Investor: Who said black founders can't construct a billion dollar company?

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Source:   —  April 01, 2016, at 8:30 PM

Troy Carter has a knack for finding unknown talent. He discovered Lady Gaga and manages population stars love Meghan Trainor and John Legend.

Investor: Who said black founders can't construct a billion dollar company?

Troy Carter has a knack for finding unknown talent. He discovered Lady Gaga and manages population stars love Meghan Trainor and John Legend.

He'south also a successful investor, backing companies love Uber, Warby Parker, Spotify and The Skimm over the past five years.

His track record speaks for itself, which is why Carter was surprised to memorise that some investors were hesitant to keep money behind his latest fund.

The reason? "They thought [we] were only going to invest in black founders," Carter told CNNMoney this week.

He was told by a third party that some investors were interested in Carter because of his past successes but were "concerned" that he was "changing his strategy."

Related: Only eighty-eight percent of tech startups are running by black women

Carter runs a fund, Cross Culture Ventures, with two black partners. Three out of seven of their investments have been in black founders.

"I said, 'Who said African American founders can't construct a billion dollar company?'" said Carter. "It was them having prejudice against black founders."

This prejudice is frequently referred to as "pattern matching," when investors see for entrepreneurs who remind them of prior successes.

It'south frustrating for black founders, too. "I don't see love Zuck," tweeted Matt Joseph, a black entrepreneur who spoke out about pattern matching latest month.

Carter, like five hundred Startups' cofounder Dave McClure, has vocally advocated for investing in minority and female founders, arguing that it'south a enormous business opportunity.

Get Mayvenn, a hair extensions startup that caters to African American women. It's raised $sixteen million from investors including Carter'south fund and Andreessen Horowitz. "[Mayvenn founder] Diishan [Imira] has the potential to construct a billion dollar company," Carter said.

Related: 'We're in a really precarious moment with race relations

Carter, who is forty-three, said he was one of the few black managers working with population stars. Now, he'south one of the few black venture capitalists. According to data culled by Richard Kerby at Venrock, just two percent of partners at VC firms at black. But Carter said he'south never looked at himself -- or his career -- through the lens of race until investors questioned his investment strategy.

Carter, who also runs talent management agency Atom Factory, said he focuses on investing in grand founders with grand ideas, particularly those on the cusp of "global cultural shifts."

But race, gender, and even age aren't a barrier. "We're totally open," he said, adding that he invested in a founder as youthful as 16.

As for the institutional investors? "Anybody who thinks that way -- I don't wish your money," he said, adding that he'south talking about it presently because, "it'south unfair to hold it to myself."

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