Ladderworks is a publishing platform of diverse picture books and online curriculum with the mission to empower over a million kids to become social entrepreneurs. Our current series features interviews by our interplanetary journalist Spiffy with inspiring Social Entrepreneurs, Entrepreneurship Ecosystem Builders, and Changemakers who are advancing the UN SDGs.
Hi folks! I’m Spiffy, your interplanetary journalist reporting from Planet Earth, back with a new guest. Tracey Amara Thompson, the vice president of SoGal Ventures, is committed to making a difference in the world. Let’s see how she’s doing it!
Spiffy: Lovely to have you with us, Tracey. What challenge are you addressing through your organization?
Tracey: Thanks for having me, Spiffy! Did you know that founders from some of the largest and highest growth populations have historically been underfunded. As commonly cited, less than 2% of VC funding goes to minority and female founders. However, these communities are driving the US economy forward, and these founders are outperforming the average. As a result, many problems faced by underrepresented communities have gone unsolved, high-potential founders have been underfunded, and significant spending power has been untapped. SoGal Ventures, founded by Pocket Sun and Elizabeth Galbut, is doubling down on the thesis that underrepresented founders, underserved problems, and undercapitalized geographies are the biggest investment opportunity of our time.
Spiffy: What motivated you to do it?
Tracey: During the racial reckoning of 2020, I saw many companies pledge small percentages to minority founders. I disagreed with the thesis that the solution was to give 1% of a fund to over 50% of the population. In fact, these solutions to the funding gap mirrored the funding gap. What was required was a systemic solution beyond meeting diversity quotas. In my career in entertainment, I worked on movies and deals that generated outsized returns for an industry that underpriced the value of minorities and women, after pitching a division to prove the industry wrong. So in my transition into investing, I knew that, if the traditional Venture Capital ecosystem wasn’t going to invest in what the world looked like, it was their loss. I could.
Spiffy: That’s very inspiring, Tracey! Can you elaborate on how you, through your work at SoGal Ventures, are working towards a more equitable world?
Tracey: Through SoGal Ventures, we invest in diverse founding teams revolutionizing the future of living, working, and staying healthy for the rest of us. Through SoGal Foundation, SoGal Ventures' sister non-profit, we have created one of the largest global communities to democratize access to entrepreneurship and investing. We offer access to Angel Investing, Breaking into VC, and more. Our Foundation also leads our Black Founder Startup Grant, which provides grants and training to Black women founders so that they can have a more equitable opportunity at scaling the next billion-dollar idea. Through our diverse Limited Partnership (LP) base, we provide venture-sized returns to communities that have traditionally been left out of exclusive LP communities.
Spiffy: Tell me about a recent organizational milestone or initiative, and the impact it has on your community.
Tracey: We have been running our Black Founder Startup Grant for two years. We recently partnered with Walmart Foundation for our most recent retail cohort. Black women are the country’s leading entrepreneurs. These founders understand the fabric of America and are the best equipped to solve some of the largest unmet problems. However, Black women entrepreneurs receive less than 0.5% of VC funding. The Black Founder Grant was created by SoGal Foundation to address this disparity. By the end of 2023, we will have provided 100 grants to Black women founders.
Spiffy: Wow! Can you tell me about an inspiring startup that your organization has helped to advance its impact?
Tracey: Everly Health, one of our first unicorns, enabled over 45 million covid tests during the pandemic. SoGal set out with the mission to invest in companies that benefit people, society, and the planet, and Everly Health has embodied this mission, becoming a digital first responder during the pandemic. Our co-founder and managing partner, Elizabeth Galbut had a thesis on the consumerization of digital health, and the power of digital health to transform society, and pitched SoGal to Julia Cheek, the founder of Everly Health. It became one of SoGal’s first investments, and has since been valued at over $2.9 billion.
Spiffy: Is there anything else you would love to tell our audience?
Tracey: Echoing a statistic that our co-founder, Pocket Sun referenced in her interview: our portfolio is made of 100% women and diverse founders, and our fund performs better than 90% of US venture capital funds. The narrative that diverse founders cannot return capital at the same rate as their white and male counterparts is statistically incorrect. If you treat diverse founders as the charity case, they will likely not generate venture returns. Invest in diverse founders because they are excellent. Build them up to create billion-dollar ideas instead of giving them money to check a box. Push them and support them in the same way that you would white male founders. When you invest equitably, you will create returns more equitably.
Spiffy: What a note to end on! Thanks for speaking with me today, Tracey—it’s been an honor!
Tracey Amara Thompson has built her career on firsts. Prior to becoming the first full-time hire at SoGal Ventures, Tracey was the first hire for Will Packer Media, where she worked on strategy and acquisitions. Prior to that, she pitched and launched the first digital marketing division at Will Packer Productions, and managed projects such as Girls Trip, which shattered Hollywood records. Tracey graduated Summa Cum Laude from Boston University and is an alumnus of Harvard Business School. (First published on the Ladderworks website on February 21, 2023.)
The views and opinions expressed herein are those of the interviewee and do not necessarily reflect those of Ladderworks LLC.© 2023 Ladderworks LLC. Edited by Anushree Nande. Spiffy’s illustration by Shreyas Navare. For the Ladderworks digital curriculum to help K-3 kids advance the UN SDGs, visit Spiffy's Launchpad: Creative Entrepreneurship Workshops for K-3 Kids and their caregivers here.