Bringing inclusion to venture capital is not just a question of who’s getting the funding, but also who’s doing the investing.
Nasir Qadree is a venture capitalist who has built a deep, diverse network of founders and funders. After a career in small business and corporate investing — including leading AT&T’s $400 million Social Investment Fund — the former member of Village Capital this year founded downtown D.C.-based Zeal Capital Partners, which will invest in early-stage fintech and future of work companies. Its first fund, aiming for $50 million, is currently in development.
“My goal is to build a best-in-class investment firm focused on bridging our country’s wealth and skills, which we believe turbocharge economic mobility,” he told Technical.ly. “We have market mapped both sectors, and are conducting deep diligence on a number of hot deals seeking investment, and [are] interested in us taking a significant ownership stake.”
Zeal’s “inclusive investing” strategy includes five components: diversity of fund managers themselves; diversity of management teams within funded companies; broad geographic range within the U.S.; companies that focus on wealth-generating fintech and the future of work; and an impact lens.
“It’s incredibly important to recognize the genius in Black people,” Qadree said during his Off the Sidelines podcast interview. “Genius is everywhere, and there is a missing opportunity when we don’t proactively invest in innovation that’s led by Black people. I think that’s the way the structure of private markets, and venture capital more specifically, has been built. It’s been built in a way that has not afforded Black entrepreneurs the ability to have capital and realize their business’ full potential.”
To that first point in Zeal’s investment strategy, though: Inclusivity should apply to those dispersing capital, Qadree believes. In the $69 trillion asset management industry, where firms owned by women and minorities manage only 1.3% of assets, Zeal’s investment and leadership team is more diverse than your average fund’s. Its advisory board includes the likes of Wes Moore, who is co-chair of the newly launched $10 million Black Voices for Black Justice Fund alongside Kerry Washington, and Andre Perry, the noted commentator on race and a David M. Rubenstein fellow at The Brookings Institution.
“I do see investors really leaning into backing more diverse founders — and fund managers as well,” Qadree said, “which I’d argue is an even more critical component of making change, because more diverse fund managers will have a closer network and differentiated sourcing strategy than your traditional investor [to] yield positive impact in providing capital to women and people of color.”
What specific behaviors does he most want to see changed in VC? For one, transparency.
“Too often in the private markets — private equity, venture capital, particularly early-stage investing — entrepreneurs are forced to be incredibly transparent. Way more than the investor,” he said. “And at Zeal, we stress to founders we talk to every day: We want you to conduct diligence on us just as much as we conduct diligence on you, because the truth is, this is a long-term relationship, and so it’s part of building that culture.”
Qadree called Zeal’s culture “entrepreneur friendly,” in that its goal in supporting startups goes beyond ensuring financial return, such as helping them develop an inclusive recruitment strategy to build more diverse teams.
And, amid the ongoing civil rights protests against police violence toward Black Americans, he has hope for increased understanding.
“I think we’re going to see an investment community who will expand their dinner tables, who will really lean into these other markets where Black entrepreneurs are thriving, [including] here in Washington D.C.,” he said. “We need the next AOL in our own backyard.”
Watch his full conversation with Technical.ly Assistant Editor Stephen Babcock here:
P.S. Qadree is a nominee for our 2020 Technical.ly Awards’ Impact Leader of the Year. Check out all the categories and vote for the winners by EOD Monday, Oct. 26:-30-