“I gotta say it was a good day.”
I’m so fricking pumped today. Really, truly. Yeah, Valence announced > $5 million in funding led by GGV and Upfront. That IS a big deal, but I’ll get to that. But Kamala Harris was picked to be the Vice Presidential candidate for the Democratic Party. That means she’ll be the first female Vice President of the United States, the first female Black Vice President and the first Indian-American Vice President. I don’t take this for granted, be ready for a fight. But let’s be clear. WE WILL WIN. We might have to fight for it after the votes go our way but let’s get ready for the fight.
So let’s get it.
Valence. It is a company with a mission to create better access and more funding for Black entrepreneurs and executives. Valence is led by a talented CEO, Guy Primus and was the brainchild of my partner, Kobie Fuller. If you want to follow two great Black executives who work at the intersection of technology and venture capital make sure to click on those links and follow them on Twitter.
So what exactly is Valence and why does it matter?
18 months ago, my partner Kobie Fuller was inspired to build a solution for a problem he faced regularly: as one of the few Black partners at a VC firm (an estimated 3% of GPs in venture are Black vs 14% of the US population), he was consistently asked for warm intros to Black professionals, to Black VCs, and to talented Black operators and entrepreneurs.
Venture firms wanted to meet talented Black founders but didn’t know where to start to find them. And Black entrepreneurs wanted access to decision makers but didn’t always have the easy connections. In fact, one of the biggest criticisms I personally get when I suggest that founders should “get introductions to VCs” is that this might reinforce existing racial imbalances by providing easier access to White professionals than people of color.
An imbalance clearly exists in access and networks that has resulted in a tech industry where an estimated only 1% of venture dollars go to Black founders and only 3% of the workforce is Black and a country where Black individuals hold a disproportionately low amount of the wealth — only 3%. As Kobie says, he didn’t have a “magical database” of great Black talent, so he set out to build a solution not just for himself, but also for the community.
Personally I believe that to fund more people of color you need to put check-writing authority in their hands the same way that if you want to see more women funded you need more women GPs. My greatest criticism of our industry is that women and people of color feel the need to leave larger VCs to create their own firms. We have a responsibility to help propel them to the top ranks of our biggest firms to make our check writers more representative of our society overall.
There is a very clear economic rational and strategic advantage for doing so. There are amazing Black entrepreneurs, Indian entrepreneurs, Chinese entrepreneurs, female entrepreneurs, gay entrepreneurs and so forth. OBVIOUSLY! If 90% of the check writers are White, straight men then it’s clear if you are different than that you’re going to have an advantage. As I always say, being great as an investor is about having “edge” and edge means knowing somebody or something that very few others know. It’s about swimming in lanes where others aren’t present. Being diverse in the VC industry is a VERY LOW bar and a clear differentiator.
At Upfront we believe in improving access for founders and entrepreneurs to networking, professional development, and economic opportunities, and that’s what Kobie set out to do with Valence, which he incubated in our offices. Huge hats off to Kobie for the idea, energy, direction, evening hours and the foresight and salesmanship required to bring on Guy to take the helm.
By the time Valence launched in late 2019, the team had built the necessary systems and technology to seamlessly engage and onboard the community — not just the users, but also some pilot corporate partners who also believed in the mission and opportunity and who wanted to leverage and support this amazing database of talent. It was also important to Valence to not only connect users, but also to celebrate the successes and spotlight great Black leaders through high-quality content and design.
As soon as Valence launched in November 2019, the business quickly had proven demand from the community, not only from senior business leaders but also from so many young, talented professionals who could benefit from the inter-generational networking that Valence supported so seamlessly. Since launch, the Valence platform has supported more than 5,000 micro-mentoring sessions (AKA Boosts)— allowing the kind of invaluable network support that’s so critical to success and advancement for even the most talented founders and operators.
You can hear more about the importance of mentoring from Kobie Fuller, Valence advisor James Lowry, and John Legend — yes, THE John Legend — in this video from the 2020 Upfront Summit.
So things were going well for Valence in 2020, amazingly even in a pandemic. And then in May the world was galvanized by the tragic murder of George Floyd (and Breonna Taylor. And Ahmaud Arbery. And Rayshard Brooks. And the many Black women and men before them whose lives were taken at the hands of the police.)
In these months, not only did we see widespread civic protests but so many industries, including ours, faced a reckoning that despite even the best intentions, lip service wasn’t enough. We all needed to take action to address the imbalance of access, and to literally put our money where our mouths are. Suddenly a spotlight was put on everything that the Valence team had been building, and there was even more energy around the business.
I always say that you can judge a startup’s future based on how fast they’re able to execute when it counts. Well, I can tell you that within weeks of the civil unrest, Valence had:
- Introduced the Valence Funding Network, where GPs from more than 30 of the top venture funds representing more than $60B in assets under management joined Valence with the goal of linking Black entrepreneurs on the platform directly to venture decision makers.
- Increased membership by more than 20%
- Hired a CEO, Guy Primus, who was previously the CEO of The Virtual Reality Company as well as the COO of Overbrook Entertainment. He’s been a leader at the intersection of media and tech for many years and we’re grateful to partner with him.
- Announced their Series A funding round, which Upfront participated in and which was led by Hans Tung from GGV. Hans has been a great peer and collaborator on other portfolio boards and we’re excited for him to join Valence at this pivotal time. We have worked closely with GGV for years and they were a natural fit for helping to build a network like this given their investment in Chief (for women) and The Mighty (which helps families with people facing health challenges).
Since day one we have anticipated great things for Valence and with this groundswell of support at the civic level as well as the industry level, we hope to see meaningful improvements in access and dollars for Black professionals. Please join me in congratulating Guy, Kobie and the team for what they’ve built so far, and what’s to come.
BrüMate Gets a Drinking Buddy
San Francisco Equity Partners (SFEP) has made a $20 million investment in BrüMate, a direct-to-consumer seller of insulated drinkware.
BrüMate’s patented products include wine tumblers, wine canteens, can and bottle coolers, barware, and coolers. The company was founded in 2016 by Dylan Jacob and is headquartered in Denver, Colorado.
BrüMate was ranked as #14 on Inc. Magazine’s 2020 “Inc. 5,000” list of the fastest-growing companies in America.
SFEP operating partner Moiz Ali, the founder of direct-to-consumer personal care brand Native Deodorant, is investing in BrüMate alongside SFEP and he will work with Mr. Jacob and the company’s management team to expand the company’s digital marketing and e-commerce strategy. Mr. Ali sold Native in November 2017 to Procter & Gamble for $100 million. In January 2020, he stepped down as the CEO of Native.
“BrüMate is a truly unique brand that has developed a strong emotional connection with its consumer,” said Scott Potter, managing partner of SFEP. “We are committed to retaining the brand’s focus on innovation, product quality, and enhancing shared outdoor consumer experiences.”
SFEP is BrüMate’s first outside investor. “In taking on a capital partner for the first time, it was important for us to partner with a firm like SFEP with a proven history of scaling iconic consumer brands and executing strategic retail programs,” said Mr. Jacob. “We’re also thrilled to be working with Moiz, who has invaluable experience building one of the fastest-growing and most successful D2C consumer brands in history.”
San Francisco Equity Partners makes control and minority investments of $10 million to $30 million in consumer companies that have revenue of up to $100 million and EBITDA of up to $10 million. Consumer sectors of specific interest include apparel; beauty and personal care; food and beverage; health and wellness; household products; outdoor and recreation; pet care; and specialty manufacturing. The firm, as its name implies, is based in San Francisco.
New York City-based Threadstone Advisors was the financial advisor to BrüMate on this transaction.
Private Equity Professional | September 18, 2020
Carlyle Acquires Electrostatic Sprayer Maker
The Carlyle Group has agreed to acquire Victory Innovations, a provider of electrostatic sprayers.
Victory’s cordless electrostatic spraying equipment is used to disinfect surfaces in businesses, transportation systems, hospitals, and schools. The company is headquartered near Minneapolis in Eden Prairie, Minnesota.
Electrostatic technology is used to maximize the attraction of chemical agents to objects that need to be cleaned or sanitized. Victory’s sprayers – which are chemical-agnostic – use patented technology to apply positive electric charges to cleaning agents to better enable them to envelop and bind to shadowed, vertical, and difficult-to-reach grounded surfaces. This technology allows for faster application times and reduced chemical usage.
Demand for Victory’s products have grown significantly since the company’s founding in 2014, and the company has experienced a dramatic increase in demand because of COVID-19. Schools and hospitals were among the first to adopt Victory’s technology, followed by an increasing number of other businesses and industries, from airlines and hotels to gyms and professional sports.
Currently, Victory’s products are sold in more than 40 countries and Carlyle plans to grow revenues through expansion in other global markets in Asia, Europe, Latin America, and Africa.
“Victory’s electrostatic sprayers are quickly becoming the new standard in infection control, in particular as businesses plan to reopen following the coronavirus pandemic,” said Chris Gurreri, a co-founder and the CEO of Victory. “Along with co-founders Kyle Wheaton and Cliff Wright, we’re pleased to partner with Carlyle, an investor with a record of success helping companies scale and expand globally. We look forward to working with them as we continue providing the tools that make our hospitals, schools, and communities safer.”
“As more and more businesses grasp the need to not just clean surfaces, but disinfect them, we see tremendous growth opportunity for Victory,” said Vipul Amin, a managing director at Carlyle. “Their highly effective technologies are more cost-effective, use less disinfectant and operate faster than alternative disinfecting methods. We look forward to working alongside the co-founders and the entire Victory team as we support their continued expansion.”
The Carlyle Group (NASDAQ: CG) invests worldwide in buyouts, growth capital, real estate, and leveraged finance. The firm, with $221 billion of assets under management, has more than 1,800 employees in 31 offices across six continents and is based in Washington DC.
Carlyle’s buy of Victory is being funded through Carlyle Partners VII LP and is expected to close by the end of this month.
Private Equity Professional | September 17, 2020
Financial Sponsor Pro Joins BGL
Brown Gibbons Lang & Company (BGL) has hired Heather Mosbacher Reiner as a managing director in the firm’s financial sponsor coverage group. Ms. Reiner will be based in New York City.
Ms. Reiner has more than 20 years of experience in investment banking and joins BGL from William Blair where she was a director in its financial sponsor coverage group. Prior to William Blair, she was a managing director at Gordian Group, a New York City-based investment bank that specializes in complex or distressed financial advisory work.
“BGL is one of a very limited number of strong, growing M&A platforms in the marketplace today,” said Ms. Reiner. “The firm has a compelling brand, high-quality transactions, and an impressive infrastructure and culture, all of which positions the firm well for continued growth and success. I look forward to helping them expand their relationships with financial sponsors nationwide.”
“Heather’s extensive experience and relationships will elevate BGL’s level of service to the financial sponsor community and enhance communication around our firm’s experience and capabilities, both from a sector and product perspective,” said BGL in a released statement. “Her addition to the firm is a reflection of BGL’s successful sector strategy as well as the quality of its senior bankers.”
Ms. Reiner began her career in investment banking as an associate with Citibank and as a director with Credit Suisse. Ms. Reiner has her undergraduate degree in political science and pre-med from Colgate University.
Brown Gibbons Lang is a mid-market investment bank that specializes in mergers and acquisitions, divestitures, capital markets, financial restructurings, valuations, and fairness opinions. The firm was founded in 1989 and has investment banking offices in Chicago, Cleveland, and Philadelphia, and real estate offices in Chicago, Cleveland, Denver, and San Antonio.
Private Equity Professional | September 18, 2020
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