The Portfolia Rising America Fund marks the first fund to be led by five world-class investors who are also women of color. Mergers & Acquisitions asked investment partner Lorine Pendleton about the fund, the founders and the investment thesis.
What is the Portfolia Rising America Fund's investment thesis?
The fund invests directly in early and growth-stage companies in the U.S. led by people of color and/or LGBTQ founders, or products and services that cater to these markets. These are founders, ecosystems, products and services historically overlooked by traditional venture capitalists but positioned for significant growth and profitability. We believe that strength lies in differences and seek out entrepreneurs and startups who are using shifting demographics and their own diversity of experience and thought to create innovation that offers outsized opportunities for returns and impact.
Why is the call to action to invest in people of color entrepreneurs and businesses important now?
Investing in people of color entrepreneurs and businesses has always been important. Here is why: Investing in diverse entrepreneurs can drive significant economic growth, given the size and spending power of these markets (estimated to be $6 trillion). There is potential for significant personal wealth creation for these founders. If you do not invest in these founders and businesses, you can also miss out on critical innovation that can help us tackle seemingly insurmountable problems, coming out of this pandemic -- opportunities to change the world for the better. Lastly, diverse teams have been proven to drive better financial performance than homogeneous teams and can unlock innovation that drives market growth.
Who are the lead investors?
Our fund is the first to be led by five world class investors who are also women of color:
Noramay Cadena is a co-founder and managing partner of MiLA Capital, an early stage venture fund in Los Angeles created to advance next generation hardware platforms (IoT, robotics, industry 4.0, frontier tech, etc.). She is also the founder and former executive director of the Latinas in STEM Foundation.
Daphne Dufresne is a managing partner of GenNx 360 Capital Partners, a private equity firm in Washington DC focused on investing in industrial and business services companies. She was a founding partner and managing director of RLJ Equity Partners, the private equity firm of Robert L Johnson, the billionaire founder of Black Entertainment Television (BET).
Juliana Garaizar is a major angel investor, and has served as director of the Texas Medical Center Venture Fund, and as managing director of Houston Angel Network and of the Sophia Business Angels network in France. She also helped found Galata Business Angels in Istanbul, WeAngels in Chile and Crecer+ in Spain.
Karen Kerr was most recently executive managing director at GE Ventures, and previously a managing director at Arch Venture Partners and a director at Intellectual Ventures and helped to launch numerous startups as senior director of new ventures and alliances at the University of Southern California.
Lorine Pendleton is the NY chair at Tiger21, as well as a longtime and active angel investor who invests in and advises women and diverse-led companies. She is on the board of directors of the Angel Capital Association (ACA) and ACA's first African-American board member in its history, as well as an alumna and member of Pipeline Angels.
What companies is the fund investing in?
The fund had its first close earlier in 2020 and has made two investments to date, with several other potential investments in due diligence.
Our first investment was in MoCaFi, a Newark, N.J.-based fintech startup founded by African-American entrepreneur and former JPMorgan Chase commercial banking executive Wole Coaxum. MoCaFi offers a mobile-first banking platform that brings digital banking products to underbanked or unbanked communities (an 88 million U.S. market), allowing them to build credit and financial mobility.
Our second investment, which we have not publicly announced yet, is a Series C in a women’s tele-medicine network with holistic care provided in 20+ specialties and 30 languages. It provides on-demand access to virtual care built specifically for women as they go through childbirth, post-partum care and other medical events - events which are often fraught with difficulties for women of color.
What is the future for the fund?
The Portfolia Rising America Fund will help drive innovation in the communities and sectors that need it most, while offering the potential for significant returns. We invest in a portfolio of companies from Seed to Series C, which mitigates risks for our member investors and provides them with a spectrum of opportunities. We have a few slots left for investors in the fund but expect it will close by early July, given increased interest in investing in opportunities for people of color.