A Grand Rapids-based venture fund aimed at boosting businesses owned and/or led by people of color in West Michigan just got $1 million from a private foundation.
The New Community Transformation Fund (NCTF) said Wednesday, Dec. 22, it received a $1 million investment from the Wege Foundation, marking the first capital raised for the fund from a private foundation.
With the investment, NCTF has raised $9.75 million since it was established in January 2020, putting it just $250,000 shy of its $10 million goal — the amount of capital raise necessary for the fund to make its first investments in businesses owned by people of color.
The Wege Foundation, founded in 1967 by Peter Melvin Wege, son of Steelcase co-founder Peter Martin Wege, has a mission of “Planting seeds that develop leaders in economicology, health, education and the arts.”
NCTF leaders said they are confident the investment by Wege will trigger additional private foundation involvement in the fund.
“Thank you to the Wege Foundation, for their continual commitment to diversity and change in our community,” said Ollie Howie, managing director, NCTF. “We are excited to have them on board and look forward to a long relationship together, since our missions are so aligned. We hope that Wege is the first of many mission-driven foundations that will be a part of our inaugural limited partner list. We are grateful that Wege is helping us reach our goal of improving our community by investing in the best diverse-led companies.”
Inspired by an idea in 2018 by former longtime Right Place President and CEO Birgit Klohs, who serves as a board member, NCTF publicly launched on Jan. 23, 2020.
The idea of creating opportunity for entrepreneurs of color led Klohs to share the idea in 2018 with longtime friend Skot Welch, founder of Global Bridgebuilders, an international diversity, equity and inclusion consulting firm.
Welch then recruited successful venture capitalist Kwame Anku, CEO and general partner of Black Star Fund, who is one of the first Black venture capitalists to create a fund with an all-Black portfolio. Anku stepped in to serve as a fund consultant during the first year of operations. The trio, who are all NCTF board members, incubated the idea and socialized it with potential funders.
NCTF was seeded initially with funds from Bank of America and Consumers Energy Foundation. DTE Energy followed as a seed investor. Bank of America and the Consumers Energy Foundation then invested additional dollars into the fund, which also has received investments from businessman John Kennedy, Gentex, The Meijer Foundation, Horizon Bank, Mercantile Bank, Rockford Construction, Spectrum Health Innovations, Wolverine Building Group, WGO Capital and Brooks Capital Management.
NCTF plans to invest between $250,000 and $500,000 in second-stage, people of color-owned companies involved in advanced manufacturing, food and agribusiness, e-commerce and information technology, life sciences, and finance technology, as well as legacy and transitioning succession businesses.
With this Wege commitment, the fund is targeting the first quarter of 2022 to make its first investment.
The fund will focus on three areas: West Michigan-based, people of color-owned companies; transitioning, nonlocal companies that are willing to place an entrepreneur of color in executive positions; and second-stage entrepreneurs of color who will relocate to West Michigan to grow their company.
NCTF maintains an investment committee comprised of local and national members and is governed by a board of directors which, along with Klohs, Welch and Anku, includes Renee Tabben, president of Bank of America’s Grand Rapids market; Garrick Rochow, president and CEO of Consumers Energy; and Christal Jackson, a global venture philanthropist.
More about the fund is at newcommunityfund.com.