To prepare the upcoming generation of black venture capitalists, Nex Cubed, the venture accelerator that established a $40 million fund targeting founders from historically black colleges and universities (HBCUs), today announced a venture scouting relationship with HBCU.vc, a nonprofit organization.
Students and graduates of HBCUs can apply for fellowships through HBCU.vc, and Nex Cubed has trained over 700 students through its nonprofit foundation.
CEO of Nex Cubed Marlon Evans told TechCrunch, “We decided to team up with HBCU.vc and provide them an opportunity to go beyond their fellowship program to provide their fellows with real-life experiences working with a VC firm, instead of reinventing the wheel and setting up a separate program targeted at HBCUs.”
The COO of HBCU, Chelsea Roberts, expressed her hope that more HBCU alums and students will have access to technology due to this cooperation. “To ensure HBCU talent is on an equal playing field, that means doing so with resources,” she stated, adding that essential stakeholders and actors in the sector must also assist them.
Scout programs are an excellent way for businesses to access talent and potential transactions while assisting prospective investors in developing their track records and contacts. Through this scouting program, graduates and fellows of HBCU.vc will receive mentoring on various topics, including investment memo writing and due diligence. The fellows, according to Nex Cubed, will also get a portion of the fund’s proceeds if a business they helped identify receives funding.
It has long been known that diversifying the investment community will increase the amount of cash available to minority entrepreneurs. Currently, Black entrepreneurs receive fewer than 1% of venture capital investment annually and make up less than 5% of all investors. However, in the greater scheme of finding tech and business expertise, HBCUs are sometimes overlooked despite their long history of nurturing Black brilliance. They were established in the 1800s to provide education to African Americans, as the majority were not allowed to attend the then-existing, predominately white universities.
There are currently over 100 HBCUs, with institutions like Howard University and Clark Atlanta being mentioned as Black Ivy League universities. A quarter of African-American STEM graduates come from HBCUs; these students are primarily from Spelman College, Howard University, and North Carolina A&T State University.
Other companies, Nex Cubed and HBCU.vc, attempt to assist this population segment. Fund-of-funds: The Historical Fund has given $10 million to nine historically black colleges to support their venture capital investments. Additionally, Plexo Capital investor Lo Toney attempted to persuade additional venture capital companies to accept HBCUs as limited partners.
According to Evan, ignoring HBCUs is like ignoring the future of creativity.
He stated, “One of the tenets of our investment thesis is that those with direct experience with some of these issues will be the ones to devise the most creative solutions to deal with them.” “We have a financial obligation to ensure that we are not passing up this excellent pool of talent.”