Diversifying the face of success

BKR, Canada’s first Black-led venture capital firm, is changing representation on both sides of the funding table.

Lise Birikundavyi and Isaac Olowolafe know the depth of talent that exists in the Black tech community in Canada. But they also understand the challenges the community faces when it comes to accessing capital investment. They started BKR Capital, Canada’s first Black-led venture capital firm, to help fill that void.

Representation on both sides of the talent-funding table has a huge impact on the innovation sector, says Birikundavyi. “A lot of people told me, ‘You’re the first group I’m pitching that looks like me.’”

BKR Capital has set an ambitious goal to invest in 18 Black-led companies. Two years after it opened its doors, it’s already halfway to meeting that milestone, which has far-reaching implications. “By diversifying the face of success, you decrease unconscious bias,” says Birikundavyi.

Here, Olowolafe and Birikundavyi talk about why representation matters in the venture capital space and where they see the fund in the next decade.

Research suggests Black-led startups receive less than 2 percent of capital investment funding. What accounts for that low investment?

Birikundavyi: One of the questions we heard when we started was how many of those entrepreneurs exist? Most venture capital funds will say, “Well, we don’t really see a lot of Black entrepreneurs in the tech space.” Since we started, we’ve seen over 900 pitch decks. So, in fact, there’s a lot of Black-led tech companies. And you know, some of them have been around and have never even thought of raising money until they saw representation on the VC side.

The VC space is extremely subjective because it’s risky. When you invest in an entrepreneur, you invest in the person in front of you and you often make an assumption about where to invest based on what you know of success. So, if you’ve seen Facebook and Google and seen who was behind it, you’re sort of looking for the same type of people. If you can see yourself in the entrepreneur, they become more trustworthy. There are a lot of intangibles that sometimes create this gap. Women face that same issue. We’re there to bridge that gap.

What’s the response to BKR been?

Birikundavyi: From an entrepreneurial perspective, it’s quite exciting for them to see representation on the other side of the table. We speak with a lot of other VC funds that are also excited at the idea of having more diversity in their portfolio. We also help expose those startups to good VCs. At the end of the day, that’s the change we want to see in the ecosystem.

You aim to fund 18 entrepreneurs. How did you come up with that number?

Birikundavyi: We wanted to raise a $10-million fund. But we’re not a big team so we also wanted to make it manageable. We see ourselves as partners for growth. It’s not just spray and pray. We’re not just providing capital. We’re providing support while also ensuring a good return on investment. We take board seats and we advocate for companies in rooms when they’re not there. We’re trying to help from a strategic front as well. We could not do that with 100 companies. Even 18 is stretching it. But this is what we came up with as an optimal number. And we’ll see and adjust as we invest.

What kinds of companies do you invest in?

Olowolafe: We’re industry-agnostic but we’re always looking at the founder — at their ability to put together a team and to recognize a gap within an industry that they’re trying to tackle. We’ve made investments in logistics, in cybersecurity and in healthcare. Each of the founders that we have backed provides a solution in an industry that they have expertise within and have put together a team to execute that solution.

What are some of the companies you’re excited about?

Birikundavyi: All of them! Protexxa is one of our latest investments. It’s run by Claudette McGowan, the former chief cybersecurity officer at TD Bank. She’s a Black woman, extremely smart and knowledgeable about her field. She saw a real gap in the cybersecurity industry and decided to tackle it. When you look at cybercrime, 95 percent of the breaches are due to human error. There are a lot of tech solutions, but from a human perspective, there’s fewer. Her platform gives companies an understanding of the general cyber-hygiene of their employees and what their weakest points are, so that they can tailor cybersecurity training to better protect their assets.

Olowolafe: I’m excited about the work that Lauft is doing. They’re creating co- working spaces on demand. Right now they’re in the GTA and are expanding nationwide.

Where do you see BKR in 10 years? And how would you like to see the investment community change in Canada?

Olowolafe: The goal is to continue to increase our capacity. Right now, it’s about a $20-million fund. But I think we’re proving that the demand is even greater than that. That’s the growth trajectory that we’re looking at.

We’re already normalizing the facts that there are fund managers from the Black community who are invested in tech companies and that there are successful, Black founders in the ecosystem. A great example of that is Woveo. We invested in them and that exposure is opening up more doors for them. That’s an example of the value that BKR is bringing to the ecosystem. It’s not only diversifying the capital that’s going out to tech founders but it is also exposing companies to fund managers and VC funds that they typically wouldn’t have been exposed to. That’s probably the greatest impact that we’re having.

MaRS commissioned photographer Jenna Marie Wakani to photograph the thinkers, entrepreneurs and investors behind some of Canada’s most exciting companies. See the full portrait series here.

Photo courtesy of Jenna Marie Wakani