, at the initial meetings and I said, look, fundamentally, I am not an investment banker.
I'm a talent scout, right? My gifting and superpower is I'm able to identify the talent quickly. [00:46:00] That's what I'm really good at. And to be fair and honest, which is what's important in these conversations, we, we are going to have a shift within five years around the talent, not necessarily the pipeline, but because the dynamic that existed 10 years ago will no longer exist, meaning that you're gonna have to start having a, a much wider funnel at the top.
Uh, it's gonna be a lot more competitive, but my argument would be you'll also just have more people who are, who are getting in the game, right? Because at the end of the day, this is another part of it too, Christopher, that we're just not honest about in these conversations. I don't have the number, but you guys don't understand what I mean when I say this.
When you look at college graduates and you go, what percentage of white undergraduate students choose a career in finance, just finance? And then you say the same thing in African American, you have a major difference there. Now that's an important, because that's not a [00:47:00] disparity. Now a standpoint of a systemic thing, that's a difference in choice.
What are you choosing to major in? What's your career path that you're choosing? So at the end of the day, why do people invest in funds and where, where's the comfort level? What are we, what are we managing? We're managing risk. We're managing risk. So when you're looking at an investment team and you're seeing folks with a pedigree and people who have 5, 10, 15 years and have investment banking, they've managed tens of millions, hundreds of millions of dollars, they, there's a usual suspects that they've worked with that, you know, all of that is mitigating risk.
So historically, when you have a population group like African Americans that historically hasn't gone into finance, and then in finance, you're talking about investment banking, and in our case, you're talking investment banking, you're talking about venture. You just haven't had the numbers of people getting into the game.
Now this is where the new generation comes in. Hundreds of thousands [00:48:00] of people soon to be millions, but hundreds of thousands of people through social media are witnessing the stories of the Kwame cos, the Koon Cos my brother, who's created incredible real, real estate development and investing in Ghana.
They're following people like the founders I shared with you, Alanni Smith, uh, a Pinky Cole who we've not invested in, who created an incredible, uh, food company. Uh, it was just valued at a hundred million dollars with a $25 million investment from Shake Shack. They're following these people and they're being inspired by these folks.
These folks are literally writing, getting book deals now too, and they're doing book tours and they're doing Netflix shows. And so a whole generation of young people are starting to see an option that they never saw before in a way that's very different. So if you're watching a 90 minute Netflix show on an African American entrepreneur from the south who got raised money and did all these different things, and you saw the Ups Downs, highs, lows, and said, I want to do what she's doing, I've got a great idea and I'm inspired to do [00:49:00] that.
And again, give that five, 10 years and now you've got tens of thousands of people who historically would not have even gotten on that playing field, who not only are inspired to get on the playing field, but actually have hundreds of us. Who are doing podcasts, who are doing Netflix shows, who are at conferences, doing keynotes that they're listening to, that they're learning from, that they're being mentored by, um, they're being inspired by, and then they're choosing, not are they choosing to go into this field, but they're going in the field infinitely better equipped than we were because they had all of us to listen to and talk to and learn from.
So my my argument is, look, we've done an extraordinary job and I'm not, I don't apologize for that. You something bracket those is when you can't back it up. We've done an extraordinary job. I'm saying our generation of pioneers in this space, we had almost no one, you know what I'm saying? We didn't have help.
I'm saying we didn't almost had no one to look to as a model. Now, if [00:50:00] we could come into this space in 20 15, 20 16 where it didn't exist and we didn't have models and we were able to do what we did in less than 10 years, can you imagine what this generation of 30 somethings is gonna be able to do? Not only with us as examples, but us also having the financial wherewithal to actually really support them.
How much could I help you if I had only raised a couple million dollars five years ago? Right. We're raising a hundred million dollars right now, so we can do a lot more
Christopher Gergen: Kwame. Before we leave, I wanna come back to, uh, a model that we've talked about before and, uh, I just wanna make sure we don't lose before we wrap up this conversation is also thinking about new ways of investing and specifically around the venture equity model and recognizing the fact that there is a transition of wealth, transition of assets, and there's an opportunity potentially to come in and flip those assets into next generation ownership through a new way of [00:51:00] capital deployment.
Uh, and I, I would love if you, uh, willing to share just a couple of minutes on your perspective on that.
Kwame Anku: Yeah, I'd love to. So thank you for asking me about that. Um, at two levels, really simple. Uh, and I'm glad you brought this up as the last piece because it's one thing to talk about transforming venture capital, private equity.
It's another thing to talk about the new models and the new models is quite frankly, is where the real excitement and transformation actually is. So you mentioned venture equity. This is a concept that we have really started to pioneer again, and I, I always love to give credit where creditors due because I actually didn't come up with that name, but I described the dynamic.
So I'm having a conversation with a friend of mine and we're talking about the limitations of vc, right? Things like 70% attrition and what happens when the companies are struggling and there's not a lot of help for them, and they get written off. And we started realizing, you know, there's something that private equity is really good at when it comes to distressed assets.
It's really good at turning those companies around. And private equity [00:52:00] typically doesn't even look at venture. And venture doesn't typically look at private equity. So I started playing with this idea of like, what if you had companies that are maybe struggling in the venture portfolio that you took more of a PE approach in terms of restructuring and recapitalizing.
So instead of writing them off because they're not performing down to zero and losing everybody's money and the ip, and quite frankly the years of work that you spent with those folks, what if you had a different model where you were, you were looking to restructure them like you would with private equity?
So I talking with a friend of my name Shilpi, and we were in Aspen. Um, I'm a fellow with the Aspen Institute, Aspen Ascend, and I was explaining this, I conversation to her and she was like, so you're taking the best in your mind of venture capital and private equity. I said, yeah. And she said, you should call it bench equity.
And I said, that's what I'm gonna call it. So that's what we're developing one of our funds to be able to do that. I'll give you another great example. You know, we work with an amazing, uh, investor out of the d DC area and Patrice Brickman, and she's created something [00:53:00] called Inspire Access. Stumbling upon is legislation that allows donor-advised funds to invest in venture funds.
And then as long as those gains are reinvested, there's no capital gains tax. So she has literally built a platform where she's able to get donor-advised funds on the philanthropic side, make tax deductible donations to her platform. That platform then invests in funds like ours and a host of other funds.
Ideal scenario, we've got great returns and those returns come back and it's an evergreen model, so it keeps going, which means I can make a 500,000 tax deductible donation one time. And typically when we do that, we're not, there is no return, right? We're doing that to support a particular cause. But now what we're really doing is creating, we're planting a multiplying seed.
And this platform, which is called Inspire Access. Again, new pioneering concept. And her then mission is to get those tax deductible donor-advised [00:54:00] fund donations as LP positions into funds managed by folks of color and women. And then as we're outperforming and those returns are coming in, it's an evergreen model and this is a new model.
Now imagine if that's successful, which I believe that it will be, what's gonna happen 10, 20, 30, 50, 80, a hundred people are gonna say, oh my God, it's a good idea. We should do the same thing. And that becomes a popular thing. And those institutions, unlike a VC fund, which is gonna sunset in seven, eight years, and we get a 20% return or 80% return, or whatever the thing is, this in theory goes on to perpetuity, which means there's more and more and more and more capital.
And when you don't wanna talk about closing the gap. Again, another way to be able to do that. So these are all things that have sprung out in literally the last 36 months. And so we just couldn't be more excited and enthusiastic about what the future holds because we've built a solid foundation. You mentioned it exactly right.
Its a flywheel, and we're benefiting from the power of [00:55:00] compounding and exponential growth.
Johnathan Holifield: My man. Kwame, as we close out, we're gonna lighten it up a little bit.
Kwame Anku: Okay.
Johnathan Holifield: But I have to say, this has been one of the most hopeful conversations I've had in a long time, and I appreciate, uh, what you're contributing and what you are doing.
Uh, here, here, lighter note. Three questions. Okay. One, what are you reading?
Kwame Anku: Mm,
Johnathan Holifield: two all time favorite groups. You only need three. And four or, um, number three, your personal theme song if you have it.
Kwame Anku: Wow.
Johnathan Holifield: Yeah, I know we're going there, man. We are going there.
Kwame Anku: So I'll be honest with you guys, I listen to a lot of interviews and podcasts, more so than sitting down reading books.
And I, I gotta be honest, it's when I'm on the fly, I [00:56:00] travel a lot, uh, I work out, I'm listening to interviews and, you know, again, I wanna learn from people who are doing the things that either I'm, I'm doing or the things that I wanna do. So I wanna share that so that, you know, it's, it's not, it's not the book of the week to be able to give people, but that's, that's the honest answer.
Christopher Gergen: On, on that vein, are you listening to some interesting podcasts or have you had some interesting interviews that you would, uh, wanna share with our audience?
Kwame Anku: Yeah. You know what I do? I mean, it's crazy. What I do is I'll just search a particular topic and then I'll watch an interview. You know, it could be somebody who's doing a one-on-one fireside at like Stanford Business School.
Right. Uh, it could be somebody who's not even a household name that's doing an interview about startup companies. Right. So, I, I don't, I'm not like a junkie where I have a particular thing that I listen to, like kind of top to bottom. Um, but I'm constantly learning and then, um, I'm doing something interesting as of late.
I'll listen to these things while I'm sleeping. I
Christopher Gergen: do not do that.
Kwame Anku: I just started doing it like,
Christopher Gergen: no, I'm, I am curious about that man. Like, [00:57:00] so is it showing up dreams next day? It's absolutely.
Kwame Anku: Oh, absolutely. Oh, absolutely. Absolutely. Because you, when you sleep is when you're resetting your subconscious. Yeah.
Right. I hope that's, you're re your subconscious beast on what you have. Your, uh, your,
no, it should be, there you go. Yeah, man. On the music side, my favorite groups, uh, prince. Obviously, uh, U2 and I just saw them at the sphere in Las Vegas. Uh, and my favorite band actually, of all time is Living Color The Rock. Really? There you go. In New York. Yeah. Wow. That, that's,
Johnathan Holifield: that's one from the eighties.
Kwame Anku: And I've been, I've been friends with them since I was 17. Um, okay. So it's, yeah, so like I'm have like a close personal relationship with them, but that's my favorite band, you know? And I would say probably the personal theme song is, is I'm the [00:58:00] Man from Aloe Black.
Johnathan Holifield: I'm alright with that.
Kwame Anku: Yeah. Yeah. And not that I have to qualify it, but it's not just like an ego thing that's a song of resilience.
Because, you know, so much of what we talked about today was, you know, kind of being at the apex and the pioneer and on the cutting edge and everything else. But like everybody else in the world and in life and in business, I've had, you know, the very low valleys, you know, and I've, I've experienced the loss.
I've experienced, uh, health issues and crises, loss of loved ones, loss of business partners, loss of, you know, everything. And, and been able to come back and to rebuild and to learn from those, those situations and, and those experiences. And so that song to me is like the theme song really for anybody and everybody that's gone through it or it's going through it, that you can do it.
You, you were put here for a reason. There's, there's a purpose of the pain. If you can, um, hold on, have faith, do the work, uh, in the [00:59:00] dark and in the cold when no one's paying attention and no one's watching you, and there's no one's clapping for you, that when your time comes to really be on the world stage and do what you were called to do, you'll actually be ready to do it.
And that's really where I found myself in my life. So I appreciate the, the compliments and just know that anybody who's kind of watching and listening and maybe being inspired or feeling what you felt, Jonathan, hey, this is uplifting and this is hopeful. Yes, this is coming from somebody that that's had to, to overcome, uh, an extraordinary amount of adversity.
Uh, and that's why I am hopeful because I know if I could have gone through things I've gone through and gotten to this place and then be called to be able to be, uh, you know, a, a, a beacon of light and of hope, uh, then, then definitely anybody and everybody can, and at the end of the day, that's why we're here.
We're here to inspire each other. Regardless of our backgrounds do, we're here to affirm one another, to see each other's light and gift. Magnify that, amplify that, support that, and then [01:00:00] collectively use that to make things better.
Johnathan Holifield: My man. Christopher, it's on you to take us home.
Christopher Gergen: Yeah. So Kwame, ask, share, uh, Jonathan's feeling coming out of this with a lot of hope, a lot of love, uh, and a lot of just, um, uh, excitement about what the future holds in store with your leadership and others.
Um, out there. Uh, a good friend, uh, named David Bernstein has this great saying, which is that problems scream while solutions whisper, and I feel. Good dose of solutions that are making a really meaningful difference than moving the needle. So thanks. Thanks for joining us. This has been really great.
Really great.
Kwame Anku: My pleasure.
Christopher Gergen: Thanks guys.
VO: Thanks so much for listening to Moving the Needle. If what you heard resonates with your mission, do something about it. Leaving a rating interview and sharing our show with your network is definitely appreciated. But what we really want is for you to get [01:01:00] involved and find a way to move the needle in your life and your community.
Johnathan Holifield: Moving the Needle is hosted by me, Jonathan Hollifield and Christopher Gerin, editing and production by Earfluence Music from Bart Matthews and cover art from Devin Lewis Designs. We hope each episode introduces you to leading edge change makers informs you about what's possible and inspires you to action.
So let's get out there and do some needle moving.
