ImpactAlpha, July 16 – As a first-time manager of an impact-oriented venture fund – and a Black man – Qadree defied the odds when he completed Zeal’s $62 million raise this week. First-time and emerging fund managers attracted just over 11% of venture capital last year, despite growing evidence that, on average, they outperform managers with longer track records. “Raising a first-time fund is incredibly hard,” he tells ImpactAlpha. “Raising a first-time fund as a diverse fund manager in Washington, D.C. is even harder.”
Qadree, 34 years old, defied convention as well by opting not to go to business school after being accepted at Yale, the University of Michigan and elsewhere. Instead, he opened a coffee shop in New York City. The business shared space with an incubator where impact and other investors, including Josh Cohen at City Light Capital and Matt Greenfield from Rethink Education, introduced him to private markets and venture capital.
Qadree began to make investments for his personal portfolio, and built a track record heading education investments at Village Capital. After moving to AT&T as associate director of social investments, Qadree realized it was time to launch an impact fund. “Two of my biggest mentors sat me down over dinner and said, ‘You talk a lot about democratizing entrepreneurship and leveling the playing field. Why don’t you start your own fund?’”
The market he spotted: early-stage ventures in workforce development, education and financial services with potential to narrow wealth and skills gaps. “That’s a huge opportunity,” he says. Qadree launched Zeal in February 2020. By November, Qadree had raised more than $22 million from PayPal and from his alma mater, Hampton University, a historically black research university in Virginia.
The commitment that pushed the fund past its goals came from Truist Ventures, part of Truist Financial Corp. in Charlotte, N.C. “We would not be where we’re at if it wasn’t for that unfortunate moment in May” of last year, Qadree told ImpactAlpha, referring to the murder of George Floyd and the social movement that followed. “We probably would be a $25 million fund, and that’s being generous” (see, “Seven ways finance has changed in the year since George Floyd’s murder”).
Zeal Fund I has made five investments, including in Black-led fintech Esusu, which aims to help low-to-middle income renters save money and build credit; Latinx-led Kanarys, which is helping employers address diversity and inclusion issues; and YearOne, a Black-led startup helping engineers transition from coding school to the workplace. With the final close behind him, he says Zeal is ready to have an even bigger impact. “We pledged to turbocharge economic mobility and now the engines are running.”