Hello and welcome to the LA venture podcast. This is Minnie Ingersoll host of the podcast and partner at TenOneTen. TenOneTen is a seed stage fund here in LA. All opinions expressed on this show by me and my guests are solely our own.

Minnie

Taj Ahmad Eldridge is one of the founders of a new $250 million fund, Include Ventures.

Include Ventures is split between a $125 million fund of funds and $125 million for direct investments. Include Ventures is a brand new fund that Taj started with Keith Spears and Bahiya Robinson. For the past two and a half, almost three years, Taj has been director of investments at LACI, the Los Angeles Cleantech incubator.

Taj. Thanks so much for coming on the pod.

Taj

Minnie. Thank you so much. Thank you so much longer way. Thank you for this. Love, this

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Minnie

Yeah. Well, longer LA, now that now that Include Ventures exists, I'm very excited. maybe starting, just tell me more about this new fund.

Taj

Yeah. Well, you know, the, the conversation happened about, ironically or your prior to last year. And last year, there's been a lot of talk about diversity in our industry, but it started all around with a conversation with a high net worth individual about how can you truly reduce the wealth gap? My answer was ownership. Ownership can happen whether or not the company is founded by a founder of color.

If that of a person color has ownership in the company. If they're invested in the company, if they're hired in C-suite, that creates wealth, that creates ownership. And I looked at two ways from it. I looked at the PayPal mafia and how that was created. Right because none of those were truly founders.

But they were part of the ownership that then branched out. And then since we're an entertainment in LA, I looked at some people might realize the Wu Tang clan, which is similar to that, that came together, created an organization in branched out. And each one's a different, different labels and have ownership there.

Minnie

You compared Wu Tang to PayPal, which I thought was, was good. Was good. That

Taj

Absolutely. I have to give you my, I have to give you  my, my music founder analogy, founders are like artists. Venture funds are like record labels because they fund the artists or fund the founders, accelerators and incubators. I like the radio stations, a Spotify. That's how you discover the great artists of the great founders.

So that's my little music analogy there.

Minnie

So is Peter teal then like ODB or like

Taj

Yeah should make for people too, but I, you said you're getting, if you're getting it, that, that, that is the LA way. That's the LA venture that's Elliot venture that his soul is bridging entertainment and venture and all sort of stuff we can go on.

And so that's what started started this whole conversation about inclusion ventures. I was lucky to have two partners would be here. Robinson, a key spheres. Keith spheres came from the institutional investment with CalPERS and Hamilton lane. Who was, who was famous for funding Vista equity partners. And then, but here Robinson, but he has started VC included about four years ago as a way to give more. More people into, of color, into venture and venture funds. And I'll be honest, when I, when I first was, was at a bit, the first venture fund I was at, you know, outside of taking Bradfield venture deals, there was really nothing else out there to really kind of train you

I mean, you have things like the Kauffman foundation, but. $80,000. And so, you know, we, we, we came together and that was the first part of that

Minnie

Okay. So BC include was started a couple of years ago, not to be confused with include ventures because they sound kind of similar.

Taj

think of VC clues  as an accelerator for fund managers. It provides training and provides platforms services and include ventures was started because we already have all these relationships with these funds that we've trained as emerging fund managers. So that's why it made great sense to start a fund, to be able to fund.

Minnie

Got it. So, VC includes started as kind of a platform for diverse managers, but there wasn't funding behind it to actually invest into their funds.

Taj

Absolutely. Yeah. And it was funny. I sent a tweet out recently and it kind of caused a little bit of a controversy where I said that we have enough mentoring. We need business, we need to do business together. Right.  And I'll be honest when, when I was in the fund, I remember emerging management programs that was so hard to get into as an emerging manager.

They sh they might as well not even call it an emerging manager program.

Minnie

Okay.

So, yeah. Tell me a little bit more. I think it's a first time fund managers. Usually people raising 10 to a hundred million.

Taj

Yeah, absolutely.  it's working with fund members that are majority owned by black or Brown individuals.  and one of the things we wanted to have as a focus on ESG, environmental, social governance, we wanted that to be the underpinning of what they did both in, in, in valuing it.

And having some type of focus on measuring it, And so for include ventures? Will you fund people fund funds outside of VC include and vice versa?

Oh, absolutely. Yeah. So, so include ventures is focusing on and not just fun ones, but fun twos and fund three.  And, and the reason I saw that too, was that there was a lot of funds and even founders that I saw that were may have been successful, residency Brown, but have a little bit more difficulty in raising a later stage rounds as well, for whatever reasons.

And I think the same thing is on the capital side for fund managers, but I think that. You know what, once we started doing this, we'll see it there'll be less about a moralistic issue and more about really achieving alpha.

give you a perfect example. We look at diversity as far as geographic diversity, I'm from Texas. And if anybody would, would, would come to me and say, I want to, I want to have a market in Texas. I wanna sell this product in Texas. I can tell you all day long about. How do people in Texas are going to react to this product?

I can tell you that a cyber chalk would not sell in Texas, but Arabian absolutely was sale. That's the benefit of having diversity in your team 

Minnie

I was chatting with, Austin Clements, and he has this amazing blog posts. I think it's the same point you're making, which is, Hey, don't invest in diversity because you feel like, I don't know, like it's a moralistic argument, but do it because it achieves alpha. Right?

Taj

Absolutely. I look at the same way I do. What's in clean tech, like lace Lacey's a weekend, menstrual ASAP, my apologies laces of Los Angeles, Cleantech incubator. So of course, FinTech two year, two years ago, it was dirty word. Nobody wanted to hear it. And now we're kind of in both, but the same way I look at Cleantech as the same way I look at diversity.

Don't invest in Cleantech just because it's a moralistic issue or it's future-proofing,  it's a public health issue. It's an economic issue. It's a social issue. And I think at the same way, and I totally agree with, with Austin  was that something you considered when you were raising this fund, like raising from the people who understood this, or,  how did you think about raising money?

Yeah, yeah. For the fund. Absolutely. And I'll be honest for me. I have, again, as this person in music, I have this dream that the what's what's going to separate law sentences from any other market is our history of entertainment. So that was the first community that we went to the race capital, because we felt like that that community would understand this more than the traditional, because that'd be honest, I've been in venture for, for a very long time.

And a lot of the institutional capital could have done this before. But they hadn't. ,

Minnie

does it bother you at all that it's trendy or is it like great it's trendy. Bring it on.

Taj

you know, that's a really great conversation that some of the founders I've talked to have said it that, They don't want to get funding or they don't want to get into it just because they're black. And my thing is, well, I've seen the opposite side of that. I've seen not getting money because I'm black.

So you know what, right now let's just move things forward. For me in, in a, in an ideal world, what I would love to see us, not just, you know, all black companies or all Latin X companies or all women companies.

I want to say a company that resembles Los Angeles. The reason I came to my senses and fell in love with love in Los Angeles is because I can go one part of down the street and get a Korean taco. And then the next road street, I can get a falafel. And then the next, next I can get it. I can get, you know, some Jewish SU

Minnie

do you have thoughts on what's worked or what hasn't worked in the past?

Taj

LA. It is attempting to do it right. We have a lot of support programs that are not just face value.

I think the younger generation get into venture after uni. I've got to change it completely. And I'm okay with that. I'm up for that actually.

Minnie

So tell me more about, I think you said it's not mentorship, but it's it's training.  Tell me more about what goes into that platform in that training.

Taj

Yeah, absolutely. So, so I'll take, I'll tackle the platform first and then the fellowship. we've been seeing the rise of platform services with funds that work with, with founders, where you come in as a founder, and we have it at Lacey as well. Um, and,  prior to Lacey, I was at the university of California.

Riverside, as the accelerator director  played a similar content there's called shared services. The whole idea is that you would, you would have legal, financial marketing, HRP are all these services that you would normally do as a founder. You would have it so found fund managers come into the VC, include, have access to that. We want to give them love to make it to where they can concentrate on making great investments.

As well as access to making connections with, with limited partners and again, it's the things that I think. When I was raising funds early on, but I wish I would have known outside of the book.

So, so having the support of MacArthur foundation, visa and UBS is really important to make your free for those, uh, for those fund managers.

Minnie

do you have, do you have any examples of some of those lessons learned that, that you are passing along?

Taj

you know, I th I think that when a person says, I want to break into venture, I want to start a fund. The first thing to think about is investing. But one of the things they don't think about is human resources and managing their team.

that was a tweet that came out and I thought it was really interesting. They said that venture funds are essentially financial marketing companies.

Right. and I think that from that standpoint, there's a, there's a bit of understanding. How do you, how do you really position the company? How do you build a culture of even within your own firm  One of, one of the things that I had to learn as well, and I think there's a fallacy that says that if you're diverse, you, you don't need diversity training.

That's poppycock, And Lou was having this, this conversation about biases of us, I guess, people who may not have degrees like we have.

Right. And so we were talking about this when we talked with Dysart in this company, it a really great company called very cool. Uh, there's based in basically Northern California in the packaging space. The CEO only has an eighth grade education  former gang member that went to prison, but just raised $60 million in a series.

A the question that we had to ask ourselves is that would we be biased against that person? Because of the lack of education and then go to not even just the top school, but just school period.

Minnie

Um, how about tips for fundraising?  I mean, that, that seems to be the thing that everyone wants to know is how can I raise a $250 million fund, , or how can I raise my $20 million fund

Taj

yeah, absolutely.  first of all, I tell, I tell founders. As a fund manager, it is in my opinion, a little bit harder than the other five, but some of the same things that I, think are true. I always look at fund raising as an art and a science.

The science piece of that is what we all kind of know, like building a great data room, making sure you have all the information. Even if you're an emerging manager, build a strong data room.

The arc for me, the art is, is about relationships  I love the story of fund managers like Jordan fudge. And if you, if anybody knows the story about how he raised his fund, he met the person who ended up being part of that fund or have been with the fund at the gym. Having questions exercising.

Sometimes it's about just having a conversation . , and, you know, I also would talk about this whole idea about what I call the bankers dilemma, and social similar to when you have a bank account, you, you make deposits and you take withdrawals, but if you take more withdrawals and deposits, you're being negative.

The Sanlam relationships. You want to build more deposits into people that withdrawals. And I think that's the problem I see with a lot of fundraisers is people are fundraising. They always want connections. They always want to contact so they can make the pitch, but what are they doing as deposits until it shows the relationships?

And I think that's what benefited us is that the team and I, the three of us, we made a lot of deposits in relationships through the years

Minnie

Yeah. And I think certain industries have more of that. I think some people, some people have been burned before, and so they're hesitant to give up their connections and give first, cause they're afraid they're going to get taken advantage of.

Taj

Yeah, absolutely Fear is a very controlling emotion.  you know, I always joke with my partner about this. I really believe in intuition and I very much believe in women's intuition.  I know it sounds blasphemous for us to not use science. But we're human beings that have emotions, that feelings for a reason.

I think there's a, there's a, there's a fallacy for us to not use emotions when we're making decisions. Because I think also too, we can feel the energy when there's some negative energy coming around.  and the times that it didn't work was the times that I did not pay attention to the energy that was coming about.

Minnie

uh, yeah, you can feel the negative energy. You can feel the positive energy too.

Taj

Absolutely. but he is your partner, but he and ketosis the three of you, right.

That's correct.

Minnie

and so, but he has started VC include and, um, yeah. Tell me about, tell me, give me a little bit more color on the two of them

Taj

Yeah. Yeah. Well, you know, it's funny. But here is this, she's the face of the firm.  but what I love about the, he is she's an ecosystem builder. She's definitely built the ecosystem, not just here, but also in Africa as well, because one of the things we also believe that bringing more diverse voices into venture is going to also express the opportunity outside of the United States.

Keith comes, comes with a more buttoned up institutional background and I love his experience.

The one thing that I love is. Some of the listeners may have heard of this to equity partners, Robert Smith, which was one of the wealthier, uh, private equity funds that are out there. African-American owned his firm. And him is the one who gave that, that company, the seed money to start when he was at Hamilton lane.

And so that, that for me, you know, if the whole idea is about what. Creation and wealth building and reducing the wealth gap. There's no other person I'm having my, my side. They didn't keep. And I think he's been, he's been like instrumental. And then he also managed some accounts with CalPERS, which is the California public retirement system.

Minnie

That's awesome. Um,  now here your dog, but it's okay. Like a little that's part of the fun.

Taj

And the sad part about it is I'm a cat person and there are $4 in my house. So I'm, I'm, hoping the dogs can disappear in the next two seconds.

Minnie

It's okay. It's okay. Um, uh, and what, just give me a little bit more about you.

Taj

You know what I, I would, I would say, well, I, I, I gave you, you know, I grew up in Texas, so, you know, anybody, anybody that's from Texas, you know, once the texting I was at texting, . But when, when I was at school actually want to be a rapper,  And,  that's why I made it in portrait literature because my parents said, I don't care what you're going to be. You're going to go to college.

And so I said, I'll show you I'll be in poetry. And, and when I graduated, of course, I didn't put out an album, but what I did learn was the aspect of storytelling, uh, understand that people are connected with what they bought through those stories. And I worked in banking was for the bank for a decade,  they worked in private equity, started investing there. And then that's when I got the bug, uh, would have been in a startups. The first few startups failed miserably learned a lot from that. And then I was blessed to be B a, an advisor, and part of companies that  got acquired.

. Um, and then it was at a, at a startup that was in the wine space. And that's when I started recognized that Cleantech was because a lot of the winemakers were having issues with, climate, with their, with their product.

And, uh, from there I was recruited by the university of California. I let their, their accelerator in Riverside

and I was excited that we made. In 2017, we made UC Riverside, the ecosystem to number four place in the nation for diverse entrepreneurs. And we did that by ensuring that everybody had access to information, it was all about access. It was about access to information and a little bit with my Coachella.

And then I came to Lacey in 2018.  I feel like you're just going to be super popular with this fund. So let me make sure I understand what sort of companies you're going to be investing into. Cause we didn't really cover that yet.

Yeah, absolutely. So, so two funds, two separate funds. The one, one, one 25 is going to be fund to funds and that's going to be for black and Brown fund led fund managers with an emphasis on ESG. What we like to say is we like to see funds that impact how you work, how you live and how you thrive.

The other 125 for the direct investments is going to be used twofold. That'll be used for following investments for Ray companies that we see our fund managers, making investments in  And then the other piece of that of course, is making direct investments outside of our, follow-ons just great companies that we may see that may be in the clean tech space.

Healthcare tech space, media and FinTech, because that's what, what are, what are our core team asks?

Minnie

That's great. Very cool. The one you mentioned is that, in your portfolio, or have you started doing direct investments yet?

Taj

We haven't started doing direct investments has depth. I'd be, I'd be very afraid because that's definitely one of the companies I'm extremely interested in. Uh, one of the things I failed to mention is in addition to that, um, I serve on the board of a few of, of homeboy industries, which is the organization here in Los Angeles that takes former gang members and current gang members and get them into the workforce.

So they just launched a fund that I serve on the board of. And so. You know, I have a lot of family members of my whole family. There were, there were former gang members from formerly in prison. So that's something that's very important to me. I had, um, Andrew glacier from defy ventures on whew. And he was just talking about, you know, the people coming out of prison, they got hustle, they got entrepreneurial spirit and

So, but if I'm an advisor and their, their defy gradually, , and I, and I was a volunteer with defy, but I haven't been very Frank and I'm going to be very transparent when, when I went to, when I participated in defy and it was a lot of great people there with me.  but it was only two people of color that was on the side of, of us as volunteers. And then on the other side of prisoners, everybody was persecuted with accepting one or two. And so it was this where we're feeling that I had about being in a space. Um, but, but I'll tell you if anybody's listening to this, you know, defies a great organization to volunteer.

definitely volunteer with them. Listened to her episode with Andrew. Andrew's a good guy. Uh, we, we, we partnered with defy, uh, over in 2020 when the carousel came out. Um, if people understand when the cares act came out with PBP entrepreneurs that were, there were former fellows, they were denied. Funding.

They were denied, cares X support. And so we partnered with a number of different people that read the rapper common and, and Sean Combs. And, and we, we started a relief fund to help provide capita to it.

So I, things like that. I love how our capital can be activists as well. And I think that's what, that's what it's going to, we're going to see a lot more of, we're going to see a lot more active as capital happening, whether we like it or not.

Minnie

Hm,  Um, and how about Lacey? Are you, you know, is lazy going to be recruiting for a new director of investments?

Taj

Yeah, I'm going to stay at Lacey. Cause my, my job at Lacey is really threefold.  we manage the impact fund and our dead fund.  we educate our founders on fundraising. I know we've met, we bring new investors too, the ecosystem.

So I'll be working on a third piece of that. Now, now that I've been working on my own fund. So I think he just works hand in hand of already investing in a number of funds in the fund of funds. And they're focusing on ESG. And, and what I believe, I believe that Cleantech is going to be normalized. We're going to have a situation where it's not going to be in this separate space,  so rather than like, this is a clean tech investment, it's like, this is a packaging investment and it happens to be, have clean tech as part of it.

Okay, absolutely

Minnie

Hmm. so, so tell me more. I feel like you have a lot of depth that we can all learn from, and like, I'd love to hear some about your kidney disease. Like whatever you feel like comfortable sharing. Like when did you find out how did that happen?

What was the reaction?

Taj

thank you for that. I, and I am an advocate for, you know, the NEC the national kidney foundation.  and I'll be Frank before I was sick. I never really thought about it.  and I think a lot of minority families hear this, where a person gets sick and you don't really know why you just thought they were sick and he never really discussed it. He never really talked about it. And around in 2018, I w I was, uh, well, actually what happened was, uh, 20, 28.

I was getting a little bit tired and I've got, it was just me being, being a founder and burning the midnight oil, went to my doctor and he's like, Oh, you know, nothing wrong with you. You're, African-American, that's just par for the course of your founder, blah, blah, blah. So for 10 years I had this, this, this disease, it didn't know it.

And I was at a, at a, at an event. And I met with this doctor who was a minority doctor, and I was joking about. Because I was saying, I can't get key man insurance, because you know, this, this, whatever is making me tired. And it look on her face, was the look of horror. And she said, you need to go to a biopsy tomorrow.

And I did just that. And by the time I did, I was stage five, which mean if I had not met her, I probably wouldn't be talking to today. When you're stage five, which means you have immediately maybe a kidney failure failure.

So since 2018, I've been on dialysis and I have to do it three days a week, four hours a day, four to five hours a day. And you know what that did that made me think about a lot of different things differently. It made me start thinking that alpha means nothing. If I'm out here  what differences to make we're making this returns when the world is like it is. So that, that was a common car for me to really kind of focus on sustainability and to focus on just. Just really, really trying to support founders. They're trying to make a difference.

Minnie

Wow. And so you find out and, you know, you're still able to keep your job, 

Taj

yeah. Yeah. I, and I have to get, and this is the reason why I'm staying with Lacey, even with lunch with funds,  Cause I found out that literally they, I got hired at Lacey is when I found out my, my, my diagnosis. And I have to, I have to say this, the founder of Lacy's name is Neil Anderson.

Uh, he was like, I got you. And, and I'll be honest. I don't care how much, how much they paid me. I don't care what my job was, him thinking of me as a human mint, way more to me than anything else. And that's what got my loyalty. And I think that's a lesson for founders to realize too, is that treat your employees like humans and treat them with dignity and respect.

Okay. And I think they will do the world for you

Minnie

Yeah. Um, do you think it affects how you spend your time? Do you prioritize your life differently now?

Taj

I do. And I think I'm much more efficient because if anybody, if your listeners ever knowing about what Dallas is or have seen someone on dialysis, you literally stuck. I call it the matrix. So you're literally stuck in the matrix. Your hands are bound because you have needles in one arm and something that the other arm is bounced.

So you're just there for those four hours in a chair. But, but.

Even now I'm talking to you, I'm talking to you through my glasses that are speakers and microphones.  And again, I'm going to go here too. We talk about the diversity from a standpoint of gender, race, and refunding, kind of talking about age.

But we never mentioned people with disabilities. When we talk about building tech, this, this, this, this, maybe, maybe, literally start thinking about that. And then in converse, it made other people around me think about it as well. So I think about it as a blessing that has happened, that enabled me to have more time and to spend the time wisely.

So yeah, in the morning when I go in at three o'clock in the morning to get my treatments, I take all my European calls or my all my, all my. East coast calls and then everybody on the West coast, I was wondering why I know about everything before they do.

Minnie

Wow. Where do you think that strength in you comes from? Like to just be like, great. I just got a new job. I'm here to keep going. I'm going to double down.

Taj

Yeah. You know, there, there's a, there's a phrase that comes from, uh, you know, the black community that says find a way or make one. And, and I, and I think that was the way I went into it. When, when, when I had it was just that, okay, well, you know, w we're here, you're going to mourn a little bit,

But even when I was a founder and we had difficult difficulty raising money, Our doors were closed. We aspirated as if it was okay. Well, you know, we can't get money from venture and let's go to the basketball community or let's go to an entertainment community. and I think that that resilience, a lot of people who are immigrants, a lot of people who are women, a lot of people or, or people of color.

You, you, you tend to think that way because you have no other option or the choice. You know, I was talking to, uh, you know, different founder. We were talking about just how, Y Y I love funds that focus on immigrants, because when I, when I'm here in LA, I see people who are immigrants, who are, who are here selling products on the street.

And that, that tenacity, that resilience, um, is something that their children. Inherited as they're building their companies as well.

Minnie

Oh, totally. I see the immigrants are sort of the original entrepreneurs here, right?

Taj

Absolutely and we, we keep talking about privilege. And I think a lot of times we only think about privilege and race. Well, we have to read, they are, I grew up privileged here as Americans.

We're privileged here as citizens. So we have to think about that, that piece of it when we're looking at our founders from different places.

And then also too, one of the things I think about is how do I make way for the next generation after me?

Minnie

Have you had people like you're talking about sort of making way for the next generation, have you had, uh, people that have changed your trajectory?

Taj

Oh, absolutely. You know, in addition, in addition to two people who are, who I've never met,  another person who is so dear to me, but she is still my, my hero you had on the show is Tracy gray. Tracy is what Tracy has. Tabi was to be a warrior and an advocate for those or often unheard. You know, I've always, I've always, always been that way, but I think there was a bit of a fear in me being as vocal.

But if you've ever met Tracy and anybody that's ever listened to her talk, I even been on your show. Traces is an advocate for those voices who are, who are rarely heard.  yeah, she inspires me too. I'm just trying to find a way, like, how do I bottle all of, I feel like you've learned so much, but without Having to get stage five kidney disease to have all of this

Minnie

wisdom.

Taj

but I think you had to, I think if I've made and I, and I do have to do this because I think faith is a very much part of me and a hope that the other people who have faith, they don't hide it in our industry. And I think that's, that's the thing that I hate that people hide their, whatever their faith is.

But, but I, I believe that that there's a phrase that says your steps are ordered. And what that means for me is that these things were supposed to happen the way they happen and everything kind of come together and I might not have seen it. And even when it's happening, I might not realize that all the, like, even, even me being a portrait major, I never would have thought out being financed.

When I first started, I literally was going to be in music.  And, and I think. There are a lot of people in venture who have, you know, like me business degrees, MBAs, what have you, but you have to look at the other side and really kind of use the other side of your being, to make you a whole person. And it's about being authentic.

Now. I think authenticity is the key word for 2021.

Minnie

Yeah, love it. Taj, thank you so much. I'm so excited for include ventures and that you really have the capital to move the needle and pave the way for the future. And thanks for coming on the pod.

Taj

Thank you so much. Thank you Minnie, for having us. And I say us because I'm including my dog and my son are making all this noise in the very beginning. We're excited would include, can do. We're excited to include those voices that have have not been included historically in the industry.

And even more importantly, I'm excited to ensure that not just California, not just today, not even just to LA that all these other places get an opportunity to create innovation because that's, what's going to truly make America.