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Investing in news and media by and for people of color

ImpactAlpha, July 16 – Blavity’s $1.5 million raise from the W.K. Kellogg Foundation (and another $9.5 million from earlier investors) helped demonstrate the investability of a media company built by and for Black people. Blavity is among a new crop of Black press outlets, including The TriiBE, The Root and The Plug, “changing the lenses of victimization and dysfunction into lenses of empowerment and agency,” writes Neiman Reports’ Deborah Douglas.

But media entrepreneurs of color more broadly still struggle to raise capital to grow, facing similar biases, exclusionary networks and lack of support as other diverse entrepreneurs. They also face revenue disruptions and other uncertainties that characterize media generally.

In “Investing in equitable news and media projects,” Transform Finance and Ford Foundation unpack the challenges facing media organizations by or for historically overlooked groups, particularly people of color, and lay out opportunities to mobilize capital.

  • Diversifying investors and owners. Women-led angel investing groups such as Gina’s Collective and Shondaland have demonstrated interest in media. Film and publications are among the target investment areas of Baron Davis Enterprises, which is also a Blavity investor. Foundations including Kellogg, along with Open Philanthropy and The California Endowment, are forward thinking in funding for-profit entities. Catalytic foundation program-related investments could take more risk to seed equitable media. The Membership Puzzle Project is helping publications convert to cooperatives. (Bleu Media’s Devon Christopher Johnson, Her Agenda’s Rhonesha Byng and Anastasia Williams are curating a list of Black-owned media companies).
  • Equitable structures. Revenue-based financing that returns capital to investors as a percentage of revenues removes the need for sales, acquisitions, or public offerings. Grant-like instruments structured as equity can boost governance rights of the grantmaker and allow grant makers to participate in the upside, the report says. Financing for specific projects, such as films or thematic series, “can play an important role in providing small bets around potential ancillary revenue streams that, if fruitful, can strengthen the overall sustainability of a media enterprise.” Pooled structures, like that of New Media Ventures, can serve as a clearinghouse of investable opportunities in equitable media.

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