The $10 million T-shirt

How did a ‘Black Founders Matter’ T-shirt design transform into a venture capital firm? According to founder Marceau Michel, it was almost completely by accident.

Marceau Michel’s big idea came to him by accident – and by virtue of having a big mouth (his words). Back in 2018, Marceau was fundraising for his new on-demand staffing company, Werkhorse, meeting with mainly white investors and moving nowhere fast.

So, one day at a tech event he was speaking at, he wore a T-shirt he had made bearing the phrase ‘Black Founders Matter’. The T-shirt made some noise, so he set up a shop on Shopify, surpassing $10,000 in sales and landing an interview with TechCrunch. During the interview, however, he blurted out something about wanting to start a new fund for black entrepreneurs – the first time he had given it any thought; ditto coming up the $10m figure; ditto its name – and TechCrunch went with it. ‘Black Founders Matter wants to raise $10m to fund black-led startups’ ran the headline the following day.

The accidental venture capitalist, who sees Black Founders Matter as entwined with racial justice, initially received a lot of buzz yet continued struggling to raise money. Things got worse when the pandemic hit but, with the reinvigoration of Black Lives Matter in May, he picked up momentum.

Q.
TechCrunch brought you a lot of attention. Let’s start there.

A. ‘When the article came out, I thought: shit, I really don’t know what I’m talking about. The article took a hoop dream and turned it into something much, much bigger.’

Q.
Even though you got some great press, was it still hard to attract investment?

A. ‘Just 1% of investment in tech startups goes to black entrepreneurs. Also look at the fact that although black women own 12.5% of all businesses in the US, they receive around 0.02% of investment. Venture capital is a white man’s world. Very nepotistic, too. My meetings with venture capitalists turned out to be incredibly demoralising. They kept moving the goalposts.’

Q.
You’ve said before that black founders are ‘safer investments’. Can you unpack that?

A. ‘Can you imagine someone back when Motown was starting out saying ‘Oh no, that won’t go anywhere’? That would have been wild! Investing in black has always made sense. It is viable. It is fiscally responsible. But black founders have always had to be more tenacious. They have to be more compelling. They have to get much further in terms of proof of concept than white founders do. All of which means they are inherently safer investments.’

Q.
Tell us more about your own experience of raising.

A. ‘I was hard even getting people to pick up calls or return emails, and that was before the pandemic... But then BLM helped me align with my true purpose. I was active in the protests: leading and speaking in some. While I was already working on the venture fund, BLM was this key that suddenly unlocked things. Everything started moving much faster. For example, one day we started making calls to raise money to support A Kids Book About. We got everything we needed to – ie, a lot of money – in just 40 minutes.’

Q.
Was that Black Founders Matter’s first investment?

A. ‘That’s right. It’s a publishing company that helps parents have hard discussions with their kids about racism, body image – lots of big-hitting things. If it had been a white founder coming out of Silicon Valley, the deal would have been valued at another $50m.’

Q.
How much on-the-ground difference has BLM made so far for black people in business?

A. ‘People have become more conscious of supporting black entrepreneurs, sure, but I don’t know if it’s made a huge difference yet. It’s isn’t enough to go to this black restaurant or that black shop. My fund is trying to use some of this energy to turn it into something even bigger. We have just got to around $2m. We could have had more, but we’ve had to turn some investors away – a lot treat us like a charity, almost using us to exercise their own guilt. But we are backing black entrepreneurs because they are a good deal.’

Q.
How would you define your purpose?

A. ‘We’re ushering in a renaissance of black ownership and entrepreneurship. In the US, black people don’t own anything. And if you don’t own anything, you don’t have any power. The average net worth for a black person in this country is less than $15,000. That needs to change.’

Q.
What are the dangers of excluding black people from starting their own businesses?

A. ‘Essentially, it means you are excluding problem solvers. The way I look at solving a problem is very different from how a white boy in Texas does. And it’s not to say one is good and one is bad. They are both great.’

Q.
What’s been your biggest challenge so far?

A. ‘It was important to build a level of legitimacy and brand around myself because I don’t look like the other fund managers. Investors don’t benchmark me in the same way.’

Q.
You’ve had a lot of setbacks. What did it take to keep going?

A. ‘Putting this together has been a two-and-a-half-year exercise in patience. If your inner voice is telling you to quit, then quit, but keep going with something else. BFM is my second iteration. I used an idea that didn’t work to get this going.’

Q.
One accident after another, yet here you are...

A. ‘I’m first-generation American. My parents are from Haiti. And they did not encourage me to be an entrepreneur. In an effort to protect us, a lot of black parents discourage our creativity. We’re told to become a banker, a lawyer, but rarely are we encouraged to start a business.’

Q.
Any final tips for the next generation of black people looking to start a business?

A. ‘Go to your local incubators and show them what you are building. Look up pitch competitions you can enter. Who inspires you? Look them up on social media and ask to talk to them. Essentially, find the spark that lights the fire.’

This article was first published in Courier Issue 38, December/January 2021. To purchase the issue or become a subscriber, head to our webshop.

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