Coopetition: How Zane values co-investing over competition.
The Atlanta venture capital scene is blooming. Today Zane Venture Fund celebrates venture firm Harlem Capital Partners for their groundbreaking $134M raise. They’re changing the face of entrepreneurship and we’re proud to be in their company and community.
As a matter of fact, Harlem Capital led the pre-seed round for one of our own portfolio companies, Parrot Mob, plus Harlem Managing Partner Henri Pierre-Jacques will be the keynote speaker at our upcoming Zane Access Capital Readiness Cohort graduation. We are deeply grateful to be co-investors with Harlem and for Henri to speak to our cohort.
It’s a common misconception (and limiting idea) that venture firms like Zane and Harlem are only competitors. We are frequently asked how we are different from one another instead of how we help each other. Distorted headlines like the one below misrepresent the article’s content and create the impression that there are too many diversity-focused funds.
We believe that investors excel when they lean into their peers’ collective experience, and the same holds true for venture funds. Shila Nieves Burney, General Partner at Zane Venture Fund, penned the following article offering her thoughts on co-investing over competition.
During 2019, there was a huge increase in venture fund formation. Many of us decided to put our hat in the ring to address the lack of access to capital for underrepresented founders. While each of our reasons was different, there was a narrative being formed by the press that we were all serving the same purpose, and why should there be four new funds started by four different black women, all in Atlanta.
My own journey to venture capital began in early 2018 when I spent seven months sourcing investors for a startup. After spending much time and effort speaking to potential investors, I realized that founders of color had a tough time raising capital. And, this wasn’t due to a lack of capital but a lack of access to that capital.
After this realization, I decided to form Zane Venture Fund to invest in diverse founders, particularly founders who were creating tech-enabled companies to address problems in communities. As is my habit (and passion), I began to research and speak to people in my community about the potential of creating a venture fund aimed at these founders.
I had many conversations with people in the tech and entrepreneurial space. My goal was to find like-minded individuals and look for potential partners and collaborators. At the time, I heard about one other person who was starting a fund. I immediately attempted a meeting, because I thought that we should know each other and find a way to collaborate. The meeting never happened.
Over the next few months, I became aware of other funds investing in diverse founders. One of the funds was Collab Capital. I immediately reached out to each of the partners for a meeting. I was extremely excited for them and supported their initial event to announce the fund. When a representative of a large institution asked me to introduce her to Atlanta investors, I immediately reached out to several funds and invited them to meet with her.
Now, in what should be an exciting time for these funds we’ve created for diverse founders, we’re continually being asked to defend our differences. Obviously, each fund has its own unique, differentiated thesis. This begs the question: Are other non-diverse funds being asked the same thing?
In this new age where we are committed to inclusivity and belonging, I believe the pertinent question is this: How will we create the capital ecosystem that is missing for diverse, underrepresented founders?
In my opinion, other diverse funds could be potential co-investment partners, creating collective prosperity, rather than competitors. By seeking out co-investors, we make our Southeastern investment ecosystem stronger. We will compete for the best deals and for the best returns for our LPs.
As a professional, I have always believed in collaboration over competition. The venture capital space has already had its moment of picking winners based on pattern matching, which obviously didn’t include people of color.
Instead, my goal is to collaborate with my fellow VCs to ensure the best companies receive the funding and support they need to grow and scale. This is the only way we can effectively and equitably create the diverse Southeastern tech community we are all committed to growing.