It took about a decade's worth of angel investing in this region before Mitch Brooks and Tristan Wilkerson decided it was time for the next step — a more formal investment fund aimed at founders otherwise overlooked by the venture capital world.
The partners have launched High Street Equity Partners, an early-stage venture capital and private equity firm headquartered in the District, to invest in more women and founders of color. And they’re raising a $15 million fund to kick it off.
Brooks and Wilkerson, both general partners of High Street, said they expect to close this first fund by next May. But they said they already had commitments for more than a quarter's worth of the $15 million target before formally launching in April, which Wilkerson said “demonstrates that there’s a big appetite, we believe, at this moment in time with what’s happening in the world in investing in Black-led funds.”
Their target investments
The duo isn't waiting to put their money where their mission is — they said they’ve put in a combined $400,000 of their own money to get the firm off the ground and make some initial investments.
Depending on the final raise, they’ll shoot to invest about $3 million per year over five years, in about 10 companies annually on average. Though, they said, that number could be closer to about five or six in this inaugural year.
Specifically, their firm is focusing on a few things:
- Underrepresented founders: As about 98% of venture funding goes to white males, High Street Equity Partners wants to back more of the 2% population — primarily people of color and women, with a special emphasis on women of color who face “a double whammy against them,” Brooks said.
- Underrepresented geographies: Roughly 88% of VC funding goes to five states — California, New York, Texas, Florida and Boston — “so our goal is to be intentional to go to some of these other markets,” including D.C. and Baltimore, Brooks said.
- Industry: The firm is industry-agnostic, though a couple points of interest include clean tech, the future of work and consumer-packaged goods, “because we also have expertise in those areas,” Brooks said.
- Company stage: The firm will invest in seed and Series A rounds for smaller or mid-sized companies that have finalized their technology or are starting to bring in actual revenue.
Already, they’re seeing the demand. High Street has received about 50 applications from founders just in the past 45 days. Brooks and Wilkerson have hired four people who are now doing due diligence on those applicants, Brooks said. “So we are committed and ready and prepared to make investments now.”
The duo's inspiration — and vision
While the two have been investing in ventures together since 2010, the coronavirus pandemic's brunt on small businesses and George Floyd’s death in 2020 changed things for them. “We felt strongly like this is the time where we need to do this,” Brooks said.
“We saw a number of businesses, especially minority businesses, that needed the support and capital. We saw some going out of business, but we also saw some flourishing and doing well, and they just needed the additional capital to help them continue to grow and scale,” Brooks said, pointing to hesitancy from banks and other financing partners in investing in those businesses.
Going forward, they expect to raise larger funds and have a bigger impact on the historically scant access to capital. “If we can improve that, then what does that mean long term for the health and lives, not just for our underrepresented and distressed communities, but by and large the health of our economy in the country?" Wilkerson said. "America’s diversity is its greatest strength, and right now, we have left so much on the table.”
High Street gets its name from a former historic corridor for Black businesses in Wilkerson's hometown of Little Rock, Arkansas. His family of sharecroppers settled along that strip, which is now called MLK Avenue, he said. So the name “is a prescient reminder of both the restorative impact we aim to have at HSEP and the wealth-building opportunities that exist in our diversity,” he said.
Wilkerson, now a resident of D.C.’s Petworth neighborhood, brings expertise in public policy and social entrepreneurship to the table. He started his career working for D.C. Del. Eleanor Holmes Norton, then founded social innovation consultancy Think Rubix LLC in 2017. He continues to lead it today, though he’s transitioning now to making HSEP his full-time gig.
Brooks, a sixth-generation Washingtonian, worked for Caterpillar Inc. out of business school in the Chicago area, before returning to D.C. to be closer to his mother with cancer. That’s when Barack Obama was elected president, and he stayed in the area to work with the Obama inaugural committee. He spent the next 10 years with government contractor Document Systems Inc., where he was chief operating officer until leaving in January for High Street.
“It’s not just the opportunity for doing the right thing,” Wilkerson said. “The return on investment is there, and the numbers say that — there’s just so much opportunity for actual growth.”
