Headquartered in Atlanta, the Fearless Fund founders Arian Simone and Ayana Parsons look for "unicorn companies" to invest in.
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LifestyleTranscript
00:00 I think that professional women sometimes get that image
00:03 that they don't like to have fun,
00:04 but I can tell y'all both do.
00:06 So what's that song you just said
00:07 that makes you feel good, makes you feel empowered,
00:09 makes you feel like I can step in here in the Fearless Fun
00:12 and just have a great day?
00:13 - "Lotta" was given.
00:14 - Yay!
00:15 - Okay, okay.
00:16 - See, love that.
00:17 (upbeat music)
00:21 - We're in the Fearless Fun Summit in ATL.
00:27 Can you guys let me know what we can expect today,
00:30 what we're gonna be seeing just throughout the venue
00:33 for the rest of the day?
00:34 - There is gonna be a lineup of special guests
00:36 and it looks like pop culture meets venture.
00:38 And the reason why,
00:39 these are people who most of the audience will know,
00:42 but what they do not know
00:43 is that they actually have a role in venture capital.
00:46 They are investors, they are business owners,
00:48 and they also acquire businesses, some of them as well too.
00:51 But majority of the day,
00:53 you will see our portfolio companies
00:54 share about their businesses
00:56 as well as our investors and our partners
00:58 share about their role with us.
00:59 So it's a full day of venture education,
01:02 entrepreneurial education,
01:04 and just education as a whole about being an investor.
01:06 - You all are headquartered in ATL, correct?
01:09 What makes this city so special?
01:11 Because you see other venture capital firms
01:14 being positioned in other departments, other areas,
01:18 but what makes ATL so special to both of you all?
01:20 - Well, listen, the A is the black Mecca.
01:23 You know, black people are starting businesses
01:24 at a higher rate than any other demographic,
01:27 specifically black women.
01:28 This is where all black women and brown women
01:31 are starting those businesses.
01:33 So it was very important for us to be intentional.
01:36 Intentionally here in the A, for our headquarters,
01:39 our team is located all across the country,
01:42 but our business is founded here for us, by us,
01:45 and that will always be the case.
01:47 - Do you all see a lot of Atlanta-based companies
01:52 come to you all, or is it just worldwide?
01:54 What is some of your clientele that are, you know,
01:56 people that would hope to be your clientele?
01:59 - We receive applications,
02:01 not just nationwide, but worldwide.
02:03 - Okay.
02:04 - There are areas where we do see talent
02:06 that's concentrated.
02:07 - Right.
02:08 - The Southeast and Atlanta is one of those areas.
02:10 Any area that's highly populated with women of color,
02:13 we're gonna have an influx of applications from them.
02:16 So we definitely see talent from all over the world,
02:19 but yes, there are certain areas
02:21 that are more concentrated than others.
02:23 - Absolutely, absolutely.
02:23 - So for fun, we invest in consumer packaged goods and tech,
02:27 and we have founders in Atlanta that we've invested in
02:30 that are starting businesses in both of those spaces,
02:32 and I think that will continue to be the case.
02:34 - As black women in this space,
02:35 I know that you guys have probably had to deal with backlash
02:38 just because it's one of something that's very niche.
02:42 How do you both handle that?
02:43 How do you just kind of just shake it off
02:45 and not really deal with being kind of one of the only,
02:48 or one of the only venture capital
02:50 woman of color owned spaces?
02:53 - Yeah, I mean, we are pioneers in this space,
02:55 and we've quoted Vice President Kamala Harris
02:59 that we may be the first,
03:00 but we certainly won't be the last.
03:02 And it's gonna take hundreds and thousands
03:04 of fearless funds to close the wealth gap
03:07 and really drive economic freedom in this country.
03:10 So for us, we just keep our eyes on the prize.
03:12 We know we're here for a higher purpose.
03:14 We've been at this for four years, almost five years.
03:17 And for us to be attacked after doing this work,
03:21 while it's disheartening, we know that we're built for this.
03:25 - Absolutely, absolutely.
03:26 I feel like very much similar to when you start a business,
03:28 you really have to have a strong backbone.
03:31 For you all, venture capital,
03:33 how important is that to know just what it is
03:35 as the black community?
03:37 I was just having a conversation earlier
03:38 how sometimes we feel like we don't have any help
03:40 or it's very hard for us to get help.
03:42 So how important is venture capital
03:44 when starting your business?
03:45 - Venture capital is very important
03:47 if you plan to be a unicorn business.
03:50 There's other funding options out there.
03:53 I wanna be very clear about that.
03:54 That may be your funding solution
03:57 in addition to looking at venture capital.
03:59 There's still other options.
04:00 There's always the healthy $15 million revenue business
04:04 that may not need venture capital.
04:07 Venture capital is for high growth businesses.
04:10 It's aggressive.
04:11 We're looking for businesses that can grow
04:12 and scale at a rapid rate.
04:14 Not just at your own leisure.
04:16 So venture is not for everybody,
04:19 but is it important?
04:21 Very much so.
04:23 So important that it's one of the biggest drivers
04:25 in building generational wealth in this country.
04:28 That's how important it is.
04:29 - And if I could build on that.
04:31 So historically we thought of unicorn companies
04:33 as a billion dollars in revenue and more.
04:35 When we look for companies to invest in,
04:38 they've gotta be able to return the fund.
04:40 And what do we mean by that?
04:41 So our first fund was a $25 million fund.
04:44 So if we make an investment in a company
04:46 and we've invested in over 40,
04:48 they have to be able to generate 25 million in revenue
04:52 or more in a short amount of time.
04:54 So now as the stakes are higher
04:56 and we're raising fund too,
04:58 they need to be able to generate a hundred million
05:00 in revenue to be able to exit.
05:02 And that means get acquired by another company,
05:05 acquired by maybe private equity or even go public.
05:09 - Yeah, yeah.
05:10 That's a really good point.
05:11 What you said about not every company
05:13 needs to go venture capital,
05:15 but it's about what the scale of your business is.
05:17 I don't think I even knew that.
05:18 So that was great.
05:20 Do you feel like it's necessary to go this route?
05:22 So if you do wanna scale your business,
05:24 is venture capital where you should start
05:26 or what does that process look like?
05:29 - Yeah, I mean, there's so many options.
05:31 So venture capital is equity-based financing.
05:34 So what that means is we take an ownership stake
05:36 in your company to help you scale and grow.
05:39 There's also so many options.
05:41 I mean, we have a grant program through our foundation.
05:43 This is essentially free money
05:45 to help you grow your business.
05:46 There's also something called debt-based financing, right?
05:49 So you can get loans to help you grow your business.
05:51 Now you pay those back.
05:53 And certainly with venture, it is incredibly risky.
05:56 And when we place a bet on an entrepreneur,
05:58 we expect to have a return on that investment.
06:00 So the stakes are even higher,
06:02 but that's just a range of ways.
06:04 I mean, black and brown women have been bootstrapping
06:07 since the beginning of time.
06:08 We have both done it ourselves as entrepreneurs
06:11 and just done it with our own money.
06:13 So that is also an option as well.
06:16 - So with you all saying,
06:19 when you kind of tap into this venture capital,
06:21 we're expecting you to scale your business at a fast pace.
06:23 What are some of those businesses you are sort of seeing
06:26 come into your portfolio that are being successful?
06:28 - All right, Slutty Vegan, Lip Tinted, we've got a bunch.
06:32 - We have so many,
06:33 and they've also been featured on Essence.com.
06:35 - Absolutely, yeah, yeah.
06:36 - She said Slutty Vegan, Lip Tinted, The Lip Bar, 13 Loon.
06:40 The list goes on and on.
06:42 Partake, we have been blessed
06:45 to be able to back a lot of the hot
06:47 women of color startups that are out there.
06:49 - Yeah, yeah, I love that.
06:50 If you're looking to start a business,
06:52 what is some advice you would give someone?
06:54 And I'm sure you get this question a lot,
06:55 but just particularly for the Essence audience
06:58 who are entrepreneurs,
06:59 who come to Essence Fest with businesses and ideas.
07:02 What is just some advice
07:03 you would specifically give the Essence audience
07:05 if they're looking to start their business?
07:07 - I would start with playing with the end in mind.
07:09 You need to know what your end game is.
07:11 Are you looking to have your business get acquired?
07:14 Are you looking to go public?
07:15 Because then every step you take will dictate that.
07:18 So you wanna make sure that you know
07:20 what your end game is at the start.
07:22 - The other thing that I will say,
07:24 a lot of entrepreneurs have conviction.
07:26 So you need to have conviction
07:28 and that passion to start a business,
07:30 but you also need to have a level of agility.
07:32 And what I mean by that is,
07:33 there are times when you might have
07:35 to pivot your business model.
07:37 The economy does its thing, it goes up and goes down.
07:40 And the more agile you can be and pivot when you need to,
07:43 that's when I think we've seen incredible success
07:45 with some of these entrepreneurs.
07:47 - Then last question, a little fun one.
07:48 What is a song you just love to get ready to?
07:51 I think that professional women sometimes get that image
07:55 that they don't like to have fun,
07:56 but I can tell y'all both do.
07:58 So what's that song you just, that makes you feel good,
08:00 makes you feel empowered,
08:01 makes you feel like I can step in here in the fearless fun
08:03 and just have a great day.
08:05 - "Lotto is Given."
08:06 - Yay!
08:07 (laughing)
08:08 - Okay, okay.
08:08 - We love that.
08:10 What about you?
08:11 (laughing)
08:12 - Okay, y'all gonna laugh at this one,
08:14 but I'm a big sports fan and I love me some Coach Prime.
08:19 So when he came out with, who was Swag?
08:22 - Yep, okay.
08:23 - Right?
08:24 - Yeah, yeah, yeah, yeah, yeah.
08:24 - I used to wake up to that every single morning.
08:28 So if you wanna know my hype song, this is Coach Prime.
08:31 - Well, I'm from the South, so I appreciate that.
08:33 Thank you ladies so much for talking to Essence Magazine
08:36 and we look forward to seeing the day.
08:37 (upbeat music)
08:40 (upbeat music)
08:43 (gentle music)
08:45 (upbeat music)