1863 Fund is 1863 Ventures’ multi-sector investing strategy for New Majority entrepreneurs (i.e., business owners who have been historically marginalized).
Established in 2020, 1863 Fund provides capital to 13 Black, Brown and women-owned businesses, with more than $2 million in non-predatory financing to accelerate entrepreneurs from high potential to high growth and to reduce barriers for these founders across the nation, according to a press release.
“Our thesis is that entrepreneurship is becoming an increasingly viable pathway for the New Majority to build wealth; however, this is not achieved without historical headwinds,” says Melissa Bradley, founder and managing partner of 1863 Ventures.
“It costs at least a quarter of a million dollars more for a Black founder to create the same exact business as their white peers. Based on structural racism and generations of economic deprivation—with all the challenges marginalized people continue to endure—it is unrealistic to expect a New Majority company to have the same trajectory and growth as their white counterparts.”
To this end, 1863 Fund is dedicated to improving the state of innovation and entrepreneurship for both New Majority founders and ecosystem builders alike by stimulating member companies via equity investments or alternative, revenue-based financing models. Nationwide, the fund invests strategic capital across industries, including fintech, software, hair care and beauty supply, healthcare, and baked goods. The challenges of coronavirus will persist. It is crucial for portfolio companies to remain nimble and adapt to evolving markets. Amid the volatile business environment, 1863 Fund has provided much-needed cash flow to increase the survivability of portfolio companies and maintain their profitability.
“1863’s investment has allowed me to stay afloat during these tumultuous times,” says Ashley Marie Rouse, founder of the culinary-inspired and vegan Trade Street Jam Co, which is set to produce 4,600 gallons of jam this year and grow to $1 million in revenue.
“We have a product-based business, and we cannot make money without product! Investment dollars enable us to secure raw materials that are now at a higher cost, that we would not traditionally be able to afford.”
Portfolio company founders have also leveraged the network and counsel of an experienced 1863 Ventures team. Jean Brownhill is reinventing home remodeling contracts with Sweeten and recently secured new investors, thanks to Melissa Bradley’s cultivated institutional relationships.
In review of the 1863 Fund investments, portfolio companies are accelerating operations with increased product inventory, additional seed funding from other investors, administrative and infrastructural improvements, expanded workforce, and larger advertising budgets:
– Lillii RNB Inc., a retail fraud detection, prevention, and data services firm, closed $3 million in seed funding.
– Tech startup and career development program, The Mentor Method, raised $1.6 million in venture funding, onboarded clients like Amazon and the Department of Education, doubled revenue in one year, and scaled their team from two staff members to 11 in seven months.
– Vegan bakery Keeping You Sweet hired four additional employees and increased their sales up 129%, return customer rate up 75%, and e-commerce store conversion up 171%.
– Moisture Love, a producer of natural hair care products, increased its website conversion rate by 16% and reduced customer acquisition costs by 74%.
– Naasakle International produces business lines including Eu’Genia Shea, a 100% all-natural shea butter and skincare brand, and announced a new partnership with QVC, increased its door count with Target, and confirmed launch with another major retailer in the drug market.
– Brown Toy Box is a full-scale educational toy company producing and curating STEAM toys, media, and experiences for Black children and recently launched in-store and online at Target.
– Sweeten connects prospective home renovators with quality construction labor to take advantage of competitive bids and fair estimates and has increased its awarded projects year-over-year in Chicago (337%), Philadelphia (125%), and Los Angeles (80%).
1863 Ventures is proud to invest in early-stage businesses and entrepreneurs to achieve scale and generational wealth. 1863 Fund is a component of 1863 Ventures’ business development initiatives to generate $100 billion in wealth by and for the New Majority by 2030. Learn more about the 1863 Fund portfolio companies in the 2021 Impact Report.