Why showing up is as hard as raising capital for black founders
Ever since I was a boy, I wanted to be a successful businessman. I vividly remember trying on my dad’s oversized pastel suits, donning the ubiquitous business look of any perfectly dressed 90s African man. Before I could even form full sentences, I was prepared. and pushed to work in business. With great motivation and determination, my actions were encouraged by the relentless applause of my mother who shouted: “You are a king, Solo!
A little over a year ago, I made a bet on myself. A bet that a then 26-year-old black kid could make something out of nothing. And while you might call this trip pretty much anything but easy, the reality is that raise $26 million with Calaxy has been the easy part. The sacrifices I’ve made, the friends I’ve lost, the lack of idols to look up to, and the decision to step into a world of uncertainty are invariably more difficult for those like me. From having to over-justify my qualifications to reassuring my overly worried parents, black entrepreneurship remains a challenge.
Prior to joining Calaxy, I had the privilege of attending the prestigious Wharton School of Business and eventually landed a job in investment banking on Wall Street. Things were solid early on, but as the big league novelty started to wear off, so did the rose-tinted glasses. I soon realized that my individuality and my identity – my blackness – was something that would hinder long-term success, contrary to my mother’s persistent declarations of pride. People often assume that the hardest part of the financial job for someone like me is the job itself when in reality, that was the least of my worries.
There is a collective overestimation of the untouchability and awesomeness of society’s elite. There are plenty of brilliant minds on Wall Street, but there’s also an abundance of “ordinary” people capable of achieving their professional and financial goals. The most personally difficult facet of working in finance on Wall Street was simply life itself – life as a black man, that is. I didn’t know what the Hamptons were. I didn’t own formal attire for black tie parties. I had no family ties in the industry that could offer advice or employment, which kept me well and truly out of the island cliques. It was almost as if I could be judged for taking the hardest road to get to the same place, despite the fact that mainstream storylines often profess otherwise. Maybe this only applies if you’re white? Once I came to the conclusion that the career paths of my superiors were inevitably inaccessible to me, I knew it was time to go… to pursue my own success without the limitation of outdated systems.
The hardest part of leaving my lucrative job on Wall Street was the fact that I still had family financial responsibilities. Instead of taking my first big paycheck and throwing it in a Rolex and European trips like many of my colleagues at the time, I bought my little brother his first car and paid for his high school tuition. . While I did these things with great pride, I felt like my co-workers were alienating me for decisions like this. Living as a social pariah on the periphery of Wall Street made the job, which was supposed to be the easy part, incredibly difficult. This was just one example of how the difficulty of this role was never about the job, but about the implications my background had on the viability of their career. Career success is often a one-way street with no escape plans. For black people, this job, this degree and this education will inevitably mean more to us as young black professionals, since these things are usually a rare chance to rewrite the narrative for ourselves.
Before leaving Wall Street and co-founding Calaxia, I was a securitization banker with the opportunity to focus on many product areas, including residential and commercial real estate, as well as US credit. I’ve always been the type of person to look for concrete applications for the things I’ve learned, and securing was no exception. Due to the high attrition rates of the product areas I have worked in, I have learned and done more than the average 24 year old. In 2018, my older brother introduced me to one of his closest friends, Spencer Dinwiddie, NBA star and blockchain enthusiast. Through this introduction and the formation of a three-man team, we organized the concept of securitizing Spencer’s NBA contract and, unknowingly at the time, initiated my departure from legacy finance.
In 2019, I served as an advisor to Spencer, who became the first player in NBA history to go securitized after a long battle with the Association. He put his contract on the blockchain and sold tokens to his fan base in what was structured to be a pseudo-cash advance. With this framework, Spencer was able to partially unlock funds in his contract, while his fans were able to hold a more direct interest in Spencer and earn an additional return. This act of securing has been the catalyst for our team realizing the endless use cases of blockchain technology. Spencer saw an opportunity to build a platform that more evenly transfers value between fans and artists without the need for a third party or middleman. Thus, Calaxy was born.
Entrepreneurship requires a support system. The people who get up every morning and check on you are probably the most important factors when calculating the viability and success of your business. Anyone who has ever independently ventured into the unknown understands the value of supportive and caring family and friends to build trust as their business grows. In the case of many black founders, their families are predisposed to choose safety and comfort over pursuing a risky dream. Black people, who are arguably the most creative people on the planet, are often discouraged from creating professionally given that their circumstances would lead them on average to choose the conventional 9 to 5. It is not surprising, considering this along with the other systemic challenges we constantly face, that less than two percent of over 400 American unicorns startups in the past 10 years have had black founders.
In the months leading up to my departure from Wall Street, I had many conversations with loved ones and the feedback was surprisingly consistent. I would be greeted with an awkward, “Oh really? Looking to get away and go out alone? I’m happy for you, but have you thought about what you’ll do next?“It was almost as if the approval I got was based solely on my ability to beat the odds up to that point in my life. In that case, I got a yellow light at best from those who surrounded me.
The hardest part of black entrepreneurship is manifesting. The journey I had to travel and the inhibitions I have to ignore to even start building something is where the biggest battle is. While there has been a concerted effort by many VC funds to support black founders, the reality is that none of these solutions can rectify the inherent inequality that exists in their personal lives. Announcing that you have $100 million allocated to support the next generation of black entrepreneurs is great, but what good is it if the majority of talent is hampered by their own cultural thought systems and another generation of potential black founders won’t ever choose to embark on the journey? Counterintuitively, this reality becomes truer for top performing black talent given that they have learned to rely on safety nets. Not only is it hard for black founders to show up, but it’s also almost like there’s some undetermined amount of adverse selection as the cost-benefit analysis seems crazy the more accomplished you become.
Black entrepreneurship is beautiful. It is significant. It’s intentional. It’s authentic. The reality is that there is still an inconceivably long way to go before all the playing fields are leveled. A recent McKinsey Report that I read says: “…too often these and other barriers lead to gaps – only 4% of black-owned businesses are still in business after three and a half years, compared to an average of 55.5% for all businesses.” This statement in itself speaks volumes.
Although a truly equal playing field can never be achieved, Black is still powerful beyond measure. Everything I mentioned above can be taken as an allegorical reference for all other aspects of life as a black person. Just as we have done and continue to do, Black will find a way to win even if the odds are against us. I always thought my initial success was because my mother knew I was a “king” who happened to be black. Maybe it’s because I’m black that she knew I would become a “king” regardless.