A16z’s Megan Holston-Alexander on Building Generational Wealth in the Black Community Through Tech
On this episode of the L.A. Venture podcast, A16z Partner Megan Holston-Alexander, who heads the company’s Cultural Leadership Fund (CLF), discusses how she uses her network to bring Black leaders to the tech space, as part of an effort to help build generational wealth in those communities.
One of the most influential venture firms around, A16z, also known as Andreessen Horowitz, has $33.3 billion in assets under management. Its Cultural Leadership Fund has two main missions: “connecting the world’s greatest cultural leaders” with the best technology companies and getting young African Americans interested in tech.
Holston-Alexander’s team focuses on bringing Black athletes, entertainers, musicians and C-level executives — that she labels as “cultural leaders” — into the tech industry. “And CLF gets to provide an on-ramp to that,” she said.
Black culture informs many of the trends in tech, Holston-Alexander said, but the industries that benefit from those trends don’t always reflect the communities that are on the vanguard—be it in music, fashion, ecommerce or elsewhere.
“And what we wanted to do is transform that and convert that cultural leadership, quite frankly, into ownership into these companies,” Holston-Alexander said. “It's really great that we're on the front line of the greatest dancing trends, etc. But how do we get ownership in the things that we're, quite frankly, helping build in the background?”
So far, A16z’s CLF has invested in 300 startups through its first two funds and recently announced Fund III.
Adding value to these investments can mean reaching out to cultural leaders for positions that A16z-funding are looking to fill, or working with Black executives, celebrities or innovators who are interested in a particular field in tech, and making introductions to the companies working in that space.
“We’ll go and tap into our network and say, ‘Who do we know that fits into [a startup’s] need?,” she said. The CLF works to make the introduction.
She added that the new fund has been selective with the limited partners (LPs) invested in it. They’re looking for Black LPs who are not only cultural leaders but who are also engaged and deeply interested in the areas the CLF has targeted.
“The age of the disengaged celebrity investor is over, right?” she said. “Very early on, it was okay to just kind of lend your name to things right to help kind of help things blow up.”
Now, the CLF wants to make sure funders are invested intellectually as well as financially.
“We'd rather bring somebody into the fund to maybe write a smaller check, but [who] is more willing to engage and pick up the phone when a founder calls.”
Holston-Alexander grew up in Montgomery, Alabama—one of the centers of the Civil Rights Movement, where Dr. Martin Luther King Jr. established his church and Rosa Parks refused to give up her seat on the bus.
“This concept of civil rights and equity has been in the water that I drink since I grew up as a child,” she said. “And even in 65 years, when you think about progress, when it comes to income and wealth, and generational things being passed down, there hasn’t been much change.”
Her background informs her work at the Cultural Leadership Fund, she said — in particular her focus on bringing young Black workers and entrepreneurs into the industry.
“We have seen technology really, in the last 20 years, become a source of wealth generation, and one of the clearest paths to wealth generation,” she said “And so we want to be sure that we're tapping into that, and getting people into this industry early.”
Engagement and Production Intern Jojo Macaluso contributed to this post.
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