Many entrepreneurs of color are are taking the risk to launch their their own company and many need investment to grow their companies. Venture capital firms generally fill this void by providing funding to early-stage companies, though many times entrepreneurs of color lack the resources to raise the funding needed to get started and stay afloat.
More importantly, a lack of diversity behind the scenes of many venture capital firms have a negative impact on founders of color when decisions are being made on who deserves the funds. According to the Securities and Exchange Commission, less than 1% of trillions in global financial assets are managed by minority-owned or women-owned firms. However, McKeever “Mac” Conwell II is hoping to change the face of venture capital.
Conwell, a former software engineer who launched two tech startups and eventually landed at the Maryland Technology Development Corporation (MD TEDCO) as co-manager of the MD TEDCO Builder Fund investing in underrepresented founders, stepped out on his own to launch RareBreed Ventures (https://www.rarebreed.vc/). “I quit my job and started my own venture firm. I’ve spent almost the last year fundraising a 10-million-dollar fund which has been a unique and challenging experience,” Conwell said.
Conwell is the founder and managing partner of RareBreed Ventures, a pre-seed fund that invests in founders that are typically overlooked, under-networked and in areas where no one else is looking to invest in. Conwell said he knew once he quit his job that it was all on him to go and make it happen.
“This is like the tenth time I’ve quit my job to do something crazy. So, this is just who I am. I’ve quit a good government job to start companies, I’ve quit jobs for political reasons, quitting jobs is easy I do that all day every day,” Conwell said.
Conwell says he was still scared to make this move, but he knew what the stakes were. Most importantly, he knew he couldn’t give his all to make the VC a success until he was all in.
“The difficulty was I couldn’t really move forward with just nights and weekends because I was working for the State of Maryland. I had to wait until I quit to even form the entity or anything,” Conwell said.
The success of Rarebreed didn’t happen overnight. Conwell says at first nothing was happening at all.
According to Conwell, the size of the VC fund dictates your strategy and how much money you make. Because of this, Conwell decided to raise a 10-million-dollar fund. He said this was always the goal.
“My goal was always 10 million, I always told people if you gave me 24 months I could find a way to raise 10 million.
Although RareBreed is forming a 10-million-dollar fund , all the money doesn’t get invested. “When someone says they have a 10-million-dollar fund that does not mean they’re going to invest ten million dollars,” Conwell said.
Conwell broke down the expenses that you must take care of along the way. “You take 2 percent of the size of the fund every year for management fees that’s what you use for operations. And then you get 20% of all the returns your funds create”
Now two hundred thousand dollars is used to run the fund including all the operations, salary, travel, and other services every year for ten years.
“This is why a lot of people that get into venture are already wealthy before they get started,” Cowell said.
Although Conwell wasn’t rich when he started, he was determined. The first couple of months were hard and during that time, he was making every connection that he could.
“So, from June of 2020 to September 2020 I had over 1,100 meetings. In addition, from September 2020 to August 2021 I had over 5000 meetings,” Conwell said.
Conwell said he had to focus on making connections with limited partners and social media was a great resource, especially Twitter. Conwell used his social media platform to connect to the venture space and start conversations with the right people.
Although, Conwell was turned down several times after consistent effort he was able to spark conversations that led to investments. Conwell remained consistent and eventually his Twitter following grew by thousands, and his network did too.
So far, Conwell has made 20 investments since the fund started. Conwell prides himself in investing in all types of companies that represent all types of people. Right now, “72 percent of our companies have underrepresented founders, 61 percent were outside of major tech hubs, 50 percent had a person of color as an executive, and 40 percent had a female executive,” Conwell said.
RareBreed’s portfolio includes a range of companies like grocery delivery services, next generation medical center, mobile gaming studio for women of color, banks for the next generation, hair products, and so much more.
“I’m very intentional about looking everywhere. I’m trying to find the best quality deals no matter what,” Conwell said.
Conwell is almost at the 10-million-dollar goal. “We are at 8.8 million in commitments towards our fund. We have another 1.2 million to go. So, anyone that’s interested in being and investor in RareBreed you must be an accredited investor, our minimum check size is 25k, and you can visit https://rarebreed.vc,” Conwell said.