Kwame Anku believes the New Community Transformation Fund forming in Grand Rapids could become a national model for driving greater economic inclusion in venture capital.
Anku, who serves as CEO of Sacramento, Calif.-based Black Star Fund, will advise local partners on the formation of the new venture capital fund. He said he knows of no other initiative in the U.S. led by an economic development organization and dedicated to investing in businesses owned by racial and ethnic minorities.
“This could really be a breakthrough structure. It’s the coming together of powerhouses to create something new to have a powerful impact,” said Anku, who describes himself as “an evangelist for the uplifting and transformation for communities, particularly community of color, through capital investment.”
“We believe this will have an extraordinary impact on the West Michigan community and marketplace, but quite frankly can and should be a national model for what is possible,” he said. “In West Michigan, we have the opportunity to be a beacon, an example and a national example, for what’s possible.”
Anku also co-founded and was a principal at the Black Angel Tech Fund that focused on providing capital to black technology entrepreneurs. He was recruited to work on assisting in the design and development of the Grand Rapids fund, including recruiting a management team, “to be able to get the deals and get the job done,” he said.
“All of that will be put together in short order,” Anku said.
Then the hard work begins of finding investors to put money into the venture capital fund, which has a targeted goal of raising $15 million to $25 million. The group aims to begin operations by 2021.
Anku expects the search for backers to extend well beyond West Michigan. He believes his peers on the West Coast will consider making an investment in the fund.
Anku’s connections to West Coast funds is part of why he was brought in to consult with the New Community Transformation Fund, he said.
“We believe there are extraordinary partners locally first, then statewide, and nationally and internationally, that will want to participate in this fund and we’re going to be working very hard to make that happen in short order,” Anku said.
That interest could extend to funds on the coasts looking to partner on investments with the new Grand Rapids-based venture capital fund, Anku said.
“The reality is anybody in business is looking for opportunities. Venture capitalists are looking for opportunities, and in business when you have that warm relationship — somebody I know, I like and that I trust — and somebody is making an introduction to the opportunity, it has a profound effect on their interest in being involved.”
Fund managers will host investor summits in Grand Rapids and invite funds from both the West Coast and East Coast to “come and see what this fund is about, what the opportunities are and how they can participate not only to invest in the fund, but also to co-invest alongside of us as we are identifying those companies that we are going to invest in,” Anku said.