Funding Black Colleges and Universities

Venture firm Nex Cubed announced today the launch of the HBCU (historically Black college and university) Founders Fund, with a $5 million investment from Costco Wholesale, which now joins as an anchor investor. The fund, which is a $40 million accelerator, seeks to foster and invest in startups where at least one founder is an HBCU student, alumni, or faculty member.



Before the fund, Nex Cubed launched a pre-accelerator program at various HBCUs to help aspiring entrepreneurs affiliated with the institutions find resources to scale their startups. After the program’s success, the firm spun it out as its own 501(c), attracting the likes of AT&T, Mastercard and Verizon as partners to help the program expand to more than 70 HBCUs.
“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.”
Evans said the limited target partners for this fund are corporations and foundations and says many have sought to commit as an extension of their previous diversity, equity and inclusion promises. From this, the HBCU Founders Fund also hopes to tap the talent and executive workforce of its LPs to serve as mentors and advisors to those within their upcoming portfolio. “We are proud to partner with the HBCU Founders Fund to help foster a more inclusive venture capital environment and accelerate Black entrepreneurship,” Richard Galanti, executive vice president and CFO of Costco Wholesale, told TechCrunch.

HBCUs could use a little more love regarding the incubation of talent and investment potential. There are more than 100 in the U.S., and many lack the same infrastructure or educational and professional opportunities associated with predominantly white institutions (PWIs). HBCUs are responsible for a quarter of all African American STEM graduates, with North Carolina A&T State University, Howard and Spelman College as some of the top STEM-graduating universities. Their endowments are paltry compared to legacy PWIs, and that has an impact on students.
 
Applications are now open for those wishing to apply to the HBCU Founders Fund.
https://www.nex3.com/hbcu-founders-fund/#applynow
 
Evans expects the fund to close by the end of the year and plans to deploy the capital through cohorts, with the idea to invest in about 20 companies per year across two cohorts — one in the spring and one in the fall. With that, he expects most of the capital to be deployed within four years, with reserves for follow-on funding.
The fund posed a solution quite contrary to what usually happens within venture. Instead of telling people to switch schools, to move locations, to do this and to do that, Nex Cubed went to them, disrupted their networks, and broke down their own access barriers to find what’s next. Evans said he hopes to donate a percentage of the fund’s carry back to the pre-accelerator to continue fostering, supporting, and thus creating a pipeline of talent.
 
 
Tech Layoffs

For years, tech workers enjoyed a seemingly unparalleled level of job security. Now, tech companies across the industry are laying off thousands of directly employed and contract workers. What does this mean for the future of the tech industry and the workers that make it all happen?

Layoffs Present Diversity Challenges

Along with my concern for them is my concern closer to home for the thousands of Black American students and workers who don’t have a workstation in the tech industry. These persons suffer from the one-two punch of not being trained, recruited, and hired on the front end and now find themselves facing the same job competitors once again. Sixty-eight percent of the demographic makeup in big tech is white, according to the U.S. Equal Employment Opportunity Commission (EEOC), and men in the sector make up around 64% of the industry.

The economic downturn contributes to companies making draconian layoffs which worsen the existing diversity problem across the industry. Staff people and those working for contactors that typically get cut first are minorities. Loss of diversity in the tech space has significant consequences in reducing productivity, impacting market competitiveness, and damaging company morale. Lack of diversity translates directly into the technology solutions needing to be developed. If these solutions are not designed by a culturally and racially diverse work group, they risk being applied without concern for impact on a broad community of users and affected customers as we have seen in consumer financial markets and health care for example.



THINGS ARE CHANGING, it may not be as bad as you think

Since the first rounds of layoff’s were announced, it became clear that the condition under which H1B visas were given is that in the event of job, recipients must find another sponsor and employment within 6 months or leave America. Since the start of the year, 297 tech companies laid off nearly 95,000 workers, according to data compiled by Layoffs.fyi, a website that's been tracking tech layoffs since March 2020. For those who have been in the US for several years and in some instances up to ten years, having to pull up their American roots and lifestyle to which they have become accustomed, sell homes, and pull children out of school, 180 days would pass quickly. Lobbyist went to work and now extensions are being granted. But the sky isn't exactly falling in the tech industry. The Foundation for India and Indian Diaspora Studies launched an aggressive effort to give H1B visa holders more time. Nonetheless there is a glut of highly skilled guest workers out there.

One of the biggest myths surrounding the program is that it fills labor shortages. While this was Congress' intent for the program, the U.S. Department of Labor has botched its implementation so badly that H-1Bs are regularly used to replace US workers. U.S. Department of Labor has the statutory authority to fix its glaring mistakes. It's way past time for the Biden administration to act. Before the pandemic, the tech industry was steadily growing. As investments in cybersecurity, cloud computing and artificial intelligence poured into companies, their need for employees grew.

In the five years leading up to the pandemic, the tech industry added 1.3 million workers, according to an analysis of Bureau of Labor Statistics data by CompTIA,  an information-technology trade group. So, 130,000 –150,000 out of work mostly Indian tech workers hitting the Indeed website may only be a hiccup. Laid off workers are changing fields and absorbed in other sectors with overall tech skill demand high, this too shall pass.