Relevance Ventures, an early-stage investor based in Tennessee, says Native American-led companies often don’t know they can approach independent investors even in the very early stages. But for many Native Americans, the venture fund said, it’s unthinkable to seek funding outside of their tribe.
Relevance hopes to change their minds.
Dean Newton, general partner at Relevance, said the venture fund has prioritized outreach to Native American founders.
“This has been something we’ve been actively pursuing since the year started. The venture space for Native Americans tends to be tribal-dominated and part of that is cultural, where many Native people think of businesses in a tribal context, in a communitarian context, so it’s part of their initial thought process to think of going to the tribal government to create a business, as opposed to the venture capital route,” Newton said.
He added venture capital should not be closed off to companies founded by Native Americans and that tribal funding and venture can coexist.
Founded by Newton’s brother Cameron, Relevance invests in health and wellness, fintech and enterprise software companies. The firm looks at Series A and B sizes, and is in the process of raising its fourth fund, targeting $75 million, from which it has begun investing. Relevance began as a public-private partnership with the state of Tennessee. It raised $12.5 million for its third fund.
Some of its portfolio companies include meal kit subscription brand Sun Basket, apartment services platform Rent Ready, and telehealth provider Qler Solutions.
The Newtons are members of the Patawomeck Indian Tribe of Fredericksburg, Virginia.
Newton said Relevance is pushing for more education for Native American entrepreneurs to become more familiar with the venture world.
“There are a number of Native people who are going the more traditional entrepreneurial route and just don’t know that venture capital exists, and that’s really where we think we can be helpful”
He recalled reaching out to a company, run by a Native American woman, that sells the fermented drink kombucha. The woman thought he was a regular customer until he explained he was a potential investor.
“We respect the tribal structure and the desire to keep a communitarian view of the world, but I also believe that there are a number of Native people who are going the more traditional entrepreneurial route and just don’t know that venture capital exists, and that’s really where we think we can be helpful,” Newton said.
Native American LPs
Several tribes have acted as limited partners for other funds. For example, the Poarch Band of Creek Indians, the Mdewakanton Sioux Community, the Pechanga Band of Luiseno Indians and three other tribes acted as LPs for Doradus Partners, a real estate investment copy.
In addition, venture funds, such as the Native American Venture Fund, have links to tribes and work with them to invest in various businesses.
Newton’s brother, Relevance Ventures founder Cameron Newton, said their goal is to encourage more people to approach VCs outside of tribes as well as start their own funds and create a larger ecosystem for Native American start-ups.
“The most impactful thing we can do for Native Americans is to build a really successful venture fund, because then people will correlate and say, ‘If you can sit on that side of the table, what about the other side of the table? So we’ll be on the other side of the table or build another fund.’ So raising the profile of Native Americans in venture, I think is one of the biggest things we can do,” he said.