The 46-year-old poet-turned-financer Taj Eldridge is raising $250 million to support Black and brown entrepreneurs and investors.
The fund will be split in two buckets, $125 million will go toward direct investments in clean tech, healthcare tech, media and fintech, as well as follow-on investments for companies that its affiliated fund managers make investments in. The rest of the funds will support fund managers raising at least $5 million that are majority-owned by Black or Brown individuals with an environmental social governance focus.
"What we like to say is we like to see funds that impact how you work, how you live and how you thrive," Eldridge told Minnie Ingersoll on the LA Venture podcast.
Eldridge, senior director of investments for the Los Angeles Cleantech Incubator, said the idea for the new fund began in 2019 before last summer's racial reckoning when he had a conversation with a "high net-worth individual" about reducing the racial wealth gap.
For Eldridge, the answer was ownership.
"If a person of color has ownership in the company, if they're vested in the company, if they're hiring in C-suite, that creates wealth, that creates ownership," he said.
Founders of color have long had a harder time raising funds. That's because traditional funds have been dominated by white men. Last week, the National Venture Capital Association released a report by Deloitte that found of the 378 top venture firms with a total of $256.4 billion in assets under management, 3% of investment partners are Black and 4% are Latino.
Eldridge said he is still raising money, but has a target for $250 million. His support has come from individuals in the sports and entertainment industries in Los Angeles and outside of the state.
Eldridge partnered with Keith Spears and Bahiyah Robinson — founder and CEO of VC Include, which is an accelerator for fund managers that provides training and platform services — to build up a fund.
Since VC Include already has relationships with emerging fund managers, it made sense to start something like Include Ventures to provide funding for them.
Include Ventures is an offshoot that will be run by Eldridge out of South Los Angeles.
"The opportunity gap is incredibly massive when you think about the changing demographics in the United States, and where we're headed," said Carmen Palafox, a partner at MiLA Capital and board member of LatinxVC and of the National Venture Capital Association.
Underrepresented founders and funds have seen more dollars come in, she said. But so has everyone else.
"I think what's important to keep in mind is that the bigger, more traditional funds are raising billions and billions of dollars so 2020 was a record breaking year for funds raising VC money and the asset class is thriving," Palafox said. "That's what leads to this continuous lack of progress because the bigger funds are raising more money. And even though we have these new funds, it's just allowing us to keep up with the existing ones."
Eldridge will remain with LACI, a Los Angeles city-sponsored incubator for clean technologies, where he focuses on bringing in new investors. He sees major changes ahead in that space.
"Clean tech is going to be normalized," he said. "We're going to have a situation where it's not going to be in a separate space, similar to how I don't believe impact is going to be in a separate space."
From Poetry to Spreadsheets
Eldridge didn't always want to be in finance. He studied poetry and literature in college, hoping to become a rapper. While that didn't happen, he learned the value of storytelling and connecting with people.
He said some of his investors come from the music industry.
Eldridge is also involved in philanthropic endeavors, sitting on the board of Homeboy Industries, an L.A.-based gang rehabilitation and re-entry program.
One piece of advice he has for the next generation is to be authentic. Eldridge said when he was at his first banking job, he used an American-sounding name rather than his real name, which is Arabic.
"Your self, your full self, is what's going to be valuable for you and for whatever company you're at," he said.
Eldridge said he seeks inspiration from immigrants who come to this country with $1 in their pocket and who work hard every day to create a living for themselves.
"People who've raised themselves up, that inspires me," he said.
A Stage 5 kidney disease diagnosis in 2018 has given him perspective about what's important in life.
"That was a calling card for me to focus on sustainability and to focus on really, really just trying to support founders that are trying to make a difference," he said.
"Alpha means nothing if I'm not here," Eldridge said, reflecting on his diagnosis and treatments that last four hours a day, three days a week. He often thinks about a saying in the Black community, "find a way or make one."
Think you have what it takes to change how people get around? Then you should apply to the fourth annual L.A. New Mobility Challenge, a joint initiative of CoMotion, the Los Angeles Cleantech Incubator, the NewCities Foundation, the UK Government/ British Consulate-General in Los Angeles, SparkLabs Group and Urban Movement Labs.
Judges are looking for solutions to two problems: transporting goods and people in urban environments. The winner gets a trip to present at SparkLabs Korea DemoDay16 in 2021, the largest accelerator demo day in the world, and three months of mentoring from SparkLabs Partners or Venture Partners.
The deadline for applications is October 30. Semi-finalists will be invited to pitch their concepts at CoMotion LA LIVE: November 17-19. To be eligible, companies must be less than five years old, have revenue of less than $5 million, and have a product in pilot, beta or prototype stage.
Last year's winner was Xtelligent, an infrastructure company developing futuristic traffic signals, while Metro Africa Express, personal mobility company committed to making moto-taxis safe, affordable and accessible across West Africa, won in 2018.
Los Angeles Cleantech Incubator's (LACI's) second annual Power Day was planned long before heavy smoke blanketed the West Coast for weeks, forcing tens of millions of residents to shelter indoors. But the noxious air provided organizers of Thursday's pitch competition for startups a visceral reminder of climate change's danger and the need to act on the sort of innovations that will be on display.
"We've gone from the cleanest air L.A. has seen in decades in April to the dirtiest air in five months," said Matt Peterson, who was appointed by Mayor Eric Garcetti as L.A.'s first Chief Sustainability Officer and is now CEO of the nonprofit LACI. "We know we want to have that cleaner air and safer neighborhoods that we enjoyed during the lockdown."
LACI was founded by the city and the Department of Water & Power as a public private partnership in 2011 to promote the growth of the clean energy industry and has helped 72 portfolio companies raise $159 million in funding.
This year's Power Day, which will be virtual, will showcase 14 companies, such as Sparkcharge, which makes a portable high-speed EV charger and Xeal, which uses predictive AI software to maximize the profits of electric vehicle charging stations.
"It really gives an opportunity for smaller startups like us to share with what we're doing and meet strategic partners," said Xeal co-founder Nikhil Bharadwaj. (The company closed a seed round last month led by Rocket Fund, LACI Impact Fund, Pasadena Angels, Emerging Ventures, and Ramez Naan Ventures.)
The showcase comes a week after Governor Gavin Newsom's landmark announcement that the sale of all gas and diesel power vehicles will be banned in California starting in 2035. The landmark order aimed at cutting greenhouse emissions will likely fuel demand for the very types of businesses that LACI helps build. "It's enormous," said Peterson. "It's a big deal."
He says solving climate change will require a combination of government help and commercial innovation. "It really takes a collaboration," he said. "And it's not just Elon Musk and Tesla. There are alot of amazing entrepreneurs coming forth with pieces of the puzzle."
Rose McKinney-James, managing principal at McKinney-James & Associates and Energy Works LLC, will provide the keynote address. Other panelists include MetroLink CEO Stephanie Wiggins and Metro CEO Phil Washington.
Startups participating in Power Day also include: NeoCharge, ePave, Substance Power & Mobility, TBM Designs, Alumina, SEED, Noria, JumpWatts, ChargerHelp, Maxwell Vehicles, Green Light Lab and Camus Energy