Frederik Groce is the founder of BLCK VC, a firm focused on connecting, empowering, and advancing aspiring and new black venture capitalists. By providing a community to help ensure the long-term success of black VC’s, Groce’s goal is to increase the number of black investors from 200 to 400 by 2024. The numbers of black-owned businesses are on the rise. Despite their economic potential, black founders receive less than 1% of venture capital funding, which limits their probability of growth, scale, and profit.
In this interview Groce outlines his plan to position BLCK VC as a symbol of change and beacon of hope for aspiring new black investors.
BLACK ENTERPRISE: Rarely do people say “when I grow up, I want to become a venture capitalist.” So how did you learn about a career in venture capital? What are the top skills of a venture capitalist?
Frederik Groce: I attended Stanford University for my undergraduate studies. Bordering Stanford’s campus is Sand Hill, which is where most venture capital firms are based. I’d always hear about VC, but I didn’t really learn about the industry until I was CEO of Stanford Student Enterprises, where I helped Stanford students learn about business by building and managing existing business and investments. As part of this role, I worked directly with VC’s and managed some of the university-related accelerators and incubators. The top 2-3 skills of a venture capitalist are detail oriented, ability to multi-task, and the ability to be a self-starter.
BE: Can you walk us through a typical day as founder of BLK VC?
There’s really no such thing as a typical day of a [venture capitalist]. I like to instead think of it as a series of activities that get allocated more densely on given days depending on my meeting schedule. Generally, in my role, it’s my job to meet new companies that are looking for fundraising, work on diligence for companies we are thinking about investing in, and meet investors at other funds. Typically, I’m spending my time between helping my team efficiently look at great companies and helping the companies we’ve invested in be successful by introducing them to customers or helping them think through business problems.
BE: It’s no longer a secret or taboo topic; venture capital has a diversity problem. What factors do you believe contributes to this issue?
Groce: Fundamentally, this is mostly driven by the fact that most venture funds leverage their personal networks, which are often not diverse, to drive both hiring and deal generation. While on its face, this isn’t inherently a problem. It becomes a problem if there isn’t [intention] put behind ensuring those networks are diverse. Another contributing factor is that there’s a self-selection bias in the industry, which means if you’re only opening up the pool of candidates who graduated from a top school and did investment banking, then you’ve artificially constrained your possible candidate pool. Great talent is everywhere. And as technology revolutionizes every aspect of our lives, great investors can be found that hail from a number of different backgrounds.
BE: How do you plan to increase the representation of black investors?
Groce: By connecting our already long list of incredible candidates looking to break into VC with funds looking to build diverse teams. Furthermore, we aim to work with other organizations like HBCU.VC and All Raise because partners are a key part of our strategy for success.
BE: Beyond serving as a resource to help companies find and retain top black investment talent, what needs to happen to expand the entrepreneurial knowledge culture not only in the Silicon Valley and New York City areas, but in cities like Detroit, and New Orleans, and other areas with the fastest growth?
Groce: We need to get on airplanes and into cars. We, as Silicon Valley [black] investors, need to be hunting all around the world. We need to invest time and not just money into hot spots, become partners with the local communities and thereby become trusted. Because without that, it becomes really tough to truly build rapport. I think we also need to help our companies manage to build out functions in other geographies. This is usually just good business sense as the expense load for managing people and office space can often be a standard deviation below the cost in Silicon Valley.