I recently decided that I need to go for pre-seed funding. Having a startup where the data needed for the magic to happen sits on the continent (Africa people, keep up), is locked in several government departments and professional organisations, amongst other things, necessitates the need for greenbacks.
Problem, 99.9% of UK angels simply won’t get my business proposition. Whilst African Angels will, I’m raising an SEIS round. This presents an interesting dilemma and important question – what kind of money do I want? Smart money obviously, the kind that understands the Bnkability proposition for a start.
In conversation with Paris Petgrave of Rareseed Capital at Bloomberg’s diversity and inclusion event last night, she mentioned the challenge of convincing black professionals to become investors. Now, I totally get that these individuals have grinded and have had to put up with a lot of BS to get to where they are. When they finally make it to financial comfort, it’s time to live the good life right. But this group of professionals happen to be sitting on a lot of idle money sat in banks earning 1 – 2% interest per annum. That doesn’t include the money spent on the Jimmy Choo’s, Luis Vitton bag, Balenciaga’s or Armani suit. Yes, y’all have worked damn hard for that and deserve to spoil yourselves rotten. But how many Jimmy Choo’s does a girl need or Armani suits does a dude need for the office. The collective money spent on those items mentioned is your Angel investment money right there. And once a year is enough. Worse case scenario, you get 80% of it back if the startup you invested in failed if you’re a HNW registered under the SEIS scheme. Best case scenario, you can buy a shed tone of Balenciaga’s, Jimmy Choo’s, Armani suits and Luis Button bags if you choose the right opportunities or the seed firm or VC fund you’ve trusted with your money invests wisely.
Yes, it’s delayed gratification but it comes nontheless.
This is how Asian and Jewish communities have successfully built themselves when they’ve emigrated. Everyone pools their money to build one person. That person puts back into pool when they’re successful increasing the pool of funds to invest in a couple of people and so it goes. These communities proactively invest and support their own to build richer, not just financially, communities.
Whilst there has been a huge concentration and push to encourage black entrepreneurship, there needs to be an equal push to encourage black investors. People sitting in Executive positions in Banks, Management Consultancies, Media Companies, Ad Agencies, Sport especially football players (they can definitely afford to delay the customised Landrover spend) etc. People who were at the BBBAwards on the same night. People who have the collective power, and money off course, to make a real difference to brilliant entrepreneurs who might otherwise give up because they are disheartened with the struggle to raise adequate or any funding.
So, how do we convince black professionals to invest? Sophie Chandauka, would love to get your thoughts/advice on this.