Black Venture Capitalist Says White Investors Think Blacks Can’t Build Billion Dollar Companies
By Giovanni Zaburoni
Troy Carter may not be a household name but he’s discovered some of the biggest pop stars in recent history like Lady Gaga and R&B singer John Legend. Besides managing the world’s top pop acts, Carter is also known as a very prominent investor behind successful companies like Uber, Spotify, and The Skimm.
With such a successful background, Carter usually doesn’t have much trouble finding people to invest in his ideas, that is until he and his two black partners decided three out of seven of their investments would have black founders. That’s when some investors decided to withhold their money from his latest fund. Instead of telling Carter they were concerned he would only invest in black founders, they told him despite his success in the past, they felt uneasy about his change in strategy.
Carter told CNN Money, “I said, ‘Who said African American founders can’t build a billion dollar company?’ It was them having prejudice against black founders.” There’s a name for what Carter encountered. It’s called “pattern matching.” According to CNN Money, in the investment world, “pattern matching” means investors want to do business with entrepreneurs who remind them of prior successes. While there are still a number of investors who are mostly interested in doing business with people who look just like them, other investors like Carter are seeking out business opportunities with minority run startups because they see the profit potential.
Carter is usually one of a few minorities in his field. There aren’t many black people managing pop stars but Carter held one of the few positions for a long time. He’s also a venture capitalist and only 2% of venture capitalist firms are black. Carter says when making business deals, his race never really occurred to him until people started questioning his investment strategies.
While race became a deciding factor in whether other investors would do business with him, Carter says he’s willing to work with anyone with ideas on the cusp of “global cultural shifts. We’re totally open.” He’s so open that he is investing in a 16 year old founder. His investment portfolio is diverse and Carter says he doesn’t make judgments based on race, gender, or age. He is one of a few investors that are willing to work with anyone as long as they have a good profitable idea. To the people who think they should only invest in people that look like them, Carter says, “anybody who thinks that way, I don’t want your money.”