Although most investors like to keep their ideas close to the vest, Jamison Hill of Base10 Partners in San Francisco said that he hopes others follow his firm’s lead.
“We want to be copied,” Hill said. “We want other firms to do what we’re doing.”
What Base10 Partners is up to is announcing its intent to donate 50 percent of its newest fund’s carried interest directly to Historically Black Colleges and Universities.
Base10 is also creating a year-long, on-campus training program for HBCUs along with internship and full-time placement services for students, focusing on software engineering, design, entrepreneurship and venture capital. Hill said Base10 is working with the Black Venture Capital Consortium to recruit engineers and others to serve as mentors.
“I hope this is transformational,” said Hill of the firm’s plan to donate half of its profits and help HBCU students with job training and networking. “I spend all day long thinking how to efficiently deploy capital, and this support to HBCUs will certainly help augment the underrepresented talent throughout tech.”
The unusual pledge to donate half of its carried interest is tied to Base10’s new fund, a growth-focused vehicle called Advancement Initiative. The $250 million fund, announced today, will invest in pre-IPO companies and has already backed eight, including Plaid, Brex, Attentive, Nubank, KeepTruckin, Wealthsimple, CircleCI and Aurora Solar.
The new vehicle is in line with the imprint Base10 has made since it was founded in 2017 by Adeyemi Ajao and TJ Nahigian. At the time, when it debuted with a $137 million early-stage fund, it was considered the largest fund by a Black-led firm. The firm then followed up with a $250 million early-stage fund last year and along with that unveiled a Diversity Pledge to donate 1 percent of its operating profit and 1 percent of its carry to fund organizations fostering diversity.
Hill, a partner at Base10, said the new fund’s strategy resonates with entrepreneurs and LPs alike.
For instance, Attentive, a provider of a mobile messaging service, raised a large round in March led by Coatue. Company chief executive Brian Long was so impressed by Base10’s commitment to donate half of the new fund’s carry that the company expanded its round to include Base10, the only new investor in the round.
HBCUs as LPs
In addition to benefitting the HBCUs, collectively as a group they are a significant LP in the new fund. Notable HBCUs that invested include Howard University, Florida A&M and Tuskegee University, among others.
Other partners for the Advancement Initiative fund include MacArthur Foundation, Public Welfare Foundation, Sorenson Impact Foundation, KFF, Silicon Valley Community Foundation, The McGregor Fund, Plexo Capital, The Harry and Jeanette Weinberg Foundation and the Kapor Foundation.
HBCUs, which service primarily the African-American community, do not operate large endowments and are not typically seen as LPs in venture funds. HBCUs typically have $15,000 on average in endowment per student, compared to non-HBCUs that have $410,000 on average in endowment per student, according to the US Government Accountability Office.
Frederik Groce, a recently promoted partner at Storm Ventures and co-founder of BLCK VC, a nonprofit devoted to boosting Black investor representation, said the role that Base10 is engaged in to expose more people to venture and tech will have long-term effects.
“What Base10 is doing is a great way to begin to build networks at these schools for tech start-ups and venture firms,” Groce said. “Pulling the HBCUs into this universe is significant and will create more opportunities across the venture landscape for years to come.”
Groce added that he’s heard of other top tier venture firms that are exploring working with HBCUs. “The schools are getting invites, which is a good thing.” he said.
Hill is working on the growth fund alongside new operating partner Laura Weidman Powers, who was previously founder of Code2040, a nonprofit that placed women and underrepresented minorities in tech companies, and principal Luci Fonseca, who joined Base10 from McKinsey & Company, where she helped establish the firm’s Institute for Black Economic Mobility.
Hill, a Harvard University graduate, came over to Base10 in March after seven years at Bain Capital Ventures, where he led deals in marketplace and fintech companies. For Hill, Base10’s outreach to HBCU’s struck a personal chord and was the push for him to join the firm. Following the deaths last year of Breonna Taylor and George Taylor, which sparked social protests that summer, Hill said he felt despair and was looking at how capital plays a role in racism.
During the Christmas break, he talked to his dad, who was in high school when it underwent desegregation. His dad later went to an HBCU, North Carolina Agricultural and Technical State University.
“I asked my father about his college experience, and he said he wouldn’t have gone to college if it wasn’t for HBCUs, and it changed his life,” he said.
He added that he joined Base10 to lead the new fund “because an HBCU made it possible for my father and my family to achieve the American Dream.”