HBS Black New Venture Competition – The Harbus – Harbus Online


Ibe Imo shares the stories of Khalid David and Kobina Ansah at the HBS Black New Venture Competition

Ibe Imo, Contributor

For Khalid David, Venture Creation and Funding is Activism and Black Empowerment. 

“At Harvard Business School’s Black New Venture Competition, I felt welcomed into a larger family of Black business leaders,” David said.

NEW YORK CITY, N.Y. — Khalid David is the CEO and Founder of TracFlo. TracFlo is a predictive financial management platform that offers contractors a streamlined and centralized process for tracking time, tickets, and change orders. For David, venture creation is activism and Black Empowerment. In 2020, David won a $50,000 grand prize at Harvard Business School’s inaugural Black New Venture Competition.

David was born in The Bronx, New York City. He is a first-generation American. His parents migrated from Saint Kitts and Nevis—an island between the Atlantic Ocean and the Caribbean Sea. Growing up Afro-Caribbean in America shaped his identity as a Black Diasporan. When David’s parents and relatives migrated to the US, they leaned into each other to navigate their new lives in New York City. They were builders and carpenters, and they took David to job sites. “Early, I learned to fix windows and install plumbing,” he said. Sunday evenings meant large dinners with family. “I grew up like any other kid in The Bronx, within the context of the American Dream. My parents sacrificed much to create an opportunity for my sister and me. We had an obligation to take advantage of these opportunities.” 

TrackFlo Win @HBS BNVC

David was in third grade when his dad joined the carpenter’s union. With a formalized trade and new footing, he moved David and his family to Mount Vernon in New York. Mount Vernon is sometimes referred to as a Black suburb. It is also Denzel Washington and Heavy D’s hometown. David played football and went on field trips with other kids. By the eighth grade, he was leading fellow middle schoolers to win math competitions. “Numbers have always been one of my strengths. I pressed in and did not shy away,” he said.

With a strong background in math and science, David graduated high school and chose Moorhouse for college. “What Morehouse represents for the Black community resonated with me. It became a huge part of my identity.” At Morehouse, he would study physics, and later civil engineering through a dual degree program at Georgia Institute of Technology or at Columbia University. David desired an Ivy-League education, and he chose Columbia. In a few years, he met his goal of graduating with dual degrees in applied physics and civil engineering. 

David graduated a few years after the 2008 housing market crash. The job market was weak. “I returned to my family home where the standard of excellence was earning a degree and finding a good job. There was a part of me that wanted to make them proud,” he said. After spending nine futile months of job searching, he surrendered. He partnered with his uncle and made a consequential debut in entrepreneurship. 

David started Bunkers Hill Construction. His new company provided tech-enabled estimation services for construction projects, “I got the first check for $20,000, and it blew my mind.” he said. David realized that he could control his time and destiny through entrepreneurship. He realized that Black communities like his family could shift their paradigms from service to ownership. He realized technology’s quantum power to create wealth. Through entrepreneurship, he could create jobs and uplift his community.

It was now 2013, and the job market was getting stronger. Entrepreneurship as a means of survival during an economic downturn was understandable, even necessary. Things were getting back to normal now. “My family could not wrap their mind around the idea of a brilliant Black boy that thought he had the right to make the sacrifices to create a venture,” he said. “I was met with hostility. There was a lack of respect or appreciation for what I was doing.”

Each milestone predicated the next. David wanted to do business with Turner Construction Co., but they wanted an intrapreneur. Turner was looking for a leader and engineer with a strong command of data and numbers. David was the perfect fit. He accepted a role as a safety engineer at Turner Construction Co. in New York City. “I got the job because they saw me looking to do business with them,” he said.

At Turner, David gave his best. He built a software solution to help analyze safety performance for construction projects. He was a Morehouse man of distinction. He was now working the “real job” his parents would be proud of. David’s solution was gaining traction, and its impact was resonating across the company. But Turner was a construction services company. It was not a tech startup. David’s “tech stuff” was important but not Tuner’s core business. It was eventually shut down.

David had to decide. He could focus on the core business of construction or pursue his passion for building tech-enabled solutions for construction project management. With a letter of recommendation from his mentor, Turner’s Senior Vice President of Engineering, David applied to the MBA program at Massachusetts Institute of Technology (MIT).

It was now 2017, and MIT was a unique enough space for David to pursue his passion for construction, technology, and entrepreneurship. He had a solid plan. He would build a venture to track, analyze, and predict construction projects’ financial performance. It all made sense since venture capitalists lean towards founders from Ivy League universities; David, like any other Ivy-educated engineer-founder, could build a new venture, raise capital, and scale quickly.

David completed his first year at MIT and launched TracFlo—an online financial tool designed to help contractors manage project risk. TracFlo’s first set of checks came from MIT Sandbox—a seed funding and mentoring program for student entrepreneurs and MIT delta ν—an educational venture accelerator. By the end of the second year of his MBA program, he had built a team and refined TracFlo’s product offering. They were ready and off to raise capital.

The disparity in capital access for Black founders was inevitable for David. “The paradox for Black founders is to have a viable venture and convince investors to overcome the fear of investing in them as people of color,” he said. It was a big wake-up call when David realized that his path to raise capital would differ from any other Ivy-educated engineer-founders who had viable ventures and proven experience.

Early in 2020, the African American Student Union (AASU) at Harvard Business School (HBS) hosted the first-ever Black New Venture Competition (BNVC). Five Black founders would have the opportunity to pitch their early-stage technology ventures for a chance to win $175,000 in prize money. David applied and received an invitation to pitch TracFlo. “I felt welcomed into a larger family of Black business leaders,” he said.

David won a grand prize of $50,000 in undiluted capital. Winning the BNVC at HBS was an important milestone for TracFlo. “We got our first term sheets after the competition,” he said. It was a validation on a national platform that TracFlo is an investable company, and people are willing to commit large sums of money to its success.

A few weeks after the BNVC competition, the coronavirus pandemic came unexpectedly. Revenue streams and capital were dwindling for TracFlo’s customers. David and his team responded. They added TracFlo capital—a new product that offers marketplace lending by connecting construction companies to lenders. Today, TracFlo Capital has partnered with 75 lenders who have granted $165 million in loan proceeds. Currently, Traclo is working on two large projects in New York City and has commitments to serve world-class organizations and construction companies. They continue building out Traclo. 

There is an opportunity for venture capitalists to invest in Black founders. David sees venture creation and funding from a dual perspective. It is activism and empowerment for the Black community, and there is a dire need for Black investors who can see younger versions of themselves to sign the checks.

Kobina Ansah is Building Solutions for Under-banked Americans. 

READ  Sovereign Capital buys into business consulting, tech services business Zenitech - AltAssets Private Equity News

“Harvard Business School’s Black New Venture Competition was a powerful platform that opened doors of opportunities to speak to investors,” Ansah said.

NEW YORK CITY, N.Y. —Kobina Ansah is the founder of COVERR—a financial service

platform that offers customized working capital for gig workers (like ride-hailing drivers and food delivery personals) to stabilize earnings volatility.

Ansah’s life experiences from the US, Canada, and Ghana compelled him to create tailored solutions for under-banked gig workers. In 2020, Ansah’s venture won a $50,000 grand prize at Harvard Business School’s inaugural Black New Venture Competition. 

Ansah was born in Cambridge, Ontario to migrant parents from Ghana. He was five years old when his family moved to Ithaca, New York. By the third grade, Ansah was still adapting to life in Canada. The kids at his school played basketball and football while he played hockey. He was getting into fights and his grades were plummeting. 

Desperate for an intervention, Ansah’s parents sent him to boarding school in Accra, Ghana. Students in boarding school came from various socio-economic backgrounds and Ansah was baffled. “One boy hand-washed his school uniform each night. On rainy nights, he came to school in soggy clothes,” Ansah said. 

The boarding school became a transformative experience. “Some kids worked so hard for an opportunity to attend college in the US,” Ansah said. He began to realize the privileges he took for granted. He became a preppy A-student and returned to New York. Ansah became a high school junior and his mind was set on studying mechanical engineering at Cornell University. “Though I was good, I was not a top student in the AP math class,” he said.

His friend’s father advised him to reconsider his desire to become an engineer. Ansah was defensive at first. Then he realized that his strengths were more inclined to building relationships and helping people. “I thank him for it,” Ansah said. “Studying engineering would have put me on a path I’d have regretted.· Ansah applied and gained admission to study hospitality administration at Cornell.

Ansah was a freshman when he got first hand exposure to consumer credit. Like other first-generation migrants, Ansah’s parents did not understand credit. They avoided it. “My parents would say credit cards are bad. They never said why exactly.” After receiving several marketing calls from lenders, Ansah conceded. He opened a $2,500 line of credit. Without a stable income or understanding of repayment terms, he began swiping, and he learned the hard way.

Ansah graduated from Cornell and began his career at Ernst & Young (EY) in New York City.

At EY, he was a real estate analyst; subsequently, he left EY and spent the next three years at Wells Fargo’s hospitality finance group. “It was an opportunity to understand strategy execution. It was also an introduction to capital provisioning at scale,” he said. 

In his role as a relationship manager at Wells Fargo, he served multi-billion-dollar clients. He realized that the path to wealth came with personal risks beyond stable or prestigious employment. “At that point, my interest in entrepreneurship began to pique.”

He now understood how traditional lending frameworks inadvertently exclude groups of people. “I understood how it feels when people conform to a system that does not account for their unique characteristics,” Ansah said. Recounting moments, he began cradling a new venture idea—to build customized solutions for under-banked communities.

Ansah knew he could not go off tinkering his mom’s garage. “As a Black founder building a financial service platform, it would not have translated very well,” he said. Ansah was seeking an entrepreneurial playbook and validation from the world’s oldest collegiate school of business. He applied to the MBA program at Wharton School of the University of Pennsylvania. The MBA program at Wharton gave him a safe space to experiment and incubate his entrepreneurial ideas.

Ansah’s first venture was not the success he imagined. As an MBA candidate at Wharton, he launched ModernLend—an online platform that offered credit cards to international students with “thin credit files.” After a successful pilot testing at 12 universities, he had proven the concept. He was now prepared to pitch to his bank partner. The plan was to raise $1 million and launch ModernLend’s products nationally. 

Ansah was halfway into his pitch when the bank CEO interrupted and made a sudden commitment of $10 million. This commitment was above and beyond Ansah’s expectations. Six months later, he discovered that the CEO misrepresented the bank’s investment capacity. The CEO’s misrepresentation ultimately led to ModernLend’s demise. Ansah was left with lessons that only come with failure and experience. He took a break and spent the next 12 months testing other viable ideas and reflecting.

Ansah Kobina wins HBS Competition

The ideation phase made Ansah realize that a growing number of gig workers and had difficulty accessing business finance. Ansah’s strength of building and maintaining relationships was a springboard to bounce back. With the support of a prior investor from ModernLend, Ansah raised initial capital. He launched COVERR—an online financial service to help gig workers access business finance. COVERR would focus on ride-hailing drivers in New York and New Jersey. “I have gotten a lot more out of my network by seeking ways to

add value,” he said. “All of my greatest opportunities have come from my network and personal

relationships.”

 

READ  Analysis | The Jeff Bezos Hack Shows Vulnerability Beyond Tech - Washington Post

Raising more capital for COVERR was an uphill battle. Though Ansah had built an MVP, had proven industry experience and an MBA from Wharton, the playing field to raise capital was uneven. After reading a Tech Crunch article of venture founders who had raised millions of dollars without as much as a product, Ansah was frustrated. He spoke to a friend who gave him a piece of advice that keeps him grounded. “She said, do not use that as a crutch to complain about what you are not getting. Use that to gain clarity, acknowledge it, and plan around it.” Ansah refocused his energy on understanding how to de-risk his venture; by diversifying his team and highlighting his professional background. “It is a painful pill to swallow, but it is clarifying.”

A year later, in 2020, the African American Student Union at Harvard Business School hosted the first-ever Black New Venture Competition (BNVC). Five Black founders would have the opportunity to pitch their early-stage technology ventures for a chance to win $175,000 in prize money. Ansah pitched and won the Google for Startups Innovators Award of $50,000 undiluted capital. “The BNVC was a powerful platform that opened doors of opportunities to speak to investors,” he said.

Shortly after the BNVC, the coronavirus pandemic threw a curveball at Ansah and COVERR. Infection rates were skyrocketing in New York City. People became apprehensive of commuting and ride-sharing. Ride-hailing was declining, and worker’s earnings were reducing or nearly decimated. Ansah and his team designed COVERR Boost—a service to provide interest-free cash advances for independent contractors and gig workers. “The goal is to help the gig workforce to get through the pandemic in a financially sustainable way for COVERR,” he said.

The silver lining is watching the strength and resilience of gig-workers. “Through the challenges, they have diversified their streams of income,” he said. COVERR is currently at the early funding stage and serves hundreds of customers in New York and New Jersey. Ansah and his team plan to raise more capital and deploy COVERR’s deploy products nationally; “It is going to take a village to make COVERR the success it truly can be.” 

Ibe Imo is a feature writer, HBS Online participant, and Harvard graduate student focused on journalism and digital storytelling. His storytelling chronicles inspiration from everyday human experiences. Ibe enjoys outdoor activities, including kayaking and trail cycling along the Charles River. He lives in Boston, Massachusetts.



READ SOURCE

READ  Envision partners with tech startup KAAS to drive business growth - Wichita Business Journal

LEAVE A REPLY

Please enter your comment!
Please enter your name here