Black-owned venture capital firm Nex Cubed is investing in the next generation of founders hailing from Historically Black Colleges and Universities.
The San Francisco-based global accelerator has partnered with Costco Wholesale to announce a $40 million HBCU Founders Fund that aims to help close the capital investment gap for Black entrepreneurs and business owners. Current students, alumni, and professors of HBCU’s are all eligible to apply for the funds to secure resources that will help accelerate the growth of their startups.
“We still hadn’t addressed the fact of funding, and that was still a gap that needed to be filled,” Nex Cubed CEO Marlon Evans told TechCrunch. “That’s what led us to launch this fund where we hope to serve as a catalyst for other investors to recognize that there’s a tremendous amount of talent at HBCUs.”
Nex Cubed will use $5 million from Costco to launch a four-month accelerator program, potentially split into two parts, Impact Alpha reports.
“We are proud to partner with the HBCU Founders Fund to help foster a more inclusive venture capital environment and accelerate Black entrepreneurship,” said Richard Galanti, executive vice president and chief financial officer of Costco Wholesale.
HBCU Founder’s Initiative
The recent funding announcement is an extension of Nex Cubed’s HBCU Founder’s Initiative. More than 600 students and alumni from over 75 HBCUs have participated in the program offered through the non-profit organization. Launched in 2020, the initiative was geared towards inspiring participants to develop technology-abled solutions that close the wealth gap ranging from increasing access to healthcare, education, and financial services, according to the organization’s website.
About Nex Cubed
Prior to launching the newly formed fund, Nex Cubed had already established its roots as an advocate for encouraging entrepreneurship among marginalized groups, allocating both monetary and social capital for budding entrepreneurs of color. Establishing partnerships with Fortune 500 companies led to the financial backing of companies like AT&T and Verizon.
In 2020, numerous corporations were adamant in pledging support for Black-owned businesses and kickstarted incubator programs to promote equity for acquiring capital and sustainable business growth. Even with an injection of seed and series funding for Black businesses in the past few years, many aren’t profitable enough to survive the first phase of the startup stage because of the lack of investment alternatives to bankroll their business. A McKinsey & Company report found that Black entrepreneurs are three times more likely than their white counterparts to state a lack of access to capital as negatively affecting their business profitability.
As more Black-led venture capital firms and funding initiatives like Nex Cubed for minority-owned entrepreneurs with the intention of closing the startup funding gap, the firm believes the next generation of entrepreneurs will be able to reach their full potential.
Applications are now open for those wishing to apply to the HBCU Founders Fund.