Nex Cubed has established a new fund to ensure HBCU founders will not be overlooked for opportunities.
HBCU Founders Fund
According to a press release provided to AfroTech, the global accelerator has launched a $40 million HBCU Founders Fund to boost startups led by at least one founder whom is an HBCU student, alum, or faculty.
The investment was supported by a $5 million commitment from Costco Wholesale, a company aligned with Nex Cubed’s mission to tackle disparities in venture capital funding for Black entrepreneurs.
“The Costco commitment validates both our investment thesis that there is a ton of talent within the HBCU community that can support a $40 million venture fund,” Marlon Evans, CEO of Nex Cubed, told AfroTech exclusively. “Then, I think, also for the founders, from their perspective, it can give them a sense of pride that there’s an investor like Costco that recognizes that talent, and that it’s not overlooking all the amazing opportunities that are coming out of HBCUs.”
“We are proud to partner with the HBCU Founders Fund to help foster a more inclusive venture capital environment and accelerate Black entrepreneurship,” Richard Galanti, Executive Vice President and Chief Financial Officer of Costco Wholesale, said in a news release.
Showcase Pitch Event
The funding will support a 16-week hybrid program set to take place in April. Nex Cubed is currently taking applicants until March 10 for the first cohort.
Evans states approximately 8-10 founders will be selected and receive an initial investment of $120,000. The program will lead up to an in-person Showcase Pitch Event set for this summer in Silicon Valley.
What’s more, startups that are showing continued progress could receive follow-on financing valued at an average of $250,000 when preparing to close a funding round.
The HBCU Founders Fund
Nex Cubed plans to support at least 10 more investments in 2023 and 80 total over the course of four years.
The HBCU Founders Fund is an extension of the HBCU Founders Initiative, which has provided hands-on support to over 600 students and alumni from 75 HBCUs.
“Historically, Black founders have received only 1-2 percent of venture funding annually,” Jade Lockard, Program Director at The HBCU Founders Initiative, said in a statement to AfroTech. “This illustrates the vast funding gap that Black founders face when raising venture funding. At Nex Cubed we are excited to fund often-overlooked founders such as HBCU Founders. This funding will lead to an increase in generational wealth that can then be circulated back into HBCU campuses. This is just the beginning.”
Editorial Note: This piece has been edited for clarity.