Hampton Roads investment fund aims to empower regional Black and innovative entrepreneurs

Hampton Roads startups can tap another source of investment backed by federal grant money and a statewide effort to grow and attract emerging or expanding businesses.

Earlier in May, Gov. Glenn Youngkin announced the launch of Virginia Invests, which aims to leverage partnerships with seven venture capital fund managers to attract $100 million for 100 Virginia startups over the next five years.

The BFM Fund, based in Hampton and co-managed by Himalaya Rao-Potlapally and Rachel Wilson, is one of the state’s selected partners. The seed-stage investment fund originally launched in 2020 in Portland, Oregon. The duo relocated to Hampton Roads last year eager to help grow the region’s entrepreneurial ecosystem, Rao-Potlapally said.

“We’ve been very excited because we’re finding a ton of innovation right here in Hampton,” she said.

BFM stands for Black Founders Matter, and the fund focuses on Black and innovative entrepreneurs in tech and product-based businesses, she said.

“Entrepreneurship can be utilized as a pathway for economic development, particularly by people who have a different socioeconomic background,” she said.

Rao-Potlapally said she couldn’t disclose the total amount BFM received from Virginia Invests, but check sizes ranged from $3 million to $10 million for the seven selected fund managers. BFM plans to ink about 40 deals over the course of the fund with initial checks between $200,000 to $250,000.

Virginia Innovation Partnership Corp. leads Virginia Invests and is committing $40 million to the seven funds using a previously awarded grant from the U.S. Treasury Department’s State Small Business Credit Initiative, VIPC President and CEO Joseph Benevento said. The seven investment fund managers also committed to raising their own funds to total a collective $100 million.

The state innovation partnership has been active in Hampton Roads for decades. Benevento said the new effort will help underrepresented entrepreneurs and founders engage with capital providers. The majority of the capital is going to be generated from out of the state, which Benevento said will grow the available pie.

“For every dollar that VIPC is putting to work, we think it will actually activate 10 more dollars from the private investor market into Virginia startups,” Benevento said.

The fund manager partners are also committed to developing connections within their local entrepreneurial ecosystems, including historical black colleges and universities, veteran founder communities and startup accelerators. Benevento said state leaders estimate that will influence more than 1,000 entrepreneurs throughout Virginia.