Maybe it’s the time distortion field created by the pandemic. Contemplating the anniversary of George Floyd’s murder, the last week of AAPI Heritage Month, and all the excited utterances made by corporations, financial institutions, politicians, and others over the course of last summer, I keep hearing a tired old playground riddle in my head:
April showers bring May flowers.
What do Mayflowers bring?
Pilgrims!
Pilgrims? How about racial justice?
As this May slides into a new summer, there are many far more articulate voices than mine pointing out all the many ways America is still stalling on fulfilling its vaunted ideal of human dignity and equality. Fifty-eight summers ago, Rev. Dr. King famously framed the imperative this way:
When the architects of our republic wrote the magnificent words of the Constitution and the Declaration of Independence, they were signing a promissory note to which every American was to fall heir. This note was a promise that all men, yes, black men as well as white men, would be guaranteed the unalienable rights of life, liberty, and the pursuit of happiness.
It is obvious today that America has defaulted on this promissory note insofar as her citizens of color are concerned. Instead of honoring this sacred obligation, America has given the Negro people a bad check, a check which has come back marked “insufficient funds.” But we refuse to believe that the bank of justice is bankrupt. We refuse to believe that there are insufficient funds in the great vaults of opportunity of this nation. So we have come to cash this check — a check that will give us upon demand the riches of freedom and the security of justice. We have also come to this hallowed spot to remind America of the fierce urgency of now. This is no time to engage in the luxury of cooling off or to take the tranquilizing drug of gradualism. Now is the time to make real the promises of democracy. Now is the time to rise from the dark and desolate valley of segregation to the sunlit path of racial justice. Now is the time to lift our nation from the quick sands of racial injustice to the solid rock of brotherhood. Now is the time to make justice a reality for all of God’s children.
It would be fatal for the nation to overlook the urgency of the moment. This sweltering summer of the Negro’s legitimate discontent will not pass until there is an invigorating autumn of freedom and equality.
Where to begin?
Because injustice is systemic, there are few places in American — and, for that matter, global — society where inequity and injustices are not rife.
That is no justification whatsoever to give up or wait for some less fraught future. Rather it is every reason whatsoever to start right now, where you are, with what you have.
Not sure where or how to begin? A simple internet search on antiracist resources returns a slew of helpful sites focused on academia, business, parenting, research, faith-based communities, policy, and more. Seek, and you will find everything you need in order to learn, connect with others, and take action.
But I’m in finance. I have a fiduciary duty; I can’t just invest for social change.
Actually, besides merely being the right thing to do, there is significant evidence that investing for racial, gender, and social equity might be the best thing you could do for your returns — and may significantly reduce your risk exposure as well.
That bears repeating: besides merely being the right thing to do, investing for racial, gender, and social equity might well be the best thing you could do in fulfilling your fiduciary duty.
Once you get started, you may also discover there are many more compelling reasons to invest for racial justice, and many more ways to go about it, than you had ever imagined.
Again, there are excellent resources to help you raise your investment performance expectations along with your organizational, civic, and ethical standards. Here are just a few to give you a leg up:
How to Invest for Racial Justice
A Guide to Investing in First-Time Women and Diverse Fund Managers
Diversity, Equity and Inclusion (DEI) Working Group
Racial Equity & Impact Investing
A Guide to Investing for Racial Equity
How the Finance Industry Can Combat Racism
and specifically for philanthropists and donors, Decolonizing Wealth
Whether you are an institutional investor, trustee, consultant, advisor, family office, corporate entity, individual, or any other identity, and whatever your return expectations are from market-leading to wholly concessionary, there are numerous readily available tools to reshape your practices for the better.
One more thing.
There is no pipeline problem.
That also bears repeating: there is no pipeline problem.
The finance worlds do not suffer from a shortage of either qualified BIPOC talent or investable opportunities to advance racial equity. We do, however, exhibit a severely debilitating network problem, compounded by entrenched practices that perpetuate racial, gender, and social injustices though purportedly neutral standards and processes. These pathologies are entirely within our power to change.
We are pursuing racial justice through venture capital. Yes, you read that right.
Our investment strategy is unequivocally centered on racial justice. Reinventure invests exclusively in US-based companies led and controlled by BIPOC and/or womxn founders, at breakeven, and poised to grow profitably. We find far more high quality deal flow than we can engage, in the form of founder teams who are widely misperceived as low-return and high-risk, growing self-sustaining companies into economic engines that create wealth and opportunity for all stakeholders — investors included.* Moreover, many of these companies are commercializing profitable solutions to other social, economic, environmental, educational, financial, health, or other system-level problems.
We’re not alone, either. There is a growing ecosystem of fund managers and other investors channeling venture capital into strategies that deliver advantageous performance by advancing racial justice. You can find a small sampling of the community represented on our website under Channel Capital. Or connect with groups like VC Include, NAIC, or BLCK VC to access a more comprehensive census.
What will your May flowers bring?
There is no such thing as neutral. All investments have impact. If your investments aren’t advancing racial justice, they are sustaining racial injustice.
Pilgrims or racial justice? Which do you choose?
Are you already investing for racial justice? We would love to find ways to join forces with you. Please contact us. And please share so others can join you!
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Photo credit: Mila Young/Unsplash
*While there’s no such thing as a guarantee in investing and no one can reliably predict the future, Ed’s prior track record delivering 32%IRR to investors provides direct evidence that it is indeed possible to consistently invest for both financial returns and social value creation. If you are an accredited investor and would like to learn more about investments that can advance social, racial, and gender equity by supporting high-value companies led by women and/or people of color, please contact us to start that conversation.
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The information contained in this blog does not constitute, and should not be used or construed as, an offer to sell, or a solicitation of any offer to buy, securities of any issuer, fund or other investment product in any jurisdiction. No such offer or solicitation may be made prior to the delivery of definitive offering documentation. The information in this blog is not intended and should not be construed as investment, tax, legal, financial or other advice.