Some of the most powerful people in Greater Baltimore are supporting a new $50 million fund by Conscious Venture Partners that aims to invest in companies using innovation to create a more equitable society.
Director Jeff Cherry plans to use the $50 million fund to invest in 300 to 400 companies. The fund is a big increase from Conscious Venture Partners' first fund, which raised around $1.9 million. Many of the companies funded by Cherry come out of his Port Covington-based accelerator program, Conscious Venture Labs.
“With a small $2 million fund, we weren't able to continue to support the best companies that came out of the program, we were writing very small checks,” Cherry said.
Cherry has already raised $15.8 million for the fund, which is expected to close in the third quarter. Under Armour founder Kevin Plank's Sagamore Ventures is joined by the Port Covington Development Team, led by MAG Partners and MacFarlane Partners, for the lead investment of $2.5 million. The group's investment is joined by contributions from other notable Baltimore companies and individuals, including Brown Advisory; Capital Funding Group; Robb Merritt, president of Merritt Properties; former T. Rowe Price executive Mary Miller; and Guy Filippelli, of Squadra Ventures.
“The Conscious Venture Partners team has a proven track record of identifying and supporting diverse and innovative Baltimore entrepreneurs, which is critical to the future of the city," Plank said in a statement.
The fundraise has been more difficult than Cherry felt it should have been considering his track record and performance of the first Conscious Ventures Fund. However, he credited local support with convincing investors outside of Maryland, such as the Northern California Employers Joint Pension Plan, to become interested in Conscious Ventures.
Conscious Ventures Lab works with a variety of companies within that mission. They include Hungry Harvest, a company that reduces food waste, and Shea Radiance, a beauty products producer that now works with Whole Foods. Cherry views entrepreneurship through a stakeholder mindset, encouraging founders to look beyond just building value for shareholders, but also viewing a company as building value for employees and suppliers and other groups.
“It doesn't matter to us whether you're solving the water scarcity problem or making plastic forks,” Cherry said. “If you have a company that makes plastic forks, and you do so with a stakeholder mindset, you're going to have a tremendous amount of impact.”
Cherry plans to have three different types of funding opportunities for companies, most of whom will be graduates of Conscious Venture Labs. The first type of investment is what he currently offers, which is around $125,000 to select companies when they complete the Conscious Venture Labs cohort. The second type of funding is available for companies that Cherry has already invested in. They will get $250,000, or 25% of their funding round, at Conscious Venture’s discretion. The third type of funding, grants of up-to $1M, is for founders pursuing later rounds.
The new fund comes during a down market, where venture capital funding is reduced compared to other times. The down financial markets are making it even harder for Black and women entrepreneurs, with the amount of money going to Black-founded startups decreasing from over $1.3 billion in funding in the first quarter to $324 million in the second quarter.
“When we engage with HBCUs, when we find more female entrepreneurs that others overlook, I'm going to find ideas that are great ideas that other people have just missed, for all the wrong reasons,” Cherry said.
He believes that new accelerators such as the Techstars Equitech Accelerator, which was wooed to the region by Upsurge Baltimore, means there are more opportunities to invest in Baltimore startups than when Conscious Venture Labs began in 2013. Conscious Venture Labs is currently accepting applications for its ninth cohort.
