WATCH: Fearless Fund Founders Want To Help Close The Wealth Gap From African-Americans

essencemagazine

Headquartered in Atlanta, the Fearless Fund founders Arian Simone and Ayana Parsons look for &quot;unicorn companies&quot; to invest in.

Transcript

00:00 I think that professional women sometimes get that image

00:03 that they don't like to have fun,

00:04 but I can tell y'all both do.

00:06 So what's that song you just said

00:07 that makes you feel good, makes you feel empowered,

00:09 makes you feel like I can step in here in the Fearless Fun

00:12 and just have a great day?

00:13 - "Lotta" was given.

00:14 - Yay!

00:15 - Okay, okay.

00:16 - See, love that.

00:17 (upbeat music)

00:21 - We're in the Fearless Fun Summit in ATL.

00:27 Can you guys let me know what we can expect today,

00:30 what we're gonna be seeing just throughout the venue

00:33 for the rest of the day?

00:34 - There is gonna be a lineup of special guests

00:36 and it looks like pop culture meets venture.

00:38 And the reason why,

00:39 these are people who most of the audience will know,

00:42 but what they do not know

00:43 is that they actually have a role in venture capital.

00:46 They are investors, they are business owners,

00:48 and they also acquire businesses, some of them as well too.

00:51 But majority of the day,

00:53 you will see our portfolio companies

00:54 share about their businesses

00:56 as well as our investors and our partners

00:58 share about their role with us.

00:59 So it's a full day of venture education,

01:02 entrepreneurial education,

01:04 and just education as a whole about being an investor.

01:06 - You all are headquartered in ATL, correct?

01:09 What makes this city so special?

01:11 Because you see other venture capital firms

01:14 being positioned in other departments, other areas,

01:18 but what makes ATL so special to both of you all?

01:20 - Well, listen, the A is the black Mecca.

01:23 You know, black people are starting businesses

01:24 at a higher rate than any other demographic,

01:27 specifically black women.

01:28 This is where all black women and brown women

01:31 are starting those businesses.

01:33 So it was very important for us to be intentional.

01:36 Intentionally here in the A, for our headquarters,

01:39 our team is located all across the country,

01:42 but our business is founded here for us, by us,

01:45 and that will always be the case.

01:47 - Do you all see a lot of Atlanta-based companies

01:52 come to you all, or is it just worldwide?

01:54 What is some of your clientele that are, you know,

01:56 people that would hope to be your clientele?

01:59 - We receive applications,

02:01 not just nationwide, but worldwide.

02:03 - Okay.

02:04 - There are areas where we do see talent

02:06 that's concentrated.

02:07 - Right.

02:08 - The Southeast and Atlanta is one of those areas.

02:10 Any area that's highly populated with women of color,

02:13 we're gonna have an influx of applications from them.

02:16 So we definitely see talent from all over the world,

02:19 but yes, there are certain areas

02:21 that are more concentrated than others.

02:23 - Absolutely, absolutely.

02:23 - So for fun, we invest in consumer packaged goods and tech,

02:27 and we have founders in Atlanta that we've invested in

02:30 that are starting businesses in both of those spaces,

02:32 and I think that will continue to be the case.

02:34 - As black women in this space,

02:35 I know that you guys have probably had to deal with backlash

02:38 just because it's one of something that's very niche.

02:42 How do you both handle that?

02:43 How do you just kind of just shake it off

02:45 and not really deal with being kind of one of the only,

02:48 or one of the only venture capital

02:50 woman of color owned spaces?

02:53 - Yeah, I mean, we are pioneers in this space,

02:55 and we've quoted Vice President Kamala Harris

02:59 that we may be the first,

03:00 but we certainly won't be the last.

03:02 And it's gonna take hundreds and thousands

03:04 of fearless funds to close the wealth gap

03:07 and really drive economic freedom in this country.

03:10 So for us, we just keep our eyes on the prize.

03:12 We know we're here for a higher purpose.

03:14 We've been at this for four years, almost five years.

03:17 And for us to be attacked after doing this work,

03:21 while it's disheartening, we know that we're built for this.

03:25 - Absolutely, absolutely.

03:26 I feel like very much similar to when you start a business,

03:28 you really have to have a strong backbone.

03:31 For you all, venture capital,

03:33 how important is that to know just what it is

03:35 as the black community?

03:37 I was just having a conversation earlier

03:38 how sometimes we feel like we don't have any help

03:40 or it's very hard for us to get help.

03:42 So how important is venture capital

03:44 when starting your business?

03:45 - Venture capital is very important

03:47 if you plan to be a unicorn business.

03:50 There's other funding options out there.

03:53 I wanna be very clear about that.

03:54 That may be your funding solution

03:57 in addition to looking at venture capital.

03:59 There's still other options.

04:00 There's always the healthy $15 million revenue business

04:04 that may not need venture capital.

04:07 Venture capital is for high growth businesses.

04:10 It's aggressive.

04:11 We're looking for businesses that can grow

04:12 and scale at a rapid rate.

04:14 Not just at your own leisure.

04:16 So venture is not for everybody,

04:19 but is it important?

04:21 Very much so.

04:23 So important that it's one of the biggest drivers

04:25 in building generational wealth in this country.

04:28 That's how important it is.

04:29 - And if I could build on that.

04:31 So historically we thought of unicorn companies

04:33 as a billion dollars in revenue and more.

04:35 When we look for companies to invest in,

04:38 they've gotta be able to return the fund.

04:40 And what do we mean by that?

04:41 So our first fund was a $25 million fund.

04:44 So if we make an investment in a company

04:46 and we've invested in over 40,

04:48 they have to be able to generate 25 million in revenue

04:52 or more in a short amount of time.

04:54 So now as the stakes are higher

04:56 and we're raising fund too,

04:58 they need to be able to generate a hundred million

05:00 in revenue to be able to exit.

05:02 And that means get acquired by another company,

05:05 acquired by maybe private equity or even go public.

05:09 - Yeah, yeah.

05:10 That's a really good point.

05:11 What you said about not every company

05:13 needs to go venture capital,

05:15 but it's about what the scale of your business is.

05:17 I don't think I even knew that.

05:18 So that was great.

05:20 Do you feel like it's necessary to go this route?

05:22 So if you do wanna scale your business,

05:24 is venture capital where you should start

05:26 or what does that process look like?

05:29 - Yeah, I mean, there's so many options.

05:31 So venture capital is equity-based financing.

05:34 So what that means is we take an ownership stake

05:36 in your company to help you scale and grow.

05:39 There's also so many options.

05:41 I mean, we have a grant program through our foundation.

05:43 This is essentially free money

05:45 to help you grow your business.

05:46 There's also something called debt-based financing, right?

05:49 So you can get loans to help you grow your business.

05:51 Now you pay those back.

05:53 And certainly with venture, it is incredibly risky.

05:56 And when we place a bet on an entrepreneur,

05:58 we expect to have a return on that investment.

06:00 So the stakes are even higher,

06:02 but that's just a range of ways.

06:04 I mean, black and brown women have been bootstrapping

06:07 since the beginning of time.

06:08 We have both done it ourselves as entrepreneurs

06:11 and just done it with our own money.

06:13 So that is also an option as well.

06:16 - So with you all saying,

06:19 when you kind of tap into this venture capital,

06:21 we're expecting you to scale your business at a fast pace.

06:23 What are some of those businesses you are sort of seeing

06:26 come into your portfolio that are being successful?

06:28 - All right, Slutty Vegan, Lip Tinted, we've got a bunch.

06:32 - We have so many,

06:33 and they've also been featured on Essence.com.

06:35 - Absolutely, yeah, yeah.

06:36 - She said Slutty Vegan, Lip Tinted, The Lip Bar, 13 Loon.

06:40 The list goes on and on.

06:42 Partake, we have been blessed

06:45 to be able to back a lot of the hot

06:47 women of color startups that are out there.

06:49 - Yeah, yeah, I love that.

06:50 If you're looking to start a business,

06:52 what is some advice you would give someone?

06:54 And I'm sure you get this question a lot,

06:55 but just particularly for the Essence audience

06:58 who are entrepreneurs,

06:59 who come to Essence Fest with businesses and ideas.

07:02 What is just some advice

07:03 you would specifically give the Essence audience

07:05 if they're looking to start their business?

07:07 - I would start with playing with the end in mind.

07:09 You need to know what your end game is.

07:11 Are you looking to have your business get acquired?

07:14 Are you looking to go public?

07:15 Because then every step you take will dictate that.

07:18 So you wanna make sure that you know

07:20 what your end game is at the start.

07:22 - The other thing that I will say,

07:24 a lot of entrepreneurs have conviction.

07:26 So you need to have conviction

07:28 and that passion to start a business,

07:30 but you also need to have a level of agility.

07:32 And what I mean by that is,

07:33 there are times when you might have

07:35 to pivot your business model.

07:37 The economy does its thing, it goes up and goes down.

07:40 And the more agile you can be and pivot when you need to,

07:43 that's when I think we've seen incredible success

07:45 with some of these entrepreneurs.

07:47 - Then last question, a little fun one.

07:48 What is a song you just love to get ready to?

07:51 I think that professional women sometimes get that image

07:55 that they don't like to have fun,

07:56 but I can tell y'all both do.

07:58 So what's that song you just, that makes you feel good,

08:00 makes you feel empowered,

08:01 makes you feel like I can step in here in the fearless fun

08:03 and just have a great day.

08:05 - "Lotto is Given."

08:06 - Yay!

08:07 (laughing)

08:08 - Okay, okay.

08:08 - We love that.

08:10 What about you?

08:11 (laughing)

08:12 - Okay, y'all gonna laugh at this one,

08:14 but I'm a big sports fan and I love me some Coach Prime.

08:19 So when he came out with, who was Swag?

08:22 - Yep, okay.

08:23 - Right?

08:24 - Yeah, yeah, yeah, yeah, yeah.

08:24 - I used to wake up to that every single morning.

08:28 So if you wanna know my hype song, this is Coach Prime.

08:31 - Well, I'm from the South, so I appreciate that.

08:33 Thank you ladies so much for talking to Essence Magazine

08:36 and we look forward to seeing the day.

08:37 (upbeat music)

08:40 (upbeat music)

08:43 (gentle music)

08:45 (upbeat music)

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