ImpactAlpha, February 8 — San Francisco-based accelerator Nex Cubed is looking to raise $40 million for an HBCU Founders Fund, which will back 20 early-stage startups a year with at least one founder from an historically Black college or university. The fund will focus on fintech, digital health, proptech and edtech startups whose founders are HBCU students, alumni or faculty members.
The fund will use $5 million from Costco to launch a four-month accelerator program for 10 founders this spring, and a second cohort in the fall. The HBCU Founders Fund will invest $120,000 in each company and an average $250,000 in follow-on funding.
“We want to make sure when they leave our program that they’re in that place to go out and raise that next significant round of capital, a million-plus round,” Nex Cubed CEO Marlon Evans told The Plug. The firm is accepting applications for the first cohort.
Deals sourcing
The first cohort will prioritize founders who have gone through the HBCU Founders Initiative, a nonprofit spinoff of Nex Cubed that partners with AT&T, Mastercard and Verizon to support entrepreneurs at more than 70 HBCUs. The initiative created a “Look Book” of HBCU-founded startups for investors. HBCUs produce about one-quarter of African-American graduates in STEM fields.
Fundraising
Nex Cubed is looking to raise capital from corporations and foundations – and the endowments of HBCUs. “That would be the ultimate goal because then all the money stays really in the community,” said Evans. “So when the fund wins, it goes back to the institutions which then goes back to support the schools and students.”
The 10 largest endowments of HBCUs totaled $2 billion in 2020, compared to nearly $200 billion for the top 10 U.S. educational institutions overall.
