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Economic justice as a path to healing systemic racism

"The venture capital industry, as well as business in general, has to step up to and confront its role in the institutional racism that continues to perpetuate this injustice," writes Jeff Cherry of Conscious Venture Lab and SHIFT Ventures.

A graffiti mural honoring George Floyd in Minneapolis. (Photo by Unsplash user munshots)

This guest post is a part of Racial Equity Month of Technical.ly's editorial calendar.

This is a guest post by Jeff Cherry, the managing general partner of investment firm SHIFT Ventures and founder of the Conscious Venture Lab, a Baltimore-based accelerator.
We’ve been here one too many times.

We live in a racist society. I don’t say that to accuse anyone of anything. But I think most of us have known this fact since we were old enough to comprehend language. That racism presents itself in many different ways. From jokes about race from “good” people trying to show they’re colorblind, to police officers feeling perfectly fine with killing unarmed black men, on camera, for the world to see, without a hint of empathy or humanity.

Back in 2015, just after the Freddie Gray riots, we moved the Conscious Venture Lab from Howard County into Baltimore city. We did so to help combat economic inequality – a major contributor to that unrest in Baltimore – by creating a more human and inclusive form of capitalism and funding diverse entrepreneurs.

At the time, I believed the riots weren’t so much about the death of Freddie Gray, as they were about the neglect of the Black community in Baltimore — and places like Baltimore — for hundreds of years.

Watching George Floyd murdered the way he was has made me see this story more clearly, more precisely. The foundational racism that makes it acceptable to neglect and, in fact, willingly destroy African American communities, makes the type of policing that killed George Floyd acceptable as well.

Throughout my life and career, I’ve tried to respond to injustice by finding constructive ways to apply capitalism as a tool to address equality and access to opportunity.

The Conscious Venture Lab and SHIFT Ventures is an experiment to create social justice through economic empowerment and transforming the way we think about and practice capitalism. It is clear that economic empowerment is one of the tools we need to engage in the fight to dismantle racism in this country.

In general, that’s not working very well. Here are a few sobering statistics:

  • Businesses founded by black people receive about 1% of all venture capital dollars annually
  • Only 4% of investment professionals in venture capital are African American
  • Of the $70 trillion in assets under management in the US, less than 1% of that is managed by women or people of color
  • According to one study by the Federal Reserve Bank of Cleveland, looking back to 1962 it will take 259 years for the ratio of black to white mean wealth to reach 0.90 (roughly equal)

If we hope to change this narrative, collectively we must do better. The venture capital industry, as well as business in general, has to step up to and confront its role in the institutional racism that continues to perpetuate this injustice. For my white friends out there, who are in the investment business, economic justice is a path forward. We need you to join us on that journey. How? By seeking out Black entrepreneurs and Black fund managers and finding new ways to invest in minority businesses and support communities of color.

And no, I’m not asking you just to invest because these funds or businesses are run by black folk. I’m suggesting you do the research. Lean in just a little, and you will find amazing talent and founders if you want to. Don’t just proclaim your support. Pick up the phone, set up a meeting put us up to fair scrutiny. I can promise you’ll find a wealth of talent that has been ignored, providing opportunities for financial as well as societal impact.

Conscious Venture Lab Director Jeff Cherry speaks at Labs@LightCity.

Conscious Venture Lab Director Jeff Cherry speaks at Labs@LightCity in 2017. (Courtesy photo)

How do I know this can work?

So far, in the Conscious Venture Fund 1, we’ve invested 52% of our capital in female founders and 43% in minority founders. The 29 seed and pre-seed companies we’ve supported are now collectively worth more than $76M, with a projected 2.6 multiple on invested capital (MOIC).

So, it works. But we are just one example. We need more, and there are many more like me out there doing great work.

And, here’s what else I know now: It’s not enough. Having more minority venture capitalists funded and investing in minority entrepreneurs isn’t going to bring George Floyd back, and it won’t stop the next racist police officer or angry white man from killing another unarmed black man for no apparent reason.

We need to do more, because this needs to stop. Police need to stop killing black people in this country. We need to find a way to create more equitable access to housing and education. We need to vote out racist politicians and judges. We need to create new processes for policing. And our system of capitalism needs to provide greater access to opportunity for everyone!

In recent years, I’ve been initiating conversations with faith, public sector and some business leaders, including at The Vatican, US Conference of Catholic Bishops, The Catholic University of America, Loyola University Maryland, The University of Notre Dame, The Center for Policing Equity, The Hult Prize Foundation and The Laudato si Challenge Foundation. 

We’re now looking to add to this group mayors and police chiefs across the country, in order to consider how we create a new, collective and actionable movement to change policing, and frankly to combat the scourge of racism in America. We don’t quite know what it will look like yet, but we all know that something must be done. And if not us, then who? And if not now, then when? I do know it will tap into our strengths of working with exciting founders and helping organizations create lasting and actionable impact.

We all must find a way to make it unacceptable for people of color in this country to be cast aside, left out of the amazing promise that is America. For those charged with protecting us —all of us — they need to be held accountable for their action when they fail to do so. That won’t come from thoughts and prayers. It will only come from sustained action.

The promise of sustained action this time around seems, well, more promising. Cautiously optimistic may be an overstatement, but there are signs that this time, it might be different. and I’m holding onto hope because right now that’s the best I can do.

Companies: Conscious Venture Lab
Series: Racial Equity Month 2020

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