Launched in 2020, the New Community Transformation Fund
(NCTF) is focused on diversity at all levels — both within the organization as well as within the organizations they plan to serve. “Our focus is on ethnic diversity — communities of color specifically,” says Skot Welch, managing partner. “The focus of the Fund is through that lens,” he says.
To that end, the makeup of the Fund’s committee was intentionally diverse. In addition to its ethnic diversity, the committee members bring over 125 years of experience in the venture capital space to the table.
The main goals of the Fund’s leadership were to reach an initial funding level of $10 million, hire a managing director, begin providing investments and start seeing people of color-owned businesses come to the area. Currently at its initial funding goal, the new goal is to reach $25 million in investments over the next year. The Fund is currently reviewing applications and is hoping to make its first investment by year-end.
As they looked to hire, the intent was to secure a person of color to serve as managing director. Additionally, a goal was for this individual to have a strong foundation in the venture capital space because Welch says this person will serve as the organization’s main point of contact and will need to maintain the overall culture of the Fund. Along with Welch, the managing director will work to find applicants to present to the investment committee.
Welcoming new leadership
Officially beginning Nov. 15, Ollie Howie will be the Fund’s first managing director. A Harvard University graduate with venture capital experience as well as startup business knowledge, Howie had most recently been working to invest in people of color-owned businesses through the SoftBank Opportunity Fund
“I’ve had really good hands-on experience being a part of established venture firms, evaluating venture firms from a [limited partner] perspective [and] from investing with a similar mission to building a company to over $50 million in value,” Howie says. “I think what we want to create here is a similar type [of] trajectory for folks that grew up in West Michigan. It doesn’t have to be old white men at the head of the table. I think it should be a diverse selection — it should be all of us, equally represented.”
Excited as he joins the community, Howie, who has been a part of metropolitan areas including New York and Atlanta, feels the area is unique in several ways.
“That’s really something distinct about the area — the history and ability of [non-downtown] areas to have new entrepreneurs. It doesn’t have to be big corporations. It could be a barbershop or restaurant that is patronizing the community and bringing economic development back to the city,” Howie says. “Hopefully, there is more of that.”
Stepping into this role, one of his goals includes finding opportunities to leverage technology for all businesses. “We’re in an age that is more global and hopefully, more accessible to all,” Howie says. Given the rapid shifts to further incorporate technology since the onset of COVID-19, this presents even more potential.
“Obviously in our society, with everybody on Zoom, hopefully, it’s just more room for bigger industries, even in smaller areas that can blossom just from the internet, having remote teams and being able to scale,” he says. He does understand, however, the need for additional considerations.
“It’s a question of access and accessibility,” Howie says. “Hopefully this Fund can bring some of that. We think that technology can be some of the most meritocratic ways to further growth. For those that can spend time on their computer or even contract out … and create technology that can have a ripple effect on the community — not only the local community, but a [broader] community because everybody can reap the benefits.”
Furthering the ripple effect
The ripple effect Howie is looking to create could be wide-reaching. “The ability to impact and have great economic benefits and externalities associated with investments is really top of mind when you think of how to impact people globally. It really starts with [the] hyperlocal community,” he says.
While the Fund is focused on diversity, it is still seeking viable, sustainable investments. “We want to create companies that would reach enormous scale, no matter who the entrepreneur is, and they just happen to be a person of color or a woman,” Howie says.
NCTF will look to engage with businesses throughout the country that are tied to the region. The ideal applicant will have a proof of concept and customers and the business will be scalable. “We come alongside [business owners] to help them to that next step,” Welch says.
To help businesses make it to the next level, one of the roles of the Fund will serve is to provide businesses with on-going support. According to Welch, the initial investments may be minimums, not caps. “The minimum investment for any of our portfolio companies will be between $250 thousand and $500 thousand,” he says. Additionally, there will be opportunities for further “follow-on” funds to continue aiding businesses as they progress.
Howie points out, however, that long-term, the goal is for businesses to be able to grow and thrive independently. “In venture capital, we also look for businesses that can be self-sustaining and one day ... will not necessarily need that continual funding. It’s not a charity or grant. We’re investing to get returns. We think that is sustainable as well.”
NCTF will also seek to help educate and support applicants. While some investment funds or venture capital firms may only provide businesses one shot at funding and little to no application feedback, this is not the approach the Fund will take. Not only will it encourage businesses to reapply if they are not funded the first time, but it will also provide insights. When it comes to communicating decisions and helping people through the process, “we owe it to you,” Welch says.
Regardless of the stage of business or need, Welch encourages businesses not to be discouraged if they hit a roadblock. Since it can be challenging to operate and grow a business, Welch stresses the importance of reaching out for help. When issues arise, Welch says business owners need to speak up and leverage their networks and community. “Find someone that knows the answer or knows an answer,” he says.
Being intentional and taking action
“We’ve seen nationwide positive responses in the venture ecosystem recently, post 2020. People have had heightened awareness about it at least and we hope that continues. A lot of time dollars get devoted and it’s hard to actually deploy those dollars responsibly. So, a lot of solutions have materialized,” Howie says. “We think [the Fund] could be one of the best [solutions] because it not only invests in the company but also into the people the company employs. Beyond that, it provides a good or service to the greater community. We think the ripple effects are tenfold investing in our folks on the ground.”
As it relates to a focus on diversity, equity and inclusion, Welch does not expect these conversations to end anytime soon. "I believe we're in a movement, not a moment,” he says. “These types of things, I believe, are here to stay."
Specifically speaking to people of color, he issues a call-to-action — "Anything you do, do it with excellence. We came from greatness. Let's begin to focus on our assets more and our deficits less. Let's remember who we come from."
For organizations looking to support underrepresented businesses, Welch says the organizations should be intentional and strategic. “Be serious, be bold and make sure that the people you are wanting to support are actually at the table as you are setting strategy to connect with them.”
Howie is optimistic about community involvement with the Fund. “I think that having a community and folks that are invested in the community, great fundraisers and staples of the community like Skot [Welch], Birgit [Klohs] and folks that have gone on to do many things for the community, now turn to venture and have that same enthusiasm and vigor [for] creating wealth within the community … that’s really a great striving point,” he says. He encourages business owners and community members alike to reach out. “Visit our LinkedIn
, our website [or] email me [email protected]
. I would love to have dialogue.”
About Leandra Nisbet: Leandra Nisbet, Owner of Stingray Advisory Group LLC and Co-Owner of Brightwork Marine LLC, has over 15 years of experience in leadership, sales & marketing and graphic design. She helps businesses grow and assists with strategic planning, marketing concept development/implementation, risk management and financial organization. She is actively involved in the community, sitting on several Boards and committees, and has been recognized as one of the 40 Under 40 Business Leaders in Grand Rapids.
Contact Leandra Nisbet by email at [email protected]