The Oregon Community Foundation is giving a large, but unspecified, investment to a venture capital fund in Portland that focuses on helping Black-owned businesses grow.
Last week, the Black Founders Matter Fund said that it was going to get a historic investment from OCF. The fund’s press release said that the investment would be the largest one ever given to a Portland-based investment fund.
“The BFM Fund aligns so well with Oregon Community Foundation’s community-led approach,” said Lisa Mensah, President and CEO of Oregon Community Foundation. “Our investment in the BFM Fund brings diverse women to tables where decisions are being made and into leadership positions across Oregon to create transformative change that benefits us all.”
A representative for OCF told Oregon Business that the organization couldn’t say how much money it has given to BFM because “we just don’t talk about amounts like that.”
The news comes a month after Bank of America said it would invest a “sizeable portion” of its $1.25 billion pledge to improve racial equality and economic opportunity.
Himalaya Rao-Potlapally, the managing director of The BFM Fund, says that OCF contacted BFM because of the fund’s success in finding and building brands from BIPOC entrepreneurs.
Some of the companies in the BFM Fund’s portfolio right now are Allyson Felix’s shoe and clothing brand Saysh, Serena Williams’s healthcare startup Hued, and Glow Up Games, an entertainment studio that was started by women.
Rao-Potlapally says that her organization has already set up a pipeline of Black and brown founders from different industries to OCF. These founders come from 14 different industries in Oregon, and each vertical has more than one founder.
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Even though she says the organization is already looking for founders to invest in, any founder from the BIPOC community should feel free to reach out.
Rao-Potlapally says, “Even if we can’t invest, we have a network of other funders we can talk to.”
According to the press release that came with the announcement, the money will also help BFM get access to $83.5 million worth of federal contracts and funding through Oregon’s Small Business Credit Initiative Program.
At the moment, women of color make up the BFM Fund’s leadership team.
Last year, BFM changed its name after founder Marceau Michel was fired. In 2017, Michel started the Black Founders Matter brand, and in 2019, he started the venture fund.
Rao-Potlapally says that even though the fund changed its name recently, it still has the same goal and works the same way.
“Our fund prioritizes Black and innovative businesses. This grant through OCF was to be able to focus specifically on Oregon-based entrepreneurs and focus on the Pacific Northwest because in the Pacific Northwest, and particularly in Oregon, there’s like a huge underrepresentation of black and brown founders in the ecosystem and in the innovation space,” says Rao-Potlapally.
She also says that building the relationship between BFM and OCF took three years of getting to know each other and figuring out how the BFM fund could help OCF reach its goal of investing in a wider range of Oregon business founders.
“The OCF really wanted to help promote entrepreneurship across diverse founders, and they were looking for a vehicle to be able to do that. They realized ‘Hey, we don’t necessarily have to reinvent the wheel. There’s an organization here that’s been on the ground doing this work and building up their careers and building up the firm, and demonstrated a track record of investing,” says Rao-Potlapally.
The amount of venture capital money in the Portland metro area dropped by a lot last year, according to quarterly data from the research firm PitchBook. In the fourth quarter of 2022, only $67.5 million was invested, which is 42% less than the same time in 2021, when $385.4 million was invested.
Rao-Potlapally says that founders from underrepresented backgrounds are often wrongly seen as risky investments and that when venture capital dollars slow down, founders of color usually take the most of the hit. She says that her own experience with the Oregon venture capital system has taught her a lot about how to make it fairer for founders of color.
“There’s not as much money in Oregon as there is in other states for seed and pre-seed level funding for sure, and there’s still an issue around access, because you still have to know someone with wealth and privilege to be able to get a warm intro to get connected to then be able to pitch. Historically, Oregon hasn’t had the most diversity, so we’re still pretty new at this,” says Rao-Potlapally.
“Largely, venture capital is very much an apprenticeship model,” she adds. “If no one looks at you and sees a younger version of themselves, it becomes difficult for you to rise up. I’m lucky in that a lot of people who run venture capital in Oregon took me under their wing and I was able to work across many of the funds in Oregon. I feel grateful for that, but it shouldn’t end with me.”
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