Entrepreneur and investor Nitin Rai is on a bold mission to change the balance of women and minorities in business for better, and he backs his intentions with solid investments. Inclusion, he says, includes everybody. Diversity frequently describes women and minorities, while inclusion welcomes, as well, veterans, rural communities, and anyone or any group underrepresented, underserved or marginalized by changing economies.
He is bullish on an inclusive future, pointing to demographic trends in the country. We are growing more multicolored, “a United Colors of Bennetton”, he says. “Teenagers today have a very different view of the world, even from millennials. Inclusion and diversity are a part of their lives, especially in cities. They not only expect this to happen, they want it to happen. We must be conscious of this upcoming generation.”
“We have to resolve the income gap among communities. The best way is funding underserved and overlooked founders. These entrepreneurs will work harder and for less. That’s the kind of entrepreneur you want to invest in.”
“When I started First Insight 22 years ago to develop electronic management systems for eye care professionals, I wouldn’t say I was completely excluded, but I certainly wasn’t part of the club.” Indian immigrants, he says, were welcome and treated as great engineers, but we weren’t considered to be founders or leaders.
“I didn’t raise capital for the first two years, because I knew it would be difficult. So, when I raised my own fund, Elevate Capital, I thought we needed to be intentional in order to attract women and minorities. I want to focus on the impact, as well as make money. There are not many Impact funds around, certainly not in Oregon. Without impact, I am not really interested.”
An active investor since 2007, Nitin sits today on the boards of 11 startups, and is managing director of Portland, Oregon’s Elevate Capital which has two funds, a $10 million Elevate Capital fund and the new $3 million Elevate Inclusive Fund. In August 2016 the firm made investments in its initial cohort of women and minority entrepreneur-led start ups.
Blendoor founder Stephanie Lampkin is solving unconscious bias in the workplace with a blind app that allows merit-based matching for recruiters. Applicants apply without revealing name or gender, averting any bias that would move those with white- male-sounding names up more quickly. An African-American, Stephanie was told by a Silicon Valley tech giant she ‘wasn’t technical enough’ to work there, despite her Stanford computer science degree and MIT masters in business.
Another investment was to an at-home mom who needed funding to build an ecommerce business for her line of sustainably-sourced clothing for infants, Goumikids. Elevate invested in getting her business online. “Investors often overlook women-led tech-enabled and tech businesses,” he says.
To find and evaluate new start ups, Elevate uses an intake process based on inclusion, impact and being intentional. “When we announced the fund in January, we were fortunate to have the state of Oregon help us find the first companies. Now, companies meeting our criteria come to us because we are intentional. They won’t go to the standard VCs where they believe they will be rejected. Our mentoring mindset builds trust, a huge issue for underrepresented founders. The startups we want to attract are looking for help as well as money.
A longtime mentor to early-stage companies, Rai is President and chair of TiE Oregon, the local chapter of of TiE Global, the world’s largest non-profit entrepreneur organization with 57 chapters in 14 countries, on whose board he serves as well. Mentoring is a core element of non-profit TiE, founded in Silicon Valley by Indian immigrants. Many had come for advanced education and stayed to build companies. Some of these entrepreneurs formed TiE to give back to the country that gave them so much opportunity, he explains.
“TiE is open to engineers and entrepreneurs worldwide. All are welcome, it’s inclusive; you needn’t be a member of the Indian diaspora to be a member.”
He started mentoring before he started writing checks, a process Elevate continues. “When entrepreneurs are not ready for investment, we refer them to TiE for mentoring. When they are ready, they return for investment.”
When Nitin mentors, he shares the roughest of his own experience. When one startup had only two month’s runway left, he told the founder to ask his employees to take a pay cut. They did, 50% for two months. They got funded and had a successful exit. “Today, it is a major Oregon company, providing jobs and benefits to the state and the community.”
“I see investing in underserved minorities and women as a market opportunity. “One of our first companies Zapproved has provided us the best returns, so far. A second company, Geoloqi was acquired by Esri in about four years. A third, GlobeSherpa was sold to Moovel /Daimler.
Good examples of our first exits. “I’m going to make 50% of my investments in women-led startups. I’ll be tracking progress from all these companies. I’m pretty sure the results will be similar to what I’ve experienced in my angel investments.”
Nitin’s top tips for entrepreneurs
- Quit your job. If you have an idea, pursue it
- Find a good cofounder; Don’t go it alone
- Find a good mentor, someone who has done this before
and a bonus tip – Find a good lawyer
He cites many resources for startups to find help. TiE has mentors. Kauffman Foundation runs Startup Weekend. Accelerators in major metro cities have mentors. But, he says “Resources don’t come to you. You have to search and ask others. There are many resources and mentors, but you have to work to get them.”
From a CEO Coach Podcast first aired on Cranberry Radio on December 12, 2016