The Oakland Black Business Fund (OBBF) is announcing multiple initiatives it hopes can jump-start Black-owned businesses around the country, both in the tech world and outside of it.
The organization is starting out with a relief fund to benefit Black businesses that have been hit hard during the pandemic and the upheaval related to the Black Lives Matter movement. But it also wants to launch a fund for investment in Black-owned startups and real estate.
OBBF is the brainchild of partners Elisse Douglass and Trevor Parham. In an interview with VentureBeat, Parham said the fund has already raised about $150,000 for pandemic relief. The goal is to create a $10 million fund to help San Francisco Bay Area businesses affected by COVID-19 and to eventually create a $1 billion investment fund to support Black entrepreneurs across the country.
“We saw a lot of businesses were being hit multiple times, with protests about racial justice where the businesses were getting their windows broken, with the pandemic that was shutting them down, and the general market conditions,” Parham said. He acknowledges the fund has a long way to go to reach its goals, but he said OBBF is working with some high-powered people and hopes to prove itself one project at a time.
“The initial focus was on small business relief,” Parham said. “My cofounder works in commercial real estate, and a number of her colleagues and tenants were impacted. And we felt we could raise a couple of thousand bucks and help people with some broken glass and other immediate recovery efforts. But as we started to talk to these businesses, we began to see that they had much greater needs, many of which stemmed from issues that were present and prevalent before the pandemic hit.”
After getting the fund off the ground in June, Parham and Douglass are already receiving some support from established companies like Okta, Clorox, and the Alliance for Community Development. Okta is a publicly traded identity and access management company based in San Francisco, and COO Frederic Kerrest said in an email that Okta wants to be innovative in how it performs its social impact and equity work.
“We recognized Oakland Black Business Fund’s innovative approach to funding Black businesses as soon as we met the team, and we knew we had to get involved,” Kerrest said. “The aim of our social impact arm, Okta for Good, is to strengthen the connections between people, technology, and community, and we’ll only be able to do that if we continue investing in Black communities and companies. As business and technology leaders, we all need to turn our statements in support of Black Lives Matter into actions, and we encourage others to join us in supporting OBBF to create further opportunities for Black economic growth.”
Parham believes other big companies and famous industry figures will step forward to get involved. In addition to their work with the fund, Parham is the founder and director at Oakstop, a shared working environment and event space, and Douglass is a senior project manager at Signature Development Group. They see their mission as shoring up Black businesses in order to boost the larger community.
“We’re especially focused on funding brick-and-mortar businesses, which anchor the Black community culturally and economically and establish a sense of place for Black communities,” said Douglass. “By stabilizing these businesses and their underlying real estate, we are taking a critical step toward creating a new economic trajectory for the Black community.”
By the end of 2022, the company wants to raise $1 billion to invest in Black-owned businesses and real estate. That may sound optimistic, but Parham said it pays to think big. If the fund hits that goal, it could have a significant impact on the Black business ecosystem. Based on data from the 2018 Small Business Credit Survey, the Brookings Institution found that large banks approve just 29% of Black business owners’ loan requests, compared with 60% approval for loans sought by white business owners. In addition, Black founders receive less than 1% of venture capital.
Above: Trevor Parham and Elisse Douglass want to provide both pandemic relief and investment for the Black community.
Parham said OBBF’s goal is to provide business grants and larger investments that address the community’s historical lack of access to capital and control of real estate. While the fund supports tech startups, Parham said OBBF recognizes that many Black entrepreneurs start their businesses outside of the traditional tech industry, where venture capital has been concentrated. So far, Parham said the group has cut about a dozen checks to Black-owned businesses.
“The majority of businesses are not tech businesses,” Parham said. “We want to serve a broader cross section of the Black community, but then also we want to focus on the intersection of finances. The relief fund is done as a nonprofit, but then the venture fund is done as venture capital. The relief fund has taken priority at first. But we have received interest on the venture side as well.”
Over time, the fund wants to expand beyond Oakland to become a national investment firm. Businesses interested in receiving capital or technical support can apply directly at the fund’s website. Investors or organizations interested in contributing to OBBF can contact [email protected] for more information on partnership opportunities.
“Our partners have said they would be happy to participate on a deal-by-deal basis, and that allows us to talk about raising money as we go and then eventually pull it all into a portfolio,” Parham said.
OBBF offers opportunities for LP investment and tax-deductible donations through its nonprofit sponsor, Alliance for Community Development, whose mission is to increase access to capital and support for local, underrepresented entrepreneurs.
“We’ve gotten a lot of great feedback from high net worth individuals or larger corporations that really do want to do this work and just haven’t been able to see a path forward to making it happen,” Parham said. “They are motivated by what we are doing. You combine that with the fact that mainstream news continues to push forward all these different headlines about ways in which the Black community is still being impacted by economic injustice and racism, and you see the need for this continues to increase. We’re at a critical point, and we’re addressing an age-old issue. But it would have been much harder to pull off six months ago.”
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