Diversity, Equity & Inclusion in Entrepreneurship

Innovation In Equality seeks to confront the racial and gender gap in entrepreneurship and VC investing through candid conversations with experts and influencers.

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The Venture Capitalist: Bridging The Gap

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JumpStart’s Gloria Ware will talk to Candice Matthews Brackeen, founder of Lightship Capital, a firm investing in high growth companies led by women and people of color in the Midwest.

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Candice Matthews Brackeen is the Founder and CEO of Lighthouse, the Cincinnati, OH-based portfolio service firm including accelerators Hillman and NewMe, and venture capital fund Lightship, where she serves as Managing Partner. Lighthouse companies work together in support of underrepresented, early-stage, transformational businesses. As CEO of Hillman, the first accelerator in the Midwest to provide support exclusively to this demographic, she has influenced state policy around economic inclusion in addition to establishing meaningful partnerships with companies like Proctor & Gamble, Kroger, and Chase, in support of Hillman’s work. She has over 15 years of entrepreneurial experience and founded the Cincinnati Chapter of the Black Founders Network (BFN), to address the need for increased diversity and inclusion efforts in the local entrepreneurial ecosystem. She holds a BA Economics from the University of Cincinnati and was a Hewitt-Kautz Fellow.Lightship Capital drives innovation and investment in the Midwest. We leverage corporate partnerships, executives in residence, and organizations from our region to build sustainable local ecosystems full of high growth companies led by women, people of color, and other underestimated founders.

The Hillman Accelerator is committed to discovering and launching innovative ventures from minority and women founders through our 4-month program based in Cincinnati, OH.

"I love it when other founders, funders and communities extend invitations to visit. No one has time to compete when there’s a common goal. It has been incredibly uplifting visiting and cross-pollinating with different cities across the country to help elevate women and tech founders of color"

— Candice Matthews Brackeen, Founder of Hillman

Gloria Ware

Director, KeyBank Center for Technology, Innovation and Inclusive Growth

Gloria leads the KeyBank Center for Technology, Innovation and Inclusive Growth, a component of the KeyBank Boost & Build program, designed specifically to accelerate the success of women and minorities as entrepreneurs of high growth firms, while connecting women, minorities and those in rural communities across Ohio to career opportunities in growing, globally competitive small businesses.

Gloria has a 25-year track record of success in the finance industry, providing capital, business development and strategic management advice and solutions to a diverse portfolio of startups, small businesses, nonprofits, public sector, private schools and universities. Prior to joining JumpStart, Gloria served in a number of progressive banking positions, last serving as Vice President of Public Funds for Fifth Third Bank.

Ray Leach:

Hello, and welcome to Innovation In Equality, a podcast bringing inequities in tech to the forefront through candid conversations with founders, investors, and stakeholders. I'm Ray Leach, the founding CEO of JumpStart, a full service venture capital and economic development firm, helping to unlock the full potential of entrepreneurship. Today, JumpStart's Gloria Ware will talk to Candice Matthews Brackeen, Founder of Lightship Capital, a venture fund investing in high-growth companies, led by women and people of color in the Midwest. I've known Candice a long time, and I'm excited that all of you are going to get the opportunity to hear from Candice and Gloria.

Gloria Ware:

Welcome to Innovation In Equality.

Candice Matthews Brackeen:

Thanks for having me, Gloria. It's nice to be talking to you today.

Gloria Ware:

You too. We're just going to get right to it. I've had the opportunity to know Candice from when a lot of these things were part of her Future History is Now Strategic Planning, and to see the work that she's done and the impact that she's made not just in Ohio, but now, is starting to have throughout the Midwest. Candice, talk to us about your experience as an ecosystem builder and investor in the Midwest, and you've had so many opportunities to go elsewhere, and I know your work has taken you all over the country, all over the world. Talk to us about your experience in the Midwest and what's made you decide to stay here and invest here?

Candice Matthews Brackeen:

Oh, I feel like we have great assets here in Ohio. I'm an Ohio girl, originally from Toledo, and when I came to Cincinnati, I really felt from the beginning, even as a student at the University of Cincinnati, that I was welcomed with open arms. I was a first-gen college student, and really right off the bat, I was great at what I was doing in the field of economics, and two wonderful families from my region paid for my college experience, and so my life has kind of happened. There's been a kind of a portion of just me driving myself forward, but also great allies and people who have helped me along the way that have kind of been my lighthouse for my life. Why here?

Candice Matthews Brackeen:

Gosh, it's been a long time, Gloria, but six years ago, I started that little meetup group that ended up growing into the first conversation we had here locally, called Future History Now, and so actually, this week is the sixth year anniversary of Future History Now. It was a conversation that we started in our local community to figure out, "Why aren't venture dollars, and why isn't just capital in general distributed equitably?," and at that time, we were talking specifically about black entrepreneurs. That conversation sparked off and really was the reason why many of the programs and services that I offer today have happened. It was a conversation with the folks from Procter, and Kroger, and CincyTech down here locally, and many others to talk about, "What's happened in the past?," "How are we going to deal with that today to inform the future world that we want to live in?," and I can say that we've really nailed the things that we wanted to kind of build and grow just in a grassroots way over the last six or so years.

Gloria Ware:

Talk to us about your experience as an entrepreneur and how that shaped the work that you do at Hillman and the lens that you bring to the work as an investor.

Candice Matthews Brackeen:

Yeah. Seven years ago, when I started my first tech company ... Now, I've had brick and mortar companies before, but seven years ago when I started, I applied for a local accelerator, and I didn't get in, right? Lots of entrepreneurs get a no. What I didn't know at the time was that accelerator that I had applied to had never accepted a person of color into their cohort, right?

Candice Matthews Brackeen:

I didn't know that ... I may have been dealing with something that was just never going to happen to me. I then applied to another local accelerator and got in as their first person of color that they had accepted in the multi-year history of that organization. It was around that same time that ProjectDiane came out, and the entire country started to learn that less than 1% of venture capital goes to a black-led tech company and even less to a black woman, and so I was one of those first 88 women to ever raise any venture capital, and so knowing in that moment that that's what was happening to me, I wanted to be able to make that not happen to other women that look like me or other people that were considered the minority. It was from the raising of capital, running out of capital, and then realizing that there's a national issue, that I wanted to kind of tackle this on my own, and I had a great network of people around me that we had kind of grown over the last few years.

Candice Matthews Brackeen:

Yeah, that's really how the work all got started, and I look at everything through that lens now. I look at through that lens. My spouse, Brian that you mentioned earlier, he looks at things through that lens. He's had his own issues in entrepreneurship with dealing with the bias that comes from raising venture while black, and we use that lens to help our entrepreneurs build their own businesses.

Gloria Ware:

Candice, you have been a fierce advocate for Ohio founders of the Ohio ecosystem. You've traveled the world, but definitely have been doing a lot of work and pitching to investors and entrepreneurs on the West Coast and the East coast. I'm sure in the last six or seven years, you've seen some changes in attitudes about opportunities in the Midwest, which have been compounded by the pandemic. What are some of the changes that you have seen in terms of the interest in investing in the Midwest, and particularly from investing in underrepresented founders, and in the Midwest in order to continue to leverage this new interest from investors and entrepreneurs? What are some changes culturally that we need to make in our ecosystems?

Candice Matthews Brackeen:

Yeah. When we all first started having these conversations six or seven years ago, really, we were speaking to our majority peers, and there was a lot of conversation like, "But aren't we friends?" Like, "We're friends. We don't see that there's an issue." I think at that very moment when we started, we had a lot of qualitative data and not quantitative data, right?

Candice Matthews Brackeen:

Pre-ProjectDiane, and even like right at ProjectDiane, it seemed like a national issue, and not so much like an Ohio issue. Then, we did that MECA report, the Minority Entrepreneurship Connectivity Assessment, and we really looked at Ohio ecosystems, and how we were distributing tech and innovation dollars within each ecosystem. Then, we had some kind of quantitative proof that there was a disparity and how we were equitably distributing our venture and innovation dollars, most specifically through Ohio Third Frontier, and so I think once we had that information, we started having good conversations, but still really tough conversations, where it felt a little combative on both sides, if we're all being completely honest, right? These were not easy conversations to have. The conversations of race six or seven years ago are not what we're having today, and so if there's anything good that has come from the murder of so many black people, is that we are able to now have real conversations with real visual proof of the disparity between communities, and there is no getting around the quantitative data, the visual data that we are having now and today, and I think that that's opened the eyes of many nationally, and slowly those things are happening here within our state for people to start having real conversations, but with all of that being said, I'm raising a $50 million fund, focused on investing in the Mighty Middle of the United States.

Candice Matthews Brackeen:

We are based in Ohio. This is the largest, first-time fund raised by a black woman. 99.5% of my fund ... Hold on, let me take that back. 99.9% of my fund has been raised outside of the State of Ohio.

Candice Matthews Brackeen:

There are two women on my team. I don't know how many black women venture capitalists are in the State of Ohio, but I venture to assume there's less than five, and two of them are on my team. If there are three more, you'll have to let me know who they are, Gloria, who those check writers are, but that's where we need to get to in the State. We need to start actually having not just conversations, but putting dollars behind this issue. We have a lot of, and excuse my long rant here, we have a lot of people in our State that are doing diversity inclusion work, that are being led by majority groups, and those groups are deciding what minority communities need without our input.

Candice Matthews Brackeen:

I believe in diverse teams, and I believe that diverse teams should include diverse check writers, diverse decision-makers, and that the work that we are doing is on par with our majority peers, and everyone needs to recognize that first and foremost. Those are the conversations we need to have, is like, "How do we move to the money conversations, and not so much these conversations that are really geared toward working into poverty work?," because that's not what we do here. We are working on a market failure. The market has failed black, indigenous, people of color, those who identify as women, the LGBTQ community, and those who are disabled. If you add all those people up, that's more than the majority, but we've been labeled the minority.

Gloria Ware:

Absolutely. What are people that have had experienced investing and successes investing on the West and East Coast seeing in your capabilities and in the Midwest that we are being challenged with seeing in Ohio and some of the other Midwestern states? I'm a little confused as to what the disconnect is in terms of why they're able to get it and be very excited, and want to see you grow and expand, but that is more of a challenge at home.

Candice Matthews Brackeen:

It is. Steve Case, years and years ago said, "Hey, there needs to be a Rise of the Rest of these cities." Right? He's a genius obviously with AOL, did the entire tour with Rise of the Rest, going from city to city, and highlighting the fact that we have great assets and that intelligence is distributed equitably. Now, it is completely obvious that out in San Francisco, they have scale behind them, right?

Candice Matthews Brackeen:

People are building companies, they're exiting, those people are becoming investors, they're starting new companies, and they're recycling capital, both financial capital and human capital over and over and over again. We're not getting those same repetitions here in the Midwest, but if you look at many of the assets here, we are doing a great job with things, sometimes outside of those deeply technical things. We have a great soap company here in town.

Gloria Ware:

Right.

Candice Matthews Brackeen:

They are innovating constantly, and they're moving to things that are moving water and helping with sustainability. We have Eli Lilly that's an amazing biotech and life science company just in Indianapolis. The Cleveland Clinic is doing amazing work, and many of the strides that we made with COVID-19 and the vaccinations, those things that got fixed happened here in the State of Ohio, and so I think that's what they're recognizing. I think they're recognizing, at least my LPs that are from the coast, they're recognizing that there's a new opportunity here, and that they're currently all standing around the same pond, shoulder to shoulder, fighting over the same three to five fish. Instead, they can come here to this really, really large pond full of fish, and you can just be one of 10, right?

Candice Matthews Brackeen:

You can just reel them in. I feel like that's what I get to do every day. They fight to write checks, right? They're trying to like wine and dine founders. Founders are coming to us.

Candice Matthews Brackeen:

I can take four to six weeks embedded deal. Out in the coast, they've got to write a check in 24 to 72 hours, and that's just not happening, so now, I think my LPs are saying, "You know what? She's got great opportunities there." There are great assets, there are great people to exit to, and we've been overlooking these things, and now with the pandemic and kind of, you've got a great migration of people from the coasts, back home potentially, we are going to get some of those really great people who have worked and understand playbooks of building startups, so we can have our great ideas, we can hire great talent now from the coasts and grow, and I think that's what my LPs are looking for, because like I said, many of them are from outside of the State.

Gloria Ware:

We'll have a number of policymakers, and civic leaders, and folks from philanthropy listening to this podcast that are, or have been interested in this topic of diversity, equity, and inclusion in the innovation, tech, and investing space. What is the risk if we don't take the necessary steps to invest in the untapped potential that exists in our State or the surrounding states? What are the risks that everyone, regardless of your background, your race or gender face for not doing so?

Candice Matthews Brackeen:

I mean, the risk is we keep widening the divide between haves and have-nots. That is the major risk, is that we're not including people in the digital economy, and people are going to get left behind, and I'll tell you what, that's a huge, huge issue when ... People always talk about, "Well, we don't want to have to subsidize people's lives." Well, guess what? When a person builds their own business, they build generational wealth.

Candice Matthews Brackeen:

When you find an entrepreneur and you teach them how to fish, they can feed their family and they can feed others, and these, all these things kind of have a network effect. My advice to many people in philanthropy is look beyond the typical, feel-good story. It is important to make certain that we have less issues with homelessness, sexual assault, children eating, education. All of those things are super, super important to back, but if you can teach a person how to fish and grow a company, they're not going to run into all of those issues, and so that's my hope, is that we can shift some of our philanthropy dollars to building great businesses, where those people hire people, who sometimes look like them, right? I have a really, really diverse team, and all of my team members are paid wages that are on par with other people in their sector, and many of my teammates make incredible salaries and they're helping other people to grow their businesses.

Candice Matthews Brackeen:

I hope that foundations realize that there are some systemic issues in the way that they are distributing dollars. We have gone to many foundations and looked for funding for our fund Lightship Capital, and we were told we're emerging fund managers, and that they don't back emerging fund managers. Well, that's a systemic issue, right? The system is now kind of against people who look like me, because if I can't raise a first-time fund, how do I become a first-time fund manager, and then how am I not an emerging fund without my own wealth, and so there are lots of things that need to be changed and looked at from a philanthropic and kind of foundation level.

Gloria Ware:

One of the excuses that you hear in this space is to the lack of investment in founders of color, women founders is the pipeline issue, difficult finding founders, we've tried, we can't find them, they don't exist. I'd love to hear more about some of the success stories of some of your portfolio companies from maybe from Hillman, but also with Lightship Capital, and just some unique, creative approaches that you're taking to finding these amazing founders in the Midwest.

Candice Matthews Brackeen:

Yeah. We launched a show, online streaming show called Twitch Pitch last year. Obviously, our COVID anniversary date is March 12th. That's when we left the office. After that happened, I looked at the team and I said, "Hey, let's figure out how we're going to help the community."

Candice Matthews Brackeen:

"Let's do maybe a pitch competition, but I need it to be like something that kind of goes on for a while, so let's do companies that go head to head," and they came up with the idea for the name Twitch Pitch. It's 12 companies. They go head to head for four and a half weeks, and at the end, we give out a cash prize. This year's cash prize is $25,000. So far, we've had 48 companies pitch.

Candice Matthews Brackeen:

We've had three season winners, and the first ... Well, now we've had four, but the first three season winners have raised $7.3 million since their show. Last year, we brought in, between all of the programs that we offer, we brought in about 1,400 applications nationwide, and so we don't believe at all that there is a pipeline issue. When you add up all of those groups that we support, that's the majority of the United States, and as far as kind of black founders are concerned, or really specifically people of color, there are plenty of people out there. It's just the ability to look and build meaningful relationships.

Gloria Ware:

As they're looking to fund initiatives or programs that are supporting founders, what should they be looking for as you're evaluating an initiative, or program, or organization that will give them comfort that they'll be successful in not just mentoring and providing TA, and I know you have some thoughts on that, but also just ensuring that they make it to being able to be successfully funded and we disrupt a lot of the inequities that have taken place in the system over the last 50 years in this space?

Candice Matthews Brackeen:

When we first started, we were, and still are Ohio Third Frontier-backed, so we started with a really small grant to pilot our program. The first year, we ended up investing into three companies, one called SoLo Funds, another called Warmilu, and the other was [aleraSoft 00:19:25]. SoLo Funds announced yesterday a $10 million raise, which is really, really exciting, and so for us, the valuation that we got in at versus the valuation that there is now, it ends up being kind of like a 5 to 6X markup, and so we are not a social impact fund, but you can make great money investing in minority companies. For us, if there's a foundation that's interested in investing in this space, really philanthropic dollars, what they have to really think about is, "How do we help that organization over time build capacity, not only with our own dollars, but maybe with some partners?" What happens a lot of times with foundations is they have [bunny 00:20:11] foundations that they co-invest with as well, and so they're building kind of stronger communities, and so I think it's important that people are really deliberate about their grant investments to help build capacity.

Candice Matthews Brackeen:

When I started, it was myself and a Venture for America fellow. We are now 15 people between our foundation and our fund, and so it takes a long time to get there, but you have to have great partners, and foundations need to think about how they're going to work with an organization over time. We have some partners who've been with us from the beginning, like Ohio Third Frontier, and the Surdna Foundation, and JPMorgan Chase. We have others who have come and gone and worked on smaller projects that we were doing, but I think that being deliberate with what you are looking out to do in helping minority-led organization's capacity build, I think that that has been one of the biggest kind of help to us as an organization. We would not be able to do everything that we do today without the long-term support of some of the foundations that help us out.

Gloria Ware:

When you say long-term, can you give us a specific time frame?

Candice Matthews Brackeen:

For us, it's really multi-year grants, because the grant cycle is very difficult, and so I get starting with a one-year grant, but then, moving that group to maybe a two or three-year grant is helpful. We've been around for five years and we do not ... This is our fifth year. We don't anticipate that Chase Bank's going to be with us for 10 years. At that point, my goal is to make certain that we are self-sustaining and that we are able to kind of build a larger endowment from the work that we do and grow the company into kind of multiple locations throughout the country, but if an organization can help you out for three to maybe five years, that's going to give them the ability to grow and thrive over time, and really solve the issue that they set out to build at the outset.

Gloria Ware:

You've got some exciting new partnerships in other parts of the Midwest, you're doing some things in Indianapolis and Detroit. I'd love to hear more about those partnerships and maybe what was some of the pitch that you received from some of those states to be more active in their regions.

Candice Matthews Brackeen:

Yeah. The nice thing in Indianapolis is that there's a gentleman named Bob Coy, who used to be the CEO of CincyTech, and so he reached out to us and said, "Hey, we heard you're really interested in Midwest tech."

Gloria Ware:

Ah, yeah. Okay.

Candice Matthews Brackeen:

"Would you ever consider opening an office here in Indianapolis?," and that he did was he gave this amazing tour of what's happening in Indianapolis, and we can see all of the great assets not only from the universities there, but then some of the large companies that support that particular ecosystem. That's how we ended up in Indianapolis. Our office actually opens there in March. We'll be hiring a junior associate to work there. We'll be offering office hours and some programming.

Candice Matthews Brackeen:

In Detroit, last February, a member of the team at Delta Dental ... Delta Dental of Michigan, Ohio, and Indiana reached out to us because before all of this social unrest happened, they had interest in supporting us, and so they reached out and said, "Hey, we heard you're raising a fund. We'd love to be able to be involved," and then they learned more about the things that we were doing on the foundation side, so they made a $1.8 million commitment into the work that we do, some into the fund and some into programming, and that's going to allow us to do work in Michigan, Ohio, and Indiana, most specifically in Detroit, Indianapolis, Toledo, and Cleveland, so we'll be offering some bootcamps and accelerator, and a little bit of our kind of Twitch Pitching program in those areas.

Gloria Ware:

Well, we know that many of our partners, and civic leaders, and policymakers, and funders are listening to this. Maybe is there one last thing, Candice, that you feel that opportunities that you see for the State of Ohio to really move the needle in leveraging the immense amount of talent that exists in the State? What would that be, and then what role could Lightship play in catalyzing that type of activity and engagement? I mean, we have Detroit and Indianapolis courting you. Ohio, we need to make sure that we are right there with them, so what are some gaps that you see that exist in the State and some opportunities for us to level up?

Candice Matthews Brackeen:

Yeah. I know that sometimes it's difficult to make a stand around minority business, but I think it's now is the right time if we're all reading the room correctly. Now is the time to support black-owned business. Now is the time to support minority-owned businesses, but really, I'm going to say that again, now's the time to really fix the disparity that we have for black people in the State of Ohio. While I do support lots of different companies, we have quite a diverse portfolio, I would love to see the State take a stance on black-owned businesses, and to support the organizations that are already here and building within the communities.

Candice Matthews Brackeen:

It's really sometimes difficult to see the importation of accelerators, the importation of other incubators from outside entities who don't necessarily understand or culturally competent within our neighborhoods, and so how do we do more of supporting and building capacity for those people who have small grassroots efforts? If I had not gotten the support here in Cincinnati from Bob Coy, Mike Venerable and others, Wendy Lea, from our ecosystem partners, I wouldn't be where I am, and I'd love to see my peers in Cleveland, Columbus, Dayton, Toledo see that same level of support, or allow us to expand to additional cities and support them where they are. That's what I would really like to see. I would like to feel heard. I would like for ...

Candice Matthews Brackeen:

I only do this work for my portfolio companies. I don't need for people to like have the church of Candice. That's just not important to me. It's important that my companies win. I talked about SoLo Funds and where they are right now at that $10 million raise.

Candice Matthews Brackeen:

They're in Los Angeles. Why? Because the funds were there, and they couldn't build their business here, and so while I love them from afar and I wish them all the best, I do wish it was an Ohio-based company. We have great FinTech assets here in the State, and so I truly believe we just really need to put a flag in the ground and say, "We're going to stand for minority businesses long-term, and we're going to grow out the assets that we have here to help do that support."

Gloria Ware:

For someone that might be listening that wants to learn more about what you're doing and getting involved, what's the best way to connect with you and/or a team member?

Candice Matthews Brackeen:

Yeah. We are at lightship.capital. That's C-A-P-I-T-A-L online, and I'm @CandiceBrackeen everywhere, so that's Candice, C-A-N-D-I-C-E, Brackeen, B-R-A-C-K-E-E-N on all social media.

Gloria Ware:

Thank you so much, Candice. This has been a wonderful discussion, and I'm sure it will be well-received, and I look forward to all of the exciting activity taking place in the Midwest, but in particular, some new things happening in Ohio in 2021 and 2022 and beyond.

Candice Matthews Brackeen:

Thanks, Gloria.

Ray Leach:

I'm glad Candice was able to join us for this conversation. She's doing incredible work to bring meaningful economic growth to the Midwest, and her perspective on advancing equity and venture capital is invaluable. I'm Ray Leach. Thanks for listening to Innovation In Equality. Don't miss our next episode when Lauren Washington, co-founder of Fundr and Black Women Talk Tech joins us for a conversation about moving the needle on a more equitable tech economy.

Ray Leach:

Consider subscribing wherever you listen to podcasts, and if you would, please help us out with a great rating and a quick review. Innovation in Equality is a production of Evergreen Podcasts. Thanks to our producer and audio engineer, Dave Douglas and co-producer, Vicki McDonald.

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