Source article: San Francisco Business Times

Santa Cruz Works is happy to announce Oakland Black Business Fund (“OBBF”) has joined Z Hacks 2020. Z Hacks participants can create projects which support OBBF’s funding drive.

The OBBF was created by Elisse Douglass and Trevor Parham, who are experienced investors, entrepreneurs and real estate developers. The original aim of the fund was to support Black-owned businesses in Oakland that were vandalized during the protests. But after raising $150,000 the duo saw that the potential of their efforts could be much greater. The OBBF now plans to raise $10 million in relief grants to help local Blacked-owned businesses and then launch a series of investment funds totaling $1 billion over the years that will be accessible through an a investment platform, similar to an early growth venture fund.

Black business owners often get shafted when it comes to accessing capital, both historically and in recent times. According to the Brooking Institution, large banks approve just 29% of Black business owners’ loans, compared with 60% of loans sought by white business owners. Even worse, Black founders receive less than 1% of venture capital.

On top of that, Parham said that Black-owned businesses are twice as likely to fail during the pandemic. Parham calls the historic lack of access to capital combined with the recent challenges of Covid a “double threat.”

“These businesses have a structural institutional double threat that they’re faced with,” said Parham.

The $10 million relief fund will target 500 businesses with the average grant being $20,000. Parham said he aims to raise all of the money over the next year or so through a mix of individual, public and private foundations and government donors. To date, they have raised $150,000, have received 50 applications and dispersed grants to 20 businesses.

Parham said that they are close to closing funding deals from Bay Area tech titans, like Facebook, Lyft and Square.

While the relief fund will be under a nonprofit structure, the $1 billion investment fund will be a for-profit enterprise, with the capital being raised from limited partners like it is in venture capital.

The venture fund for Black founders will evolve over time with a series of different types of funds becoming available as capital is raised. But in general the $1 billion fund will fall into two buckets: a $500 million venture fund for Black founders and a $500 million real estate fund.

Queen Hippie Gypsy is located in downtown Oakland and sells a mix of items and trinkets linked to improved spiritual wellness, like crystals, bath salts and candles, and in pre-Covid times hosted community events upstairs.

Ayers said they are offering curbside service and sell products on their website. As of late, the store is generating 60% to 70% of revenue before the shutdown, which is pretty good, considering.

“We are blessed,” Ayers said. “We definitely took a hit but others had it much worse.”