People

End racism. Make money. Kathryn Finney says Black entrepreneurs can do both.

Kathryn Finney's Genius Guild is raising millions to make sure Black people benefit financially from solving racism.

Kathryn Finney of the Genius Guild.

Kathryn Finney's goal is to invest in and support Black founders who are building solutions to end racism.

Photo: Genius Guild

Racism is prevalent, systemic and painful.

And it's due time for Black people to benefit financially from its eradication, Kathryn Finney, founder of Genius Guild, told Protocol. Her goal is to invest in and support Black founders who are building solutions to end racism.

And there's a larger question Finney, who has long worked in the nonprofit world, hopes to answer: "Is American capitalism big enough for all of us?"

The burden of solving racism oftentimes falls on those who are most marginalized — Black people and other people of color — she said, without any economic upside.

Ending racism may sound like a lofty goal, and the resources Finney is assembling may seem small against the sheer magnitude of the task. But she's starting with a $10 million venture fund, the Greenhouse Fund; Genius Guild Labs, an incubator for entrepreneurs' startup ideas; and Genius Guild Studio, which will help promote them. The idea is to tap into the vast amount of capital that gets left on the table due to anti-racist systems and practices, Finney said. The United States economy, for example, has missed out on $16 trillion by not addressing racial gaps between Black people and white people, according to a 2020 Citi Global Perspectives and Solutions report.

Finney has yet to raise the full $10 million for Greenhouse Fund, but said conversations are getting to the point "where we'll be oversubscribed." Separately, Finney has already raised $5 million from investors including Pivotal Ventures, The Impact Seat and others to support Genius Guild's operations. The investments in the incubator and studio are separate from the fund.

The Impact Seat President Barbara Clarke said Genius Guild's team provides Black entrepreneurs with access to "smart capital." That's novel, Clarke said in an email, because the tech industry has long excluded Black founders from access to both capital and the softer forms of support venture capital provides, like introductions to customers and help with recruiting.

Greenhouse Fund seeks to invest in three core areas. The first is restructuring capital in the Black community. Finney said she's looking at companies, for example, rethinking financial technologies for the Black community.

The second is healthy environments and healthy communities. Finney said she's been interested in solutions that help Black people get more involved in clinical trials; struggles recruiting Black participants for coronavirus vaccine trials have contributed to mistrust of the vaccines.

Belonging and connectivity is the final prong. For this area, Finney is looking at companies developing and connecting communities. She said technology like Houseparty and Facebook's Portal device have been a "lifesaver" for her mom and her friends.

There are already some examples of community-oriented startups for people of color, like Ethel's Club and Somewhere Good.

Finney said Greenhouse Fund is making early investments in companies founded by Black entrepreneurs. (She said she wasn't ready to disclose any investments yet.)

Genius Guild's thesis is something Finney said she had been thinking about for a long time. She had noticed businesses profitably tackling climate change, but hadn't found any examples of businesses addressing racism in that same way.

"With racism, it's usually a nonprofit or very detached approach," she said.

Finney stepped down from her nonprofit digitalundivided last year. "To be a black woman builder and innovator — to be me — in the nonprofit world is to be constantly undervalued," she wrote in an essay explaining her decision.

At Genius Guild, the plan is to tackle racism through innovation and create additional financial wealth in the Black community. Even her staff will share in the firm's carry, or the profits realized from successful investments.

"I feel like we should have some benefit from our pain," Finney said. "We are the victims yet we don't get ... the economic benefits that come from solutions. That is one of the underpinnings of Genius Guild."

Policy

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Fintech

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