Pitching an Investor as a VC Firm | HUSTLE - YouTube

All right, boys.

John Henry: Don't bring your phone out during the meeting, bro.

Pierre-Jacques: Most definitely not. Who would do that?

You would.

Hello. -Morning.

-Hey, guys. -Morning. Henri.

-I'm Ron. -Ron, pleasure to meet you.

John Henry. -John Henry.

-Hi, I'm Jarrid. -Jarrid, nice to meet you guys.

-Nice to meet you. -All right.

Thank you for making the time for us.

Moelis: No, no problem.

Thanks for coming down, uh -- down here.

Well, I mean, let's get started.

-All right.

Harlem Capital, we started three years ago

actually as an angel syndicate in Jarrid's living room,

and so we're investing across asset classes, venture,

small business, and real estate.

Our hypothesis was, there's probably a lack

of funding for diverse founders

because of a lack of diverse investors,

and so our mission became to invest

in 1,000 diverse founders over the next 20 years.

Okay.

And on the next page, when we took a look at that data,

the numbers very clearly validated our hypothesis.

Here you have a very large sample set of about 50,000

collected amongst investors and founders.

In 2017, roughly $84 billion of capital

was invested into venture as an asset class,

and just 2% of that,

just a little north of 2% of that,

made its way to minorities and women.

So when you look on the left here,

this shows the venture capital investors by race.

You can see that 86% of VCs are white,

and so there's a subconscious bias there

to invest also in their white counterparts. Not surprising.

And on the right hand, this bias also exists by gender.

So you can see 91% of investors are male. Right.

Tingle: We're raising a $25 million fund.

We plan to make 30 investments.

We're going to mostly invest in seed-stage companies,

and then we'll also opportunistically do series "A."

Our check size will be anywhere

from $100,000 to $1 million dollars,

and then we're focused on backing disruptive companies

founded by women and diverse entrepreneurs.

We go with if the founders are essentially non-white male,

but we have a particular emphasis on Latinos,

African-American, and women-founded companies.

But what if it is, like, two founders, one of each?

Is that -- If there's a woman or minority...

That would qualify. ...or person of color in the company, it would qualify?

That would qualify. In the founder's class it would qualify?

Sure, yeah. But It usually tends to be the CEO or the main founder.

It has to be one of those. -Okay.

John Henry: There are plenty of savvy founders

growing sizable businesses

and are returning capital to investors.

The impact is really what you're doing as a diversity firm... Yeah.

...investing and creating opportunity for businesses

that are run by diverse founders and CEOs. That's right.

-The business itself... -Doesn't have to --

...doesn't have to have an impact itself.

-Correct. -It could be --

-Correct. -It could be impactful,

but it could be also just a standard business. Okay. John Henry: Correct.

Yeah. We think about doing well and doing good at the same time.

That's terrific. That's good.

Okay. -So moving over to page 19,

we think that we're better at helping companies grow

and get into the next stage rather than getting them off

the ground, so we actually do like

to have companies that have product-market fit.

We think that increases our chances of success.

Do you want to lead, or do you care?

We do want to lead the majority of our seed deals,

and as we think about why we're choosing

$25 million and 30 investments...

It gives you the opportunity to lead.

...that kind of gets to a point where we can lead,

usually charting on average of a $500,000 check.

Some other things we looked at are passion,

vision, and self-awareness with founders.

We also like founders that are coachable

as well as they have a really good sense of their market.

If a founder says, "Hey, there's no competitors,"

it's probably not true.

You're at least disrupting somebody,

so we want you to know who that is.

And coachability is something that you really have to

struggle with sometimes with some founders. Yes. Yes, indeed.

John Henry: Behind this is an appendix that marks our bios

and our fund model, if you'd like to look through it. Okay.

But we'd love to have L+M on

or you as an individual on as a formal investor of ours.

Well, great. Thank you.

This is a great presentation.

-Appreciate it. -Thank you.

You guys did it succinctly and got through a lot.

I have a daughter who just started a company,

so I'm somewhat familiar with some of the issues...

The heart of this?

...of at least women in the business.

Mm-hmm. Sure.

...and probably even much more difficult for people of color

'cause there's even far less on the investment side,

and there is, no question, a coordination between,

you know, just networking, you know?

Who you network, who you know.

Even if you're well-intentioned, you're networking with people

that you grew up with that you know

and that you -- you know that you socialize with,

and oftentimes there's -- there's not as much overlap

as there should be in ethnicity and even in gender. Yes.

It could be a great impact,

and I'm glad to hear that you're doing it

with the idea of investing in companies

that you think are going to be profitable.

I think it's a really important area of venture capital

in particular, so I commend you guys for...

-Thank you. -Thank you.

...taking it, and it's --

and you got a long road ahead of you, too.

-We do. We do. -[ Laughs ]

This is -- Well, there have been

good returns in the VC area. -Right.

It takes a long time,

and growing the funds to scale is hard.

-Sure. -But I think if you're patient,

I think there's really an opportunity.

I know we're in this for the long haul.

Well, this is great. I'm very interested.

So I will go through this, but I'm going to invest,

and the question is how much I invest.

I saw that the institutional minimum is $500,000,

the individual minimum is $100,000.

-That's correct. -This was great.

I enjoyed the opportunity, and I look forward to spending

the next 10 years watching you guys grow.

-Thank you very much. -Thank you so much.

-Thanks. Thank you. -Appreciate it.

-Really appreciate it. -Thank you, Ron.

-Appreciate it, Ron. Thanks. -Thanks.