Florida A&M University (FAMU) is one of a number of Historically Black Colleges & Universities (HBCUs) to benefit from a Base 10 Partners initiative to donate 50 percent of carried interest from its investment in pre-initial public offering (IPO) startups to create student scholarships and support university endowments.
The move builds on Base 10 Partners’ VC Diversity Pledge to raise a new $250 million fund with the mission of aligning the success of technology companies with wealth creation for underrepresented minorities, the company announced Thursday. FAMU students stand to repeat significant benefits from this partnership, said Shawnta Friday-Stroud, Ph.D., vice president, University Advancement and executive director for the FAMU Foundation
“There is incredible alignment among the missions of FAMU, the FAMU Foundation, and Base 10 Partners,” said Friday-Stroud. “I am so excited that our Foundation Finance Committee and Foundation Board voted to invest in Base 10 Partners. This investment will pay multiplicative dividends for our current students and future Rattlers for generations to come as well as society at large.”
Founded by Adeyemi Ajao and TJ Nahigian, Base 10, the San Francisco based venture capital firm, focuses on automation impacting many sectors of the Real Economy, including transportation, hardware manufacturing, logistics, and construction. Portfolio companies include The Pill Club, Chili Piper, Popmenu, and Pangaea.
Since debuting in March, the fund has already completed seven investments into Attentive, Nubank, Brex, Plaid, Aurora Solar, Wealthsimple, CircleCI, and KeepTruckin.
Each of the CEOs personally prioritized taking an investment from the Advancement Initiative in heavily oversubscribed rounds in order to prioritize the mission of wealth creation for underrepresented minority communities. Base10 will create scholarships in the name of each of these portfolio companies to fund the education of HBCU STEM students, i.e. The Plaid Scholarship, The Brex Scholarship, etc.
“The Advancement Initiative creates a clear path for us to contribute to the success of underrepresented minority students who will go on to be the leaders and innovators of tomorrow, and we couldn’t be more excited to be participating,” noted Zach Perret, co-founder and CEO of Plaid.
HBCUs are enormously important sources of underrepresented minority talent in the U.S. They confer nearly half of all STEM degrees for African American students, yet all 107 endowments combined are equal to just 7 percent of Stanford University’s endowment. Importantly, about one-third of the student population come from households under the poverty line.
According to the U.S. Government Accountability Office, HBCUs have $15,000 on average in endowment per student. Comparable non-HBCUs have $410,000 on average in endowment per student, demonstrating the comparative disadvantage of HBCU endowments.
“We have been thinking about where to focus Base10’s efforts to do more good through strategic investments, and we believe supporting HBCUs is the most effective way for us to augment underrepresented minority talent in Silicon Valley,” said Ade Ajao, co-founder and managing partner of Base10.
The fund’s LP base consists of HBCUs with participation from other minority organizations and mission-driven foundations who all serve as part of the engine contributing to augmenting underrepresented talent in the workforce. In addition to FAMU, notable HBCU limited partners include Howard University, Tuskegee University and others. This is one of the largest commitments ever from HBCUs to a venture capital fund.
“HBCU endowments have historically had very limited access to venture capital and other technology investments. The Advancement Initiative not only creates a hard-to-replicate, direct access point but helps prioritize HBCUs in such an incredibly competitive asset class,” said Marcelia Freeman, a member of the FAMU Foundation Board of Directors. “We are so very excited about our partnership with Base10 and about the impact the team can deliver across our precious ecosystem – our students, our alumni, our endowment.”
Notable foundation partners for the Advancement Initiative include MacArthur Foundation, Public Welfare Foundation, Sorenson Impact Foundation, KFF, Silicon Valley Community Foundation, The McGregor Fund, Plexo Capital, The Harry and Jeanette Weinberg Foundation, and the Kapor Foundation.
Together with the Advancement Initiative, Base10 is also creating the first year-long, on-campus training program for HBCU students together with internship & full-time placement programs. This program will soon be active on 13 HBCU campuses including FAMU, Morehouse College, Spelman University, Howard University, Hampton University, and NC A&T State University. Base10 expects 400+ students will go through the program in the first year, increasing to 1,000s annually over the next 5 years, focusing education on software engineering, design, entrepreneurship, and venture capital. Base10 is working with the Black Venture Capital Consortium (BVCC) and recruiting engineers and leadership from the Advancement Initiative’s portfolio companies, as well as other partner organizations, to serve as program mentors.