NFL star Malcom Jenkins on starting VC fund: Black investors need more opportunities
Malcom Jenkins, Two-Time Super Bowl Champion & Malcolm Inc. Co-Founder, has teamed up with fellow NFL players to launch a venture capital fund. He and Ralonda Johnson, Malcolm Inc. CEO, join Yahoo Finance Live to discuss launching Broad Street Ventures, the minority gap in VC funds and Derek Chauvin’s trial verdict.
Video transcript
ZACK GUZMAN: Welcome back to Yahoo Finance Live. It is, of course, still April, which means it is still Financial Literacy Month. And as we highlighted earlier this month, a number of NFL players have been teaming up with GoalSetter, a Black-owned personal finance education app to bring financial education to the classroom by bringing some real cash to students to get them started on the path to savings and investing.
And one player who's not only donating to that cause, but also looking to address the minority gap when it comes to the venture world and Black and Brown representation in VC funds, one player launching a fund of his own here, Broadstreet Ventures joins us now. Happy to bring in two-time Super Bowl champion Malcolm Jenkins and Broad Street Ventures co-founder Ralonda Johnson into the program. Guys, thanks for taking the time to chat with us today.
And Malcolm, I guess we'll start with you because, you know, it's one thing to create a VC fund, but another here to really have some big name companies on the list of investments, not just Airbnb, but "Fortnite" founder Epic Games, as well as the company behind NBA Top Shot, Dapper Labs. So talk to me about why you wanted to start this fund and what it signals in terms of where you want to see things head.
MALCOLM JENKINS: Yeah, I think that the reason we started the fund was similar to the kind of things you've been highlighting all month-- financial literacy, right? I've been one of the people that have been told my entire life, you work hard, and what you earn off of your labor will lead to sustainability and long-term wealth. You save, save, save, work hard, and you'll be good. And quite frankly, that's just not the case, not in this country. And it comes in two different types of investments, whether it be in the market, whether it's in real estate or everything else.
And you start to look at VC. And there aren't that many people who look like me who are in that space. And what that calls for-- and the reason that venture capital and things like that is so important is because it's the lesson of group economics. In African-American communities and communities of color, that part is not executed. Our strategy is not executed enough. And we don't know enough about it.
And so, as athletes who are used to playing on teams, who are in these spaces that can get into these rooms and into these other deals people want to associate with us, we get endorsement deals for these companies all the time, that the idea with this fund is, why don't we put our money together and also invest in some of these things that we're starting to build equity for or build endorsements with in portfolio?
AKIKO FUJITA: Ralonda, Malcolm brings up a point that we hear from a lot of especially Black and Brown startup founders who say, there's not the same access to capital. Certainly, through your firm, you're looking to make the investments in that next big company. But there's a larger goal, it sounds like, to really lift some of these companies up. How does that investment thesis look like?
RALONDA JOHNSON: So for us, I think it's really important that we have access to some of these deals. I think as Malcolm mentioned, there's not a lot of investors that look like us. It's only about 4% of venture capital investors are Black. So for us, we wanted to create this vehicle to give Black and Brown investors access to some of these deals.
And then also on the other side, there's not a lot of venture capital-backed founders that are receiving capital-- you know, Black founders that are receiving capital. So our long-term strategy is, as we continue to grow and eventually move on to BroadStreet Ventures fund number two, having a specific strategy where we can help deploy capital to Black and Brown founders.
ZACK GUZMAN: Yeah, and when you're having these discussions with the other athletes that have come on board here, Malcolm-- and I mean, we're talking about a few in the NFL. Obviously, there have been names that we can talk-- Jacoby Brissett would be one that I would mention. But in those discussions, how much of what you're learning is just maybe-- are you finding that peers are already actively thinking about how can I be investing in this space? Or is there convincing to be had?
MALCOLM JENKINS: Well, I think education is a huge part of what we try to do. And I think that that is really the first barrier that we get. We hear so many reports and have seen documentaries about professional athletes going broke within five years of them leaving their sports. And a lot of that comes we don't talk a lot about money together. And so therefore, we don't talk about how we lose money either. And so we kind of fall into this cycle over and over again.
And I think what we have seen is that there have been individual guys who have been in this space kind of by themselves-- I would look at a Larry Fitzgerald-- who have been doing these things for a long time and have been very successful at it. But when it comes to creating group economics to somebody who doesn't have maybe all of the capital or can't take all of the risk and sharing that education, we don't really have that.
And so the first thing that we start to do is educate guys on what venture capital is, how do you get into these spaces, and how-- and who are we investing with. Here's the strategy. We don't just want your money. We want you to be engaged. So that if you want to invest with us or you want to go out and do it on your own, you know what to look for, you know what questions to ask, and you know how to move in this space.
So once we kind of put those education things, they're more than willing to come on because they understand what's happening now. They're not just cutting a check and hoping that we give them returns. They know the strategy. They know the businesses and can come on and use those introductions to get endorsements and other things, other relationships.
AKIKO FUJITA: Malcolm, you've been quite outspoken about a lot of the social justice issues that have really been elevated to the forefront over the last year. Yesterday, we got that verdict in Derek Chauvin's trial. And the overwhelming sentiment seems to be that this is really just the beginning. And I wonder how you're looking about that, looking at what played out yesterday in relation to your role as an activist and as an athlete.
MALCOLM JENKINS: Yeah, I think, you know, yesterday, I was definitely-- you know, you felt good that justice was served, that there was accountability for the death of George Floyd. And but I woke up today, and I still have the same anxieties. I still have the same concerns. Because the systems that were in place that took George Floyd's life are still very much intact.
And so it's not until we really start to aim our sights at systems and not these individual police officers. While they do need to be held accountable for their actions, that they come from-- they're just symptoms from a larger system that we, as Americans, really need to take a hard look at and decide if we are happy with the way that we go about policing. It hasn't really worked for the Black community and communities of color up until this point.
And if we continue to provide some of the same solutions, like training and implicit bias and things like that, those aren't the issues. We're asking police officers to do way too much. And there are not enough things in place that the community can hold them accountable. So we really need to start unpacking how we go about policing in this country.
AKIKO FUJITA: Malcolm Jenkins and Ralonda Johnson, it's good to talk to both of you. Really appreciate your time.
MALCOLM JENKINS: Thank you for having me.
RALONDA JOHNSON: Thank you.
