Rashaun Williams Is a Venture Capitalist Who Gives the Game Away for Free; Have a Seat and Learn

[mson]

Mark HallContributor
CareersBusiness leaderrecent report from Pitchbook, the venture industry is on track to top $100 billion in investments in 2018.

Recently, I had an opportunity to interview Rashaun Williams, a Los Angeles-based venture capitalist and General Partner at the MVP All-Star Fund.


Williams, who’s notoriety comes in part from successful investments in companies like Casper, Coinbase, Ring, Lyft and Dropbox, among others, separates himself from others in the venture capital industry by being dynamic with the type of investors and companies he works with.

He is not a firm believer in keeping the historically traditional industry of venture capital traditional anymore.

From investing in high-growth companies alongside famous rappers like Nasir ‘Nas’ Jones to vetting investor pitch decks with retired NBA champions like Derek Fisher, Williams is leveraging his experience and network to open the doors to others who wouldn’t normally enter the space.

Williams and I discuss how he started investing, how others can get involved and what we should look forward to from his firm in the future.

Mark Hall: You are a successful investor with a number of well-known startups in your portfolio. Take us back to why you decided to get involved in the venture capital industry in the first place?

Rashaun Williams: Originally my company Value Investment Group was an investment and consulting company for urban businesses in Chicago. I started it while doing investment banking at Wachovia in Chicago. We had legal, financial and investment resources for SMBs in Chicago. I also started investing in companies in West Africa through a fund I launched called Dixsville Partners. We wanted to help countries like Liberia rebuild after civil war. Venture has always been my attempt to help communities and democratize wealth creation in the only way I know how – Finance.

Hall: How exactly does one become an investor or venture capitalist? What is truly needed? Tons of money? Access to people? Pedigree?

Williams: Anyone can become a VC if they have the following three things: 1. A process for evaluating companies that gives you the ability to pick winners who will go on and become successful companies. 2. Access to those types of companies to invest in. 3. Capital to invest in the companies. You can have the first two and raise the last one but can’t have the last one without the first two. I tell my mentees to start with a few hundred dollars while in college or high school, and when they interview for jobs in the future they will be able to discuss how they have been investing in companies for two to five years! Gives them a huge leg up.

Hall: You were recently awarded 'Investor of the Year' at the Black Enterprise TechConnect event back in October. Congrats on that. What do you think has separated your work from so many others in your space?

Williams: Thanks! It's good to be recognized. One of the things I think is different about what I am doing is you can trace it back for 18 years. I’m only 39 years old but I have been teaching founders and investors since 2001 when I launched The Kemet Institute. Actually teaching the same things I am teaching today but Instagram made it easier to deliver. I have also been investing personally for that long. I did my first LBO with my mentors back in 2003 when we acquired an industrial distribution company in Chicago. Today I think people see the personal passion, doing things my own way and how successful Queensbridge and Allstar Funds are.

Hall: The stories of wealth being created by either working or investing in tech startups is well-documented and glamorized by Hollywood. Do you think the 'cool factor' around startup investing will change anytime soon?

Williams: I think it’s the new luxury cars and jewelry for athletes and entertainers, and I love it! It's very healthy for us to finally put wealth creation as a cultural aspiration as opposed to consumerism. My job is for it to not change anytime soon. If it does, then I have not done my job. Be on the lookout for more ways I will try to push the culture forward and make investing more cool and accessible to our culture icons.

Hall: Who are the top five leading athletes and entertainers active in the investment world that you are impressed with and why?

Williams: This may be a shocker to you, but I will be completely honest and it’s not who you expect. The biggest names in sports and entertainment all partner with people who do all the work for them. Trust me I know - I did it myself for some of them! But there is an entire group that people don’t know about that are extremely impressive. 1. Retired NBA player Elton Brand. He interned at Morgan Stanley and is a great investor. Thad Young from the Indiana Pacers literally has his own VC fund, strategy and has invested in companies like Airbnb and SpaceX! Ray Lewis has a fund focused on tech, media and sports teams. Retired Super Bowl champ Ryan Mundy has Techlete Ventures, Derek Morgan from the Titans has Huddle Ventures and both can vet deals with the best of us. Retired Laker legend Derek Fisher and I spend hours reviewing pitch decks and financial models together! Ask any of them, all very impressive. I would put them up against any others any day.

Hall: I know you have your hands on a number of different projects and initiatives. Can you give us a preview on what we should expect from you in the coming months and years?

Williams: Three main things:

1. Launching my fifth Venture Capital fund, MVP Allstar Fund IV. It’s very well documented what we did with Queensbridge but what people don’t know is our Allstar Funds (we have done three in two years) are absolutely crushing it. The first one is up over 60%! Very excited to continue to build there.
2. I’ve noticed that the top 2% of athletes and entertainers have a full team to help them become great investors. I plan to solve that problem for the other 98%. I can’t allow another Kevin Garnett or Tim Duncan situation to happen where they get robbed for $15-77 million from their financial advisors. #noballerleftbehind lol
3. Not sure if people notice what I am doing on my Instagram, but I have helped over 25 founders raise capital, create pitch decks, data rooms, investor lists and find cofounders. My goal is helping 100 founders raise capital, all using social! Check out some of my posts and comments and you will see it yourself! Rashaun_williams

As I conclude the discussion with Williams, I can’t help but think we are just at the beginning stages of an industry shift where more participation in private investing is encouraged. If the passing of the JOBS Act is any indicator, things may be heading in that direction.

From my view, any environment where more people have more access to legitimate and vetted investment opportunities is a good thing.

 

[mson]

PAPER CHASING: HOW ONE MAN INFLUENCED YOUR FAVORITE RAPPERS’ MOGUL MINDSET
NDSMITH

DECEMBER 17, 2018


Don’t let anyone fool you. Hip-Hop is a billion dollar business with a bunch of folk in the culture not benefiting from its prosperity. It is not only the side-way record contracts and 360 deals gone wild that have artists on the outside of various wealth-building opportunities in rap music that prevents them from caking out. It is not even the aggrandizement of balleration (excessive amount of jewelry, clothes, cars and other fly stuff) that keeps them out of those really big money conversations. It is the lack of focus on portfolio diversity and access to the real money rooms. Morehouse man and former Wall Street executive, Rashaun Williams identified a way to not only shift the Baller Mindset to a Mogul Mindset with a core program and visionary knack for investment.

Who is Rashaun Williams? He is the investment unicorn that was the architect of Nas’ Queensbridge Venture Partners and the founder of the Kemet Institute. Now the founder and head honcho at the MVP All-Star Fund (Manhattan Venture Partners), he has athletes like Dwight Howard, Elton Brand, and Patrick Ewing partnering up with him.

The Source Magazine linked up with this power player to tap into his secret and further explore the magic that has made rappers like Nas one of the most sought-after venture capitalist in the game.

The Source: How do you explain venture capitalism to the average guy on the street corner?

Rashaun Williams: So from a practical standpoint there is no difference in being a venture capitalist, then the dudes that would come around the block and drop off a whole stack of drugs to 20 different kids. And whichever is the one that brings the most money back is going to be “that guy” that continues to be invested in. Some are going to rise to the top and some are going to fizzle. So what a VC is trying to do is to identify what makes a company successful. Then they say who can I find and what business model do they have that I can invest in them early and then I can help them become successful. So a VC is really just a person that is trying to do two main things: They pick companies that they think are going to be successful and then they poke them in the way that they should go so that they can become successful. We pick and we poke.

Now in order to keep picking companies, I need to raise money from people. It may be my own money. It may be some of my money and others, but people are investing their money with me because I am showing them that I have strategy to pick these companies and a technique to help these companies grow. So they look at my track record and they say ‘Rashaun has picked some winners. I want to invest with Rashaun.’

We are looking at the different ways that Hip-Hop artists have been investing this year. We know that you have been very influential in creating a lane for that. Can you talk to our readers a little bit about that process?
I never go into details about specific individuals’ portfolios and what they have done. However, I do go into details about what I do for the culture, what I do with investments and how I create investors.
That is interesting.
Yes, I make these guys investors (sometimes against their own will). They don’t want to be investors. They just want to be great at what they are doing. They see everyone getting money and they are like “How is Nas able to get all this money? He is not smarter than me!” And what all of them know, is that there is always someone behind the scene doing the work. There is someone behind Lebron. There is someone behind Kobe. There is somebody behind Kevin Durant. And then there is someone behind Nas, T.I. and all these other of guys. So I am out there turning guys into investors and letting them be great. I don’t need to be in the forefront. I don’t because I am just an investor and I don’t benefit from being in the forefront. I am happy to elaborate on what I have been doing for the last eight years with sports, entertainment, and tech. It is becoming more popular now but when I started doing this eight years ago, I couldn’t even convince these guys to put money into companies. They all wanted money out. Over the last few years, people are starting to see the results of becoming investors. Now my job is easier today than it was back then.

Let’s start there. What made you leave your cushy Wall Street job to engage the culture in this way? When did you get the light bulb and said: “Hey let me speak to them and redirect some of this wasteful money that they have?” How did you discourage them from buying all these gold chains and encourage them to do something for the community that they come out of?
In 2001, I started a non-profit called the Kemet Institute and its goal was to teach people in our community about financial literacy and how to invest. I was basically taking everything I was learning on Wall Street and giving it back to the community. It took me 12 years to figure out how to combine the two things: The one thing I was really good at “investment” and the other thing I was really passionate about “my own community.” I figured out how to blend the two. What I do now is serve as an active investor, but I also teach and coach others in the culture how to also invest. What I love most about that is that now the culture is shifting to the mindset of “I want to be an owner, instead of a consumer.” It has started in this generation to trickle down to the kids. Everyone wants to be the founder of a company. Everyone wants to be a VC (Venture Capitalist). This cultural shifts started with the leaders in our culture.

Why do you think that is?
I attribute it to a few things making it a little easier. Look at Beats by Dre and the company getting acquired by Apple, Jessica Alba with the Honest company or 50 Cent and his Vitamin water. Also look at what we did with Queens Bridge. Our culture is a “show me” culture. You see people who are leaders in our industry and they see them making millions and billions of dollars by either founding their own company or investing in one and they want a piece of it. That’s why I left Wall Street. I wanted to focus on investing instead of advising. Most of my clients were billion dollar, white, institutional and family office clients. I wanted to not only work with them but work with my own community. I wanted to offer my community the same type of investment advice that I was offering my clients at Goldman Sachs.

Why?
Because we weren’t getting that level of access to education. Just go to my Instagram and you will wonder why there aren’t 50 other Black VCs out there helping Black investors and founders learn how to invest. Not only invest, but are there no other Black VCs teaching our people how to raise money. I am working to bridge this gap between pop culture, technology and investing. That is why I left Wall Street.

You are different from other entertainment execs in this space (Troy Carter, Steve Stoute) because you bring something that they lack. While they bring their entertainment knowledge to the table, you bring finance to the table. Would that be accurate?
Yes. I would not say that these guys are not as sophisticated as I am, but we all have a different approach to the same goal. I never sat down and spoken to them about their strategies, but my approach is two-fold. My first approach is education first. Everything that I do and everything I learn comes from a space of educating people. And what makes me different is that you can see this for free. You can see it in things I say in the press. You can see it on my IG. You can see it on YouTube. You can see it on my website. Most people know me because I have taught them something about investing in tech. Now, very few people have actually invested with me. So that is evidence of how I first lead with education.

Are there any stories of athletes or entertainers that made you sit back and say, I got to help them? When you look at the landscape are you thinking that you have to educate them first because they are the leaders in culture?
Celebrities and Influencers are at the pinnacle of our culture/ community. There is value across the board. I have taught sixth graders and college students, but I have also taught nurses and doctors. These are all people that look like us. What we all have in common is that we were not taught financial literacy. So when you consider celebrities, of course, they get most of the attention, but the work that I have done goes far beyond athletes and entertainers. I did not look at our culture and see a particular thing and said, this thing has sparked an interest. It was more so watching other cultures make billions of dollars every year and watching how they institutionalized the process of making billions of dollars. By doing that, I noticed how we did not have that. I thought to myself, look how successful they are and how they transferred this through generations.

The same way that we transfer NBA players through generations, we transfer Hip-Hop artists, R&B singers through generations. There is no coincident that Zion Williamson is going to be the next Lebron. That thing has been worked on for decades (maybe before he was even born). That system is not only culturally celebrated but there are systems in place like the AAU, high school, colleges, scouts, they will have you carrying a basketball all around all day. That young man because cool and celebrated in our community but in other culture, other things are celebrated. I am hoping I can help our culture also celebrate finance and education. And who better to focus on that the leaders of our culture.

Where do you teach? At the Kemet Institute campus?
Kemet like I said earlier Kemet is a 501 c3 non-profit. We provide services to schools and to individuals. Anyone can learn from this institute. We came up with a concept called “L.I.F.E Schools.” L.I.F.E. stands for Learning Integrating Financial Literacy and Entrepreneurship and we go to schools and help them infuse financial literacy and entrepreneurship into their curriculum.

You have to meet our culture where they are. If I want to talk about finance, I can’t go into the schools to talk straight. These young people are like “I grew up on the South-side of Chicago and I had to worry about getting home and not eating that night.” So someone sitting there talking to me about stocks and bonds is just a waste of my time.

 

[mson]

The young people you teach?
Yes. Where are all of these kids? They are in the digital media space and so I meet them there and I speak to them in a language that they speak. I also go to the schools and I look like them. You can’t be a person on the outside of the culture, trying to come in and influence. You have to meet them where they are.

My first class that I taught in the Kemet Institute was on 88th and Princeton on the South-side of Chicago to a group of seven kids that were selling drugs. That is the neighborhood I grew up in and I stood out there with those young people. I taught them how finance and investments work and I spoke to them in the language that they spoke. So when you look at my social, you will see most of them are founders and investors and I am speaking to them in their language. But if you look at my Linkedin, you will see something completely different group of people and I still speak to them in their language. When I speak at Villanova, it is different from when I speak at Morehouse. Meeting them where they are, giving them what I know they need and breaking it down so that it is simple and relatable has always been my approach.

Though you have worked with Nas and his QBVP, we see that you have gone against investing in entertainment companies. There are a lot of practical things. Is that a strategy?
Yes. There is no entertainment strategy when it comes to investing. Like Queensbridge Venture Partners was not a fund we set up to invest in entertainment companies. To go deeper, here is the strategy for Queens Bridge. We recognized that out of all the companies that were making money in Silicon Valley, it was the same 20 investors that was investing in them. Most people don’t notice that. But if I asked you, out of all of the Black dudes that go to the NBA, “What schools did they come from?” You could probably 10 to 20 schools that they keep coming from. They keep coming from Duke. They keep coming from North Carolina. It’s the same 20 college programs that all the key people that get drafted come from. Well in Silicon Valley it is even worst: The same 20 VCs that keep making all these unicorns. So our strategy with Queens Bridge was to invest with the winners. So we didn’t necessarily have a sector that we were focused on. We weren’t the smartest guys out there trying to find the next artificial intelligence. That wasn’t our strategy. Our strategy was to co-invest with the companies and VC firms that were making all of the winners.

Now here is the part, that is probably most important to The Source’s readers: Why would they let us co-invest vs. anyone else?
The answer to that is “the culture.” The only two groups that get access to the best companies in the world are top 20 venture capital firms and guess who else… athletes and entertainers (who mostly happen to be Black!). You can see what my incentive is in being a VC (that in addition to helping my who community). Also, if I wanted to get my own money into the best deals in the country, I have to educate, support and encourage all of these athletes and entertainers to invest, so that we can all invest together.

Is that how this works when you see a celebrity with these opportunities?
Often times you will see one celebrity that is an investor in a deal, but there really will be 25 of them really investing behind him. You just will never know. That’s what we are doing. We are using the influence of the Hip-Hop culture to get into the best deals. We are not trying to compete with those top 20 VCs, we are trying to get a piece of the pie. We are not going to fight over 5% of returns, we are trying to get into the 95% of returns.

Reverend Run used to say that you can’t help the poor if you are one of them.
Yes, that’s one angle. We do want to make money. But I don’t even want to look at it from the making money side. We are going to make money either way. These artists and entertainers are going to make money, so no we are not solely driven by making money. What I think the bigger motivation is that we know that pop culture, our culture, is a strong contributor to these companies being worth billions of dollars. We haven’t gotten a piece of that. We want a piece of that.

Would Beats by Dre be worth two billion dollars to Apple had it not been for our culture? Would Spotify not be worth 25 billion dollars had it not been for our culture? I don’t think so. All of these investors that make billions of dollars of this (and they make that every single year) less than .00001 of those billions have been people from our culture. Ultimately, what we are trying to do is get a piece of this thing that we are helping to create.

Closing out: What are three things that the Hip-Hop community should know about this space?

The first thing I would say is if they are not winning in tech, it is because they have too many Urkels on their team. So their “wins” are low. (Shout out to Kanye West). What tends to happen is that people tend to get all of these deals and from all these people who are not investors, who are not experienced in this and then they keep losing money.

Secondly, speaking of wins, the reason why people come to me is because they want a winning strategy. I have a long track record of 18 years of winning in this space. So I give that track record to those dudes for free. Here is how we win. For me, the reason I do it is the same reason why basketball players do clinics in their communities. They are teaching kids how to play basketball because it is easy for them (they have played basketball their whole lives). I am like a tech coach and I am helping everyone create a winning strategy.

Third, you have to be a practitioner and not a reporter. Be an expert. I am not on IG passing on information that I read from someplace else, this is actually what I do for a living. These are companies that I put my own money into. This is also what I do every day. This is also the only thing that I have ever done.

Those are the top three things I would want people to know.




Paper Chasing: How One Man Influenced Your Favorite Rappers' Mogul Mindset

 

[Art Barr]

Wow...
He went to Hyde park.
I went to high school there too.


Art Barr

 

[mson]

 

[Moonlight Knight]

so how much money did that $25K flip into?

 

[mson]

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[mson]

 

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[mson]