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'I Know the Struggle': Former NWA Artist Launches a Startup Accelerator Aimed at Non-Unicorns
Mar 29 2021
Arabian Prince, a founding member of the rap group N.W.A., is behind a new Los Angeles incubator aimed at tech founders from underserved communities.
The musician-turned-entrepreneur launched Incub8next on Monday with Art+Logic co-founder Paul Hershenson, health-tech expert Matthew Walk and Aj Kang, a DJ with marketing experience.
<p>The crew calls their project a social impact incubator, and it's looking for entrepreneurs building tech startups from a range of backgrounds, like "the intrepid single mom with a parenting product ready for marketing" or a "preventative health app developer in need of FDA approval," the founders said in a statement. </p><p>"There are people who have never gotten the opportunity but have everything else they need to succeed in business," Arabian Prince said in the statement. "With my background, I've conjured things out of thin air to make money. So I know the struggle."</p><p>The Compton-born rapper's career in tech has spanned video games and animation. Last June, he <a href="https://dot.la/nwa-covitech-startup-2646165054/" target="_self">unveiled his Covitech project</a>, a cloud-based suite of apps designed to safely usher employees back to work at a time when small-to-medium businesses struggled to get a hold of PPE and testing resources. </p><p>It was created by the Incub8next co-founders — before the group built an incubator.</p><p>"It became very obvious to everyone that the pandemic was having unequal effects on people," Hershenson told dot.LA. "In particular, people of color in minority communities were taking the brunt of everything. Where people like me were able to sit comfortably at home, carry on and do our work really as if nothing had changed." </p><p>Once a COVID-19 vaccine was approved, Hershenson and his team sketched out a more "sustainable" project that could serve communities even after restrictions and stay-at-home orders were lifted. </p><p>"This is the reinvention of Covitech for a post-pandemic environment," Hershenson said. </p><p>Landing a spot at Incub8next means access to mentorship, fundraising help and marketing support. Individuals and teams will be accepted on a rolling basis and can now submit inquiries. </p><p>The program meets weekly by Zoom for three to five weeks.</p><p>Hershenson said the incubator will probably take between 5% to 10% stake in each company. The co-founders hope to reach a deal with their first participant by the end of this week. </p><p>"We are looking at a new wave of entrepreneurship in the world," Walk said in a press release. "While the 'unicorns' are out there getting press and IPOs, there is a massive opportunity for 'small' businesses to reach revenue of $5-100 million and be wildly successful without ever becoming a household name. </p><p>"These are the businesses I want to discover and be a part of."</p>
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MaC Venture Capital, one of the few majority Black-owned venture firms to focus on increasing the woefully slim number of non-white founders, closed its first $110 million fund.
The two-year-old firm came into being when Cross Culture Ventures, co-founded by Marlon Nichols and Troy Carter, merged with M Ventures. That united Nichols with former Washington, D.C. Mayor Adrian Fenty; former William Morris Agency talent agent Michael Palank and MACRO founder and CEO Charles D. King, who was the first Black partner at a major Hollywood talent agency.
<p>Their two previous firms had funds in the $20 million range and wrote smaller checks. Now with a bigger vehicle, and more star power, MaC aims to start investing in seed-stage upstarts at the million dollar level – going up to two million in some cases – in return for a 10% stake. </p><p><em>"</em>We haven't had to do anything different from what we were doing before," said Palank. "Now we just get larger stakes in the company and have a louder voice because we are on the board<em>."</em></p><p>Just 2% of VC investment partners identify as Black or Latino and less than 10% of VC-funded companies are led by women or people of color in Southern California, <a href="https://www.pledgela.org/" rel="noopener noreferrer" target="_blank">according to PledgeLA.</a></p><p>MaC Venture Capital, which has already invested in 25 startups – including <a href="https://www.pipe.com/" rel="noopener noreferrer" target="_blank">Pipe</a>, <a href="https://www.stoke-space.com/" rel="noopener noreferrer" target="_blank">Stoke</a>, <a href="https://goodfair.com/" rel="noopener noreferrer" target="_blank">Goodfair</a>, <a href="https://www.finesse.us/" rel="noopener noreferrer" target="_blank">Finesse</a>, <a href="https://www.purestream.com/" rel="noopener noreferrer" target="_blank">PureStream</a> and <a href="https://getsote.com/" rel="noopener noreferrer" target="_blank">Sote</a><em> – </em>says 76% of its portfolio is run by Black, Latinx or female founders.</p><p>"Given our varied backgrounds and the different types of communities we're a part of, we're able to see opportunities in places many of our venture colleagues aren't able to see," said Nichols. "That's a superpower that allows us to get into some amazing deals pretty early before they start to become competitive."</p><p class="shortcode-media shortcode-media-rebelmouse-image">
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<small class="image-media media-caption" placeholder="Add Photo Caption...">MaC founders left to right: Marlon Nichols, Michael Palank, Charles D. King, and Adrian Fenty.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Image courtesy of MaC VC</small></p><p>Like many industries, the notoriously clubby world of venture capital <a href="https://dot.la/lots-of-talk-but-little-action-how-can-venture-capital-solve-its-whiteness-problem-2646188887.html" target="_self">faced a reckoning when protests erupted after the killing of George Floyd last year.</a> Investors tripped over themselves to preach the importance of diversity on Twitter or issue feel-good statements. Some firms, including Softbank and Andreessen Horowitz, even launched new funds to focus on diversity but that too seemed more symbolic.<br/></p><p>Andreessen's <a href="https://a16z.com/2020/06/03/talent-x-opportunity/" target="_blank">Talent x Opportunity Fund</a> launched with just $2.2 million in donations from partners, a drop in the bucket for a firm with $14 billion under management.</p><p>Of the $150 billion in venture funding hauled in by U.S startups last year, only $1 billion went to Black founders, <a href="https://news.crunchbase.com/news/highlighting-notable-funding-to-black-founders-in-2020/" target="_blank">according to Crunchbase.</a></p><p>"There were a lot of things said, but a lot of checks still need to be cashed," said Nichols. </p><p>Still, Nichols said the newfound awareness helped attract limited partners to the fund, which include Foot Locker, Inc., Goldman Sachs and Bank of America.</p><p>"We have a few major corporations that are investors in our fund that invested in us because we're good at what we do, but also because they recognize that there is a disproportionate amount of funding that goes to people of color," Nichols said. "We've been pleasantly surprised by the attention and the follow through. But make no mistake, there's still a ton more work to do."</p><p><em>This story has been updated to include the fund's new total of $110 million. </em><br/></p>
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Have you ever used an app or product and come across a fundamental feature that was either hard to access or somehow more confusing than helpful? These are surprisingly common problems caused by a similar root issue.
When companies create products and experiences, they are often focused on a set of considerations: goals, budget, resources, timing, etc. But often one ingredient is missing: their audience — not just through research but through the direct makeup of the team designing the product.
<h2>Building New Features Through Mixed Perspectives</h2><p>Representation comes in many forms: gender, sexual orientation, race, age, upbringing and more. Depending on the product, some criteria may or may not be relevant. What's important is that you build your team around the audience you're trying to cultivate, both now and in the future. As the chief architect of your customers' experience, you want to make sure your team can anticipate all the possible problems and provide unique solutions people might encounter. As head of product at<a href="https://albert.com/" target="_blank"> Albert</a>, an L.A.-based money app that helps people manage their financial lives, this idea of representation is important to me. That's why we've sought to build a balanced team that includes experts in personal finance, but also people who might not have known how to budget before. Our audience tends to skew slightly female, and, while I don't represent all women, I'm proud to lead design in a world where women fill<a href="https://www.aiga.org/women-lead-double-or-nothing-launch" rel="noopener noreferrer" target="_blank"> less than 11% of design leadership</a> roles across industries, despite representing 54% of designers. </p><p>Empathy and research will always be key to product design, but they can't replace representation. Without having stand-ins for your audience on your team, it's hard to know if you've covered the nuances in addition to missing the blind spots. </p><p>To achieve that at Albert, we aim to hire a cross section of our target audience: people who understand what it's like living as a young adult with limited access and experience with financial tools, as well as true personal finance experts. Fortunately for Los Angeles tech companies, this city has a huge pool of diverse, creative talent to hire and embed in product teams.</p><h2>Assembling Representation in the Right Places</h2><p>L.A.'s landscape offers so much to help companies achieve strong teams. It's a tapestry of SoCal born and bred as well as transplants from across the U.S. and the world, who bring influences from across the globe. These different backgrounds create a local ecosystem of potential representation. For Albert, financial needs like living costs and spending habits inherently vary by region, and that breadth of experiences in L.A. talent helps us stay relevant for a broad audience. </p><p>To find that perfect mix of representation, it's important to know what role you want each background to play in the product process and then source talent accordingly. I've found that the sweet spot is leaving the user experience up to the non-experts, the deep inner-workings to the experts, and the content to a collaboration between the two. </p><p>We want to make sure the core and operations of our experiences come from the experts who know what our target audience needs. The non-experts who can relate to our audiences play a crucial role catering the experience and the delivery, based on what they know will be most accessible to them.</p><p>Working on Albert's investing feature illustrated this for me personally. Our goal is to make investing approachable for those who feel overwhelmed at even the thought of taking control of their finances. To make it as easy as possible to get started, we have people on our team who are deeply experienced with the investing landscape, but it has been just as important to have team members who know nothing about investing.</p><p>For the deeply experienced, it's hard to know what needs more context. For the beginners, it's hard to know what's important to focus on or where to begin. Using investment lingo like ETFs and stock tickers would seem like a foreign language to our audience. Trying to teach technical aspects upfront doesn't solve our goal of making investing more approachable, and may even heighten the sense that it's overwhelming. Rather than trying to force it, we can get creative with new investing experiences that are easier to relate to as someone just starting out.</p><p>Those on our team who were newer to investing concepts gave critical feedback on what may be difficult to approach and what could make it more relatable—in this case, it was introducing themes like "sustainability," "technology," "biotech," and "women-led companies." On the flip side, without the experts on our team, we wouldn't know what kind of investing would actually be most appropriate for our audience. It's the teamwork that helps us make better, fresher products.</p><h2>The Business Case for Inclusion</h2><p>This is just scratching the surface of how important well-rounded representation is for making successful products. When working entirely from a place of empathy, decisions can be made on assumptions. With research, assumptions become educated guesses based on what users tell you. But, with your audience embedded within your teams, that information becomes fact from personal experience. Red flags can be raised quickly and easily internally instead of waiting to hear from your audience.</p><p>Product teams absolutely can and should include people that don't look like their target audience. It's an important piece to having good balance and perspective. But ultimately, you risk missing the mark on multiple fronts without representation. Companies nationwide are finally putting more action behind their words when it comes to embracing diversity within their ranks, and Los Angeles has a unique local ecosystem of talents of all varieties that no business based here should miss out on. </p><p>No matter what industry you're in—representation matters.</p>
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