Dollars, transactions and the importance of non-dilutive capital – TechCrunch


Today, June 17, we recognize the efforts this nation has yet to make to tackle structural racism and disparities, including in the tech world.

This week, HBCUvc, a nonprofit that aims to diversify the world of venture capital, launched a million dollar fund. Founder Hadiyah Mujhid told me that capital would provide non-dilutive funding to overlooked founders, whom they define as Black, Native, and LatinX entrepreneurs, replacing the traditional angel trick. But she also admitted that supporting the founders wasn’t the only main focus. Instead, she explained to me the importance of what she defines as “teaching capital”.

Similar to how university hospitals give would-be doctors a way to practice and learn their craft before officially entering the field, the fund wants to do so for its 230 or so budding investors they already work with, including many come from historically black colleges and universities. Notably, non-dilutive capital provides entrepreneurs with equity-free financing and a learning experience with lower stakes.

There are a lot of organizations right now that are fundraising [with] the primary objective of supporting the founders. And that’s one of our goals, but we’re hoping to have a ripple effect on training and really provide ramps for the next best investors… and to do that they need to have a vehicle of training.

While I’m not always a fan of the renowned names for capital, “teaching capital” certainly makes a compelling framing. Track record is everything in this industry, and underrepresented people often don’t have the edge or privilege of access on their side – dollar or transactions perspective. Scout programs have been around for a long time to fill this gap, but I think there is still a lack of intentionality around who feels empowered to write an investment note, ask questions and be new. This week, BLCK VC launched its scout program and Google for Startups launched a non-dilutive fundraising instrument for black founders, underscoring the growing importance placed on building diverse entrepreneurs.

HBCUvc’s fund was announced nearly a year after it almost closed due to lack of capital. Mujhid explained how the unjust murder of George Floyd led to the biggest one-day donation in the life of his nonprofit, which “changed the trajectory of programming.” She also said that a lot of interest was a knee-jerk reaction, urging people to view this work as a long-term commitment.

In the Creative Capital Rabbit Hole we will:

In the rest of this newsletter, we’ll cover Waymo’s latest augmentation, the Nubank EC-1, and a Pittsburgh event I can’t wait to talk about.

Waymo gets a lot more

Image credits: Bryce durbin

Waymo, the stand-alone arm of Alphabet, raised $ 2.5 billion in its second institutional cycle. Investors include Alphabet, Andreessen Horowitz, AutoNation, the Canada Pension Plan Investment Board, Fidelity Management & Research Company, Temasek and, of course, Tiger Global.

Here’s what you need to know: Waymo becomes external after a few internal shuffles. The funding comes just months after CEO John Krafcik stepped down from his title after spending five years in the post. Last month, Waymo lost its CFO and head of partnerships.

To find out more, here are my favorite recaps of TC sessions: Mobility:

The Nubank EC-1

Image credits: Nigel sussman

Another week, another EC-1! Marcella McCarthy wrote of Nubank, a Brazilian credit card and banking technology company that raised a valuation of $ 30 billion last week. It is one of the most valued startups in the world, with over 40 million users.

Here’s what you need to know: As McCarthy puts it in the article, Nubank began by trying to solve a daunting challenge: “How to rebuild the concept of a bank in a country where the bank is widely hated, when the incumbents strongly entrenched in the state worked to block every movement. “Perhaps, the story continues, it would start with California Street.

Check out each episode of the series below:

Around TC

In May, thousands of you read my Duolingo EC-1, a deep dive into Pittsburgh’s favorite edtech unicorn. Now, we’re taking you to Pittsburgh to hear Karin Tsai, the head of engineering, as well as Carnegie Mellon University President Farnam Jahanian, Mayor Bill Peduto, and a handful of local startups.

Our TC City Spotlight: Pittsburgh event takes place on June 29, so be sure to register here (free) to listen to these conversations, enjoy the pitch-off, and network with local talent.

Also, a friendly reminder that we are compiling a list of the best growth marketers for startups. You can help us by naming your favorites in this survey.

All week long

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Thanks for reading, as always. Take care of you all!

NOT



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