Innovative black-led companies in the UK are set to benefit from a £100 million investment fund created by a unique team of venture capitalists who arestrategically targeting businesses that also deliver a positive social impact.
Black-owned and managed venture capital (VC) firm Impact X has recently been launched to invest significant money in the businesses of under-represented groups such as the African Caribbean community and women in this country and across Europe.
It is managed and advised by an accomplished and ethnically diverse teamthat has over 500-years’ worth of investment and management experience.
Among the founding members of the team are Paula Groves, General Partner, and a co-founding partner of the £54 million technology focussed fund Axxon Capital who has over 20 years’ private equity and investment experience; Ursula Burns, Vice Chair, Digital & Technology, the first black woman CEO of a Fortune 500 company, Xerox, and named as one of the most powerful women in the world by Forbes; Eric Collins, CEO, a serial entrepreneur who has helped sell companies to the likes of Microsoft and Nuance as well as running a number of successful venture capital companies across the world and Ric Lewis, Impact X Investment Committee Chair, who is also the founder, Chairman and co-CEO of the largest black owned business in the UK, Tristan Capital Partners, a real estate investment firm with £11bn under management.
According to recent research by the Economic and Social Research Council, businesses run by Black and minority ethnic (BME) entrepreneurs were estimated to contribute between £25-£32 billion pounds per year to the British economy.
Other figures, published in 2017, from the Global Entrepreneurship Monitor (GEM), highlighted the fact that the Total Early Stage Entrepreneurial Activity (TEA) rate among non-white Britons was 14.5 per cent, compared to 7.9 per cent for white Britons.
Yet despite growing levels of entrepreneurial activity in the BME community, aspiring black business owners often struggle to get significant investment to help their businesses grow.
Statistics also reveal that only 1 per cent of VC investments – a private or institutional investment made into early-stage or start-up companies that have huge potential to grow – go to black owned businesses.
Female led businesses fare only marginally better receiving just 4 per cent of such funding.
The overwhelming majority of VC investments go to white university educated men. Impact X sees this as a huge gap in the VC market that offers real opportunities.
Speaking exclusively to The Voice about the project Collins the disparity in funding is a real gap in the market that offered investors real opportunities.
He said: “Everyone can look at the numbers and say black entrepreneurs in Europe, no matter what country we’re talking about, whether its France with its 8 per cent black population or the UK with its three per cent black population and realise very quickly that only a very small sliver of risk capital, or in our case venture capital, goes to supporting black-owned businesses. And we find that because of that there are businesses that just don’t get opportunities or just don’t get created. We believe that the next Air BnB or the next Google is going to come from a black entrepreneur who is sitting around thinking of creative ways to solve problems that her community sees.”
The idea to create Impact X came out of a meeting of high profile entrepreneurs, investors and celebrities including Sir Lenny Henry that took place in May 2018.
You can read the full version of this story in the latest edition of The Voice out now