Black Founders Matter’s managing director says the investment will help them spur the growth of entrepreneurs of color in Oregon, though OCF declined to give the specific amount.
A Portland-based venture capital fund with a focus on accelerating Black-founded businesses has announced a significant, but unspecified, investment from the Oregon Community Foundation.
The Black Founders Matter Fund announced last week that it was due to receive an historic investment from OCF — one the fund’s press release describes the investment as the largest ever given to a Portland-based investment fund.
“The BFM Fund aligns so well with Oregon Community Foundation’s community-led approach,” said Lisa Mensah, President and CEO of Oregon Community Foundation. “Our investment in the BFM Fund brings diverse women to tables where decisions are being made and into leadership positions across Oregon to create transformative change that benefits us all.”
A spokesperson for OCF told Oregon Business the organization was unable to disclose the amount of money it has allocated to BFM, saying “We just don’t disclose amounts of this nature, generally.”
The announcement comes one month after Bank of America it would invest a “sizable portion” from its $1.25 billion commitment to advance racial equality and economic opportunity.
Himalaya Rao-Potlapally, managing director of The BFM Fund, says OCF approached BFM because of the fund’s success in finding and developing brands from BIPOC entrepreneurs.
Current companies in the BFM Fund’s portfolio include footwear and apparel brand Saysh from track and field athlete Allyson Felix; Hued, a health care startup in founded in partnership with tennis star Serena Williams; and Glow Up Games, an all-women founded entertainment studio.
Rao-Potlapally says her organization has already laid out a pipeline of Black and brown founders across industries to OCF along 14 different industries within Oregon, with multiple founders across each vertical.
Even though she says the organization is already looking at founders to invest in, any founder from BIPOC community should feel free to reach out.
“Even if we can’t invest, we have a network of other funders that we connect with,” Rao-Potlapally says.
According the press release accompanying the announcement, the funding is also expected to help BFM gain access to federal funding and contracts through Oregon’s Small Business Credit Initiative Program, worth $83.5 million.
The BFM Fund is currently led by a leadership team composed of women of color.
Last year, BFM underwent a rebranding following the ouster of founder Marceau Michel, who launched the Black Founders Matter brand in 2017, and the venture fund in 2019.
Rao-Potlapally says that while the fund’s rebranding was recent, its mission and mode of operation remain the same.
“Our fund prioritizes Black and innovative businesses. This grant through OCF was to be able to focus specifically on Oregon-based entrepreneurs and focus on the Pacific Northwest, because in the Pacific Northwest, and particularly in Oregon, there’s like a huge underrepresentation of black and brown founders in the ecosystem and in the innovation space,” says Rao-Potlapally.
She adds that building the relationship between BFM and OCF has been the result of a three-year process of connecting, and seeing how the BFM fund could help achieve OCF’s goals of investing in more diverse business founders in Oregon.
“The OCF really wanted to help promote entrepreneurship across diverse founders, and they were looking for a vehicle to be able to do that. They realized ‘Hey, we don’t necessarily have to reinvent the wheel. There’s an organization here that’s been on the ground doing this work and building up their careers and building up the firm, and demonstrated a track record of investing,” says Rao-Potlapally.
Editor’s Note: This story has been updated from an earlier version.
Venture capital dollars saw a significant pullback in the Portland metro area last year, according quarterly data from the research firm PitchBook. The amount of money invested in the fourth quarter of 2022 was just $67.5 million, compared to $385.4 million invested during the same time in 2021, and down 42% year-over-year.
Rao-Potlapally says founders from underrepresented backgrounds are frequently misperceived as being risky investment bets, and that when venture capital dollars drag, it’s usually founders of color who bear the most brunt. She says her own history navigating the Oregon venture capital system has given her plenty of insight on how to make the space more equitable for founders of color.
“There’s not as much money in Oregon as there is in other states for seed and pre-seed level funding for sure, and there’s still an issue around access, because you still have to know someone with wealth and privilege to be able to get a warm intro to get connected to then be able to pitch. Historically, Oregon hasn’t had the most diversity, so we’re still pretty new at this,” says Rao-Potlapally.
“Largely, venture capital is very much an apprenticeship model,” she adds. “If no one looks at you and sees a younger version of themselves, it becomes difficult for you to rise up. I’m lucky in that a lot of people who run venture capital in Oregon took me under their wing and I was able to work across many of the funds in Oregon. I feel grateful for that, but it shouldn’t end with me.”
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