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The Challenges of Local Investment


  • Scott Elmquist
  • Jim Ukrop
This week, an article in The Times-Dispatch inadvertently helped explain how wealth manages to stay concentrated in the hands of a particular group of people.

New Richmond Ventures, a venture capital firm headed by Jim Ukrop, Bob Mooney and Ted Chandler, assembled a $33 million investment fund to help young companies grow.

So who is New Richmond Ventures helping to grow?

There's Health Warrior, which makes chia bars. Style has written about its story and talked to co-founders Nick Morris and Dan Gluck, and chief executive Shane Emmett.

NRV has also helped to Nutriati, which makes protein powder, cofounded by Richard Kelly and Michael Spinelli. It's also given funds to Alexandria-based Territory, makers of packaged meals, founded by Patrick Smith, Jeff Kelley and Robert Morton.

There's a pattern here, and it's not just health food and nutrition.

NRV mirrors a common demographic in the venture capital world where 89 percent of partners are white men. But in a city that's only around 41 percent white, it should be surprising that this transfer of wealth is so starkly pale and male.

Asked if NRV had invested in any women- or minority-owned businesses that it wanted to highlight, Liz Doerr, director of engagement for NRV, mentions Kim Mahan of Maxx Potential, which it funded via a previous portfolio.

Doerr is aware of the lack of diversity in the founders this round, though she notes the presence of female and minority leadership at the companies. There are a lot of challenges to exposing diverse business owners to a network of opportunity in private investment, Doerr says. "But it's definitely an explicit goal of ours."

Doerr, who also represents the first district on the School Board, referenced a famous study that had female founders and male founders pitching identical companies. The men were 60 percent more likely to get funded. Harvard Business Review has also written extensively about the issue.

NRV makes an effort to attract more diverse investors, Doerr says. Twenty-one percent of the people that contributed to this last $33 million pot are female or minorities, which is nearly double the national average, Doerr says.

"My philosophy is if you can attract more minority and women investors, you can mitigate some of that unconscious bias," Doerr says.

Doerr started Women in Venture, a local initiative to expand the ranks of female investors. Two events — one sponsored by NRV — have drawn over 230 potential investors. "There's a real need in the community," she says.

The three companies highlighted in the Times-Dispatch article are the first in about eight to twelve that NRV hopes to fund in this $33 million round.

"We obviously have a lot work to do," says Doerr.