The founder of a Portland-based investment fund focused on Black entrepreneurs said he’s being forced out.
Marceau Michel launched the Black Founders Matter brand in 2017. An accompanying investment fund was formed two years later. Michel said he launched the brand and the fund in response to the challenges he faced as a Black founder trying to raise capital.
Now he says he’s being offered $5,000 to liquidate his stake in the Black Founders Matter Fund and relinquish his claim on the brand.
In a June 7 email to fund partner Himalaya Rao-Potlapally and the fund’s advisory board, Michel rejected the offer.
“I created this fund to provide freedom, opportunity and dignity to my community. I trusted that though I lacked extensive formal training in Venture that those that came on board to realize this would support my vision and value what I’d created. I was wrong,” Michel wrote in the email, which he shared with the Business Journal. “The offerings you have made are a poor and damaging reflection of what Black Founders Matter is at its core. To protect what I’ve created it would be detrimental to allow you to abuse me, degrade me and devalue my contributions to this fund and the venture industry at large.”
“I have the capacity to continue to lead this fund. Any other assertions are false and not from me,” he continued.
In an interview, Michel told the Business Journal that his exit would mean there would be no Black people in leadership positions at the fund.
"Everything became about the fund and it was no longer about Black people," he said.
Michel maintains the current advisory board doesn’t appear to have any Black members. Rao-Potlabally disputes that claim and notes Zach Ellis a seasoned operator and managing director of a new venture capital fund in Houston, and who is Black, is also an advisor.
It consists of Chris Magana and Liz Valentine of Oregon Sports Angels; Aziz Gilani, managing director of Texas VC firm Mercury Fund; Ricardo Lopez, Oregon Growth Board director and investment strategist for Business Oregon. Not all members are voting members, some members, like Lopez are there to observe since they are investors in the fund.
Michel teamed with Rao-Potlapally in 2020 to kickstart fundraising. Since then, Michel has focused on the vision and brand building, while Rao-Potlapally has led operations. Earlier this year the duo marked the first close of Fund I, $3 million of the targeted $10 million. It has invested in 10 Black-led startups so far.
Rao-Potlapally said in a statement provided to the Business Journal that a separation with Michel was in the fund’s best interest.
“The decision to transition Marceau out of the organization was difficult, but made in the best interest of the Fund’s continued growth and success,” said Rao-Potlapally in the statement. “While not an easy choice, this transition ensures that the BFM Fund can continue to develop and grow in support of Black founders for years to come. The BFM Fund understands that while a new idea begins with a vision, it takes a broad variety of skills and tools to nurture it and make it grow. What is best for an organization at the start may not remain the best way forward, and we must make difficult decisions in support of the growth process.”
In an email to Black Founders Matter supporters, Rao-Potlapally announced Michel was leaving and an organizational rebranding to The BFM Fund. The email noted that she would be the primary general partner.
Rao-Potlapally told the Business Journal that part of the reorganization includes bringing three Black women into the operation, two in associate roles and one, a principal. The two associates are part of a venture education program that Rao-Potlapally is involved with. Like all fund participants, the positions are unpaid.
“We’re already in talks with a few more people, and over the next couple of weeks and through the summer, we’ll continue adding talent to this fund and advisory board in a thoughtful and intentional manner to preserve Black cultural representation and power dynamics within the Fund,” she said in the statement.
Michel said not drawing a salary running the fund has been a financial strain. He told the Business Journal that the fund is on the precipice of being fully capitalized and that is being used as a reason to push him out.
Michel said he intends to keep the Black Founders Matter brand and continue to advocate for Black entrepreneurs. He added that the fund, which is considered a micro-fund in the venture world, has had an outsized voice in the national conversation around diversity and equity in venture investment. He and the fund have been featured in the New York Times and TechCrunch.
On June 30, Michel testified before the U.S. House Committee on Financial Services in a hearing called: Combatting Tech Bro Culture: Understanding Obstacles to Investments in Diverse-Owned Fintechs.
“While this board has deliberated on how to push me out of my fund, I’ve continued to do my job of raising the bar and profile for my fund,” he wrote in an email to the advisory board.
This story has been updated to note that not all members of the advisory board are voting members and board membership.
