Investing In Great Companies The Dream Maker Way
Photo (left to right): Kyla Bolden, Entrepreneur in Residence (EIR), Dream Maker Ventures & CEO of WizKid Coding, Isaac Olowolafe, General Partner, Dream Maker Ventures, Newton Asare, Managing Director, Dream Maker Ventures.
February marks Black History Month — 28 (or 29) days every year marking the achievements and contributions of Black people.
As we celebrate the contributions that people of African descent have made, it’s worth highlighting local organizations that are making an impact.
The Canadian private capital ecosystem is becoming well versed in the business case for diversity and inclusion. Venture capitalists have been more deliberate about fostering diversity and inclusion in the last couple of years; the Canadian VC ecosystem has made great strides with initiatives like the Venture Capital Catalyst Initiative (VCCI) helping to keep diversity top-of-mind.
Dream Maker Ventures (DMV) is contributing to the positive changes in the Canadian ecosystem. Launched in 2015, DMV is the first Black-led venture funds in Canada and is the investment arm of Dream Maker Corporation, a Toronto-based vertically integrated asset management firm.
Founded in 2003 by Mr. Isaac Olowolafe, Jr., Dream Maker Corporation operates in real estate, development, property management, and insurance. It has about half-a-billion dollars in assets under management. DMV started by investing off the books of the parent corporation and has recently launched its Diversity Fund I. Mr. Owlowolafe is a growing figure in the tech industry sitting on the advisory boards of the DMZ, #MovetheDial, and Tech For SickKids.
“Our mission with the Diversity Fund is to #ChangetheNarrative and showcase that successful a top-tier VC fund can be built around a thesis of supporting diverse, underrepresented founders within of the tech community,” said Newton Asare, Managing Director.
It’s taken a long time for investors to tap into diverse opportunities. Asare shares his opinion on why the VC community has started to invest in founders of diverse backgrounds.
“Women and minority owned businesses collectively represent a massive market in North America. Not only do they create innovative and unique products; data has shown that gender and racially diverse teams often outperform “homogenous” teams in terms of profitability and other business metrics. However, this market is still relatively overlooked and has been consistently underfunded. Our team sees this gap as a significant advantage, that will enable us to access high performing companies. DMV also reflects these diverse communities, allowing us to connect with the founders without bias, while identifying areas of greatest potential,” continued Asare.
Morgan Stanley has dubbed this market as the “trillion-dollar blind spot,” releasing statistics and data showing that this is a growing and lucrative market for the foreseeable future.
DMV plans to position the Diversity Fund I as an early stage venture fund that invests primarily in under-represented or diverse founders and in products that serve this market segment across Canada and the United States.
“This will include racial minorities, women, persons with disabilities, as well as the indigenous community,” explains Asare. “We want to make an impact, while at the same time, as fund managers, our focus is on generating exceptional returns for our LPs by investing in great companies, we will also invest outside of the diverse lens as we have done in the past.”
DMV has assembled a stellar advisory team that features notables like Shernee Chandaria, Jodi Kovitz, Ralph Lean, Jay Rosenzweig, Bruce Bowser, Brian Cooper and the former Premier of Ontario, Dalton McGuinty.
“Along with the diversity lens, our investment thesis will revolve around “ABCE’s” (AI, Blockchain, Consumer, and Enterprise), in addition to sectorial focus on fintech, proptech, esports and healthtech,” explains Asare. “We also invest primarily in early stage companies, anywhere from pre-seed to series A.”
While we await further announcements on the Diversity Fund I, we can expect more details about DMV’s partnership with Ryerson University’s DMZ later this month. The ground-breaking Black Innovation Fellowship, funded and created by DMV. Asare explains that the partnership will complement the Fund’s thesis and support deal flow, by focusing on helping entrepreneurs from underrepresented communities, and providing access to resources and support from the DMV.
A Dynamic and Sturdy Portfolio
One of the significant drivers of DMV’s development of the Diversity Fund I includes its existing private investments: 17 companies collectively approaching a billion-dollar market cap.
“We’ve gotten into some great companies. We invested in Brightspark Ventures funds that invest in Hubbaand inHopper. Hopper is moving across the billion-dollar valuation to become the next Canadian unicorn. Second Closet is another standout company that’s in our portfolio — and, Casalova, Smooth Commerce, and Gimme360,” said Asare.
Josiah Crombie, Founder and CEO, Gimme360, says that support from DMV has been an advantage.
“DMV’s diverse partners have been closely involved and crucially helpful. As a minority led business, it’s been such a phenomenal advantage to learn from an inclusive team about acquiring early customers, figuring out who to hire, closing deals, and raising money. Additionally, through partnering with DMV we have strived to focus on diversity of our board.”
DMV has invested alongside reputable firms as they’ve built up their impressive portfolio.
“We invested with notable investors,” observed Asare. “That includes Aviva Ventures and Brightspark Ventures.
When you invest in a company, you have skin in the game. Now you have an economic interest to open doors and help that company thrive. Therefore, along with capital, our Fund focuses on helping companies get the exposure to industry that they need, to grow and build great businesses.”
To learn more about the Diversity Fund and the Black Innovation Fellowship feel free to contact the DMV team.