When OpenAI chairman Bret Taylor announced early last year he was resigning as co-CEO of Salesforce to start a new company, it kicked off an investor frenzy. Silicon Valley blueblood venture capital firms Benchmark and Sequoia won the ensuing sweepstakes to plough millions into conversational AI firm Sierra, the startup Taylor is building with Google Labs veteran Clay Bavor that’s now reportedly valued at nearly $1 billion.
But as investors hounded the entrepreneurs, it was Bavor who reached out to call an unlikely venture capitalist to invite him in: a former Boys & Girls Clubs of the Peninsula nonprofit director, Westbound Equity Partners cofounder Sean Mendy.
“We had to be selective in whom we brought in, and we wanted Westbound to be a part of it,” Bavor told Forbes. Since the investment — Sierra has declined to disclose the check sizes of any of its backers — Mendy has helped connect them to potential hires and customer leads outside their own networks, Bavor added. “It was really important to have a partner whom we felt could help us build a truly diverse and representative company from the outset.”
Such is a calling card for Mendy at Westbound, until today known as Concrete Rose Capital. Since its founding in 2019, the firm has invested in more than 40 startups along what Mendy calls “the diversity opportunity”: providing more capital to underrepresented founders, particularly Black and Latino ones, and to startups that primarily serve their communities; then, like with Sierra, it also looks to back blue-chip companies that want to prioritize a more equitable culture and workforce.
“If we can make the next Yahoo, the next LinkedIn, Facebook or Google diverse in those early days, then the folks that build wealth are going to be more diverse, and they’re going to have the opportunity to go out and be deemed more investable as founders, or become investors themselves,” Mendy said. “It transforms this vicious homogeneous cycle into a virtuous one that compounds over time.”
Investing out of their initial $25 million fund, Mendy and partners Ian Beadle, Will Bumpus and Danae Sterental wrote mostly smaller checks of a few hundred thousand dollars. With a new $100 million second fund, they’re looking to make bigger bets, leading rounds at the early stages of startup development. And they have a powerful group of institutional investors behind the firm now called Westbound, including Google parent Alphabet, MetLife, the Ford Foundation, the Charles and Lynn Schusterman Family Philanthropies, and other firms including Bessemer Venture Partners, Foundry Group, Lux Capital and Norwest Venture Partners, among others.
Like with its first fund, Westbound committed 50% of its profits to fund a corresponding foundation, which allocates that capital to a number of equity-focused non-profit organizations and programs in turn. As a young firm, Westbound is light on exits so far, but can point to a number of companies that have since reached higher valuations, such as Sierra and Esusu, a credit-building rent payments tool on the Forbes Fintech 50 list for 2024 and one of tech’s few Black-led billion-dollar startups.
“We aren’t investing in underrepresented founders as this altruistic thing,” Mendy told Forbes. “The fund is about investing in the best companies and performance. Explicit impact is what we’re doing on the foundation side.”
A Bay Area native, Mendy played soccer for Cornell before founding a startup that looked to connect underrepresented talent with large companies, then earning a Master’s at Stanford and MBA at USC. After a brief stint at another impact-focused startup, he joined the Boys & Girls Club of the Peninsula, an education-focused organization serving San Mateo County where he’d previously volunteered, to lead its development efforts. In that role, Mendy rubbed shoulders with a number of tech and venture capital leaders intertwined with the group as donors and partners, including LinkedIn chairman Jeff Weiner, who became an early mentor..
Convinced that raising a fund would allow him to scale his impact beyond the local community, Mendy impressed Alan Waxman, cofounding partner and CEO of $75 billion-in-assets investment firm Sixth Street, over first one, then more and more, coffee meetings, Waxman remembered. “He felt like what he’d been doing was addressing symptoms, not the root cause,” Waxman said. He offered Mendy a residency at his firm to train up fast on investing and fundraising. Mendy took it, and flourished, he added.
With Jason Norman, another former Boys & Girls Club director who had more recently worked for a solar energy company, he launched Concrete Rose Capital in 2019, named after a Tupac Shakur poem. Beadle, a business school pal who was investing at Littlebanc Advisors, and Bumpus, who had spent two years in business roles at Headspace, joined not long after.
Mendy, Norman and Bumpus, the son of television personality Gayle King and godson to Oprah Winfrey, all identified as Black; when the partners announced the firm publicly in July 2020, the wave of national protests following the murder of George Floyd was fresh. “This is clearly a moment — if not **the** moment — to focus on these opportunities,” they wrote.
Their mission resonated with Julia Collins, the former founder of automated pizza company Zume and now CEO of climate tech startup Planet FWD. While applying to business school, Collins had participated in a program for underrepresented young professionals, called MLT, that the firm’s foundation supported. Pitching and updating its partners felt like talking to friends, she added, far from more typical “soul crushing” fundraising experiences. “No matter how they position or what’s on their website, venture firms are generally very similar,” Collins said. “Concrete Rose had a very different model.”
Those negative experiences and closed doors, particularly for underrepresented founders, grew more common in the years since 2020’s Black Lives Matter protests. Even within a cooled-off venture capital market, support for Black-led VC firms and startups dropped faster than the overall industry. Respected investor Monique Woodard, founder of Cake Ventures, told Forbes in January 2023 that if fundraising as a woman was like crawling through glass, fundraising as a Black woman was like “crawling through glass with no clothes on, and they pour fire ants all over you.” That April, Forbes reported that Elon Musk’s Twitter had abruptly stopped answering capital calls for emerging managers, especially underrepresented ones, in which the company had previously invested. Black-founded startups, meanwhile, took in less than 0.5% of all venture dollars raised by U.S. startups that year, its lowest percentage since at least 2016, per a Crunchbase report.
Concrete Rose survived and even flourished, Mendy said, in part because, already deep into fundraising, it had approached new relationships in those emotional days of 2020 with caution. “We haven’t seen fundamental changes that solved the problem of the funding gap by any means,” Mendy said. “It’s more important than ever for the funds born of that moment to perform, and have the opportunity to perform.”
Westbound Equity Partners’ current partnership now includes Sterental, a Venezuelan immigrant and corporate culture expert who previously worked at Google on its employment policies; she joined in October 2020. Norman left last year, posting to LinkedIn that he wished the team “all the best in realizing their mission” and saying he was “forever thankful.” He remains a board director at /dev/color, a nonprofit working with Black software engineers backed by Westbound’s foundation.
Its new name references the Great Migration in which millions of Black Americans moved north and west in the 20th century. Plus, it more explicitly focuses the firm on its “equity” mission. That includes helping underrepresented founders navigate what Mendy said were unfair expectations to build great companies while also serving as symbols, mentors and constant event speakers for their investors and partners. “We tell them, just by doing the work, by being able to focus on what you’re doing, you’re creating value that’s going back to the community,” he said.
Wemimo Abbey, cofounder and co-CEO of Esusu, said he had already recommended other founders to Westbound and would continue doing so. Even before Mendy had set up his fund, he had connected Esusu to a key early backer, Serena Williams’ Serena Ventures; through his introduction, LinkedIn’s Weiner is also now an advisor. And while Esusu reached unicorn valuation status with later-stage investors including SoftBank, Abbey still talks to Mendy weekly.
“I fundamentally believe in what they’re doing,” said Abbey. “Founders of color, founders not of color, I will introduce any who will outperform, and whose values are aligned. That’s the most important thing.”
