Friday Letter: Why the MaC Venture Capital fund is a big deal

The firm has raised $110m for its inaugural seed-stage fund to invest in visionary founders who are leveraging shifts in culture and behavior. And LPs are on board with the oversubscribed fund.

In April 2017, I spoke with Marlon Nichols, general partner of Cross Culture Ventures, about what he was up to and how his firm was doing.

Fast forward four years, and I’ve checked in with Nichols again as he has something new to talk about. He and his partners late last month announced the launched of a $110 million, oversubscribed fund for MaC Venture Capital.

MaC is the result of a 2019 merger between Cross Culture Ventures, co-founded by Nichols; M Ventures, co-founded by former Washington, DC mayor Adrian Fenty; former William Morris Agency talent agent and operator, advisor and investor Michael Palank; and MACRO founder and CEO Charles D King, who was the first Black partner at a major Hollywood talent agency.

The firm, with offices in Los Angeles and Palo Alto, California, is a seed-stage investor that looks for entrepreneurs in non-traditional tech hubs, such as Bentonville, Arkansas, where its portfolio company Ox is located. The start-up develops retail fulfillment software that employs augmented reality tech.

The firm employs what Nichols called a cultural investment framework to invest in sleepy industries, as it zeroes in on business and consumer trends to help identify start-ups in various sectors that are leveraging shifts in culture and behavior.

MaC is also garnering plenty of attention for who they are investing in. Though Nichols tells Venture Capital Journal that they are not a diversity fund, MaC has already invested in 26 companies to date. And 76 percent of the firm’s portfolio is led by Black, Latinx and female founders.

Marlon Nichols, MaC Venture Capital

Nichols said the firm uses a wider lens than other VCs on entrepreneurs, so their backgrounds and demographics they represent are more diverse. Basically, a diverse fund without being a diversity fund.

“We invest without bias,” Nichols said. “We’re trying to invest in the best founders.”

Among the other companies it has backed is BlocPower, a climate tech start-up in Brooklyn founded by Donnel Baird. In February, BlocPower closed a Series A fundraising round, including $8 million in equity and $55 million in debt, to build a technology and financial platform that retrofits apartments and houses with lighting upgrades, solar panels, smart thermostats and other clean technologies.

But it’s not just the firm’s partners or who they are investing in. Another reason I’m highlighting MaC is who their LPs are. Many, including myself, have said that changes to venture capital and their approach to finding and funding diverse entrepreneurs, will only happen when the institutional investors are on board.

MaC has the LPs. These include Foot Locker, Goldman Sachs, Greenspring Associates, Bank of America, Howard University, MacArthur Foundation, the University of Michigan, State of Michigan Retirement System, Mitch and Freada Kapor, venture capitalists Theresia Gouw and Jason Green, among others.

No surprise to Nichols. He points out the firm’s four founders have collectively invested in more than 135 companies, including those with notable exits, such as Gimlet Media and Walker and Co.

Imagine where Nichols and his partners will be in four years from now.

Tell me what you think. And if you have any questions or comments about MaC Venture Capital or any other venture trends, let me know. You can drop me a note at agoldfisher@buyoutsinsider.com.