Our February 2024 Community Spotlight features Frederik Groce, BLCK VC Co-Founder/Board co-chair and Deal Lead at Wellington Access Ventures. Prior to joining Wellington, Frederik was a Partner at Storm Ventures, and previously served as CEO of Stanford Student Enterprises, an organization that manages business enterprises created ‘for and by students’. Frederik holds a Bachelor of Arts, Political Science from Stanford University.
Pen Howell (Head of Community at BLKC VC): What inspired your journey into VC?
Fred: Funny enough, it was a mentor of mine in college; my roommate’s dad who’d founded and sold a few tech companies and became successful in Silicon Valley. At the time, I was actually evaluating a few job offers from different startups that had raised money and trying to determine which option would better position me to generate the most success for myself and my family. This gentleman listened to me, and ultimately, his feedback was, “I think you should go be a venture investor. I think trying to get a job as a VC will actually teach you how to figure this answer out on your own.” He pointed out that I had the network, having gone to Stanford, but more importantly, the first job I had out of Stanford was running a nonprofit that oversaw a lot of the incubator and accelerator programs on campus. And so I had a network of VCs, I just never thought of myself as necessarily a VC. And so, in many ways, the luckiness of having a mentor that was willing to say, “hey, you know, the jobs in front of you, those are not the ones you should pick at all” was partially what inspired me, and was actually the idea behind BLCK VC, because you can’t dream of doing something if you don’t have exposure, access or knowledge about that thing.
PH: Since founding BLCK VC, how has your perspective on the industry changed? Where have you seen measurable growth and where have the gaps widened?
Fred: Oh, man, there’s a lot to unpack in that question. I’ll start with saying this: without a doubt, venture is bigger than it’s ever been. When I think over what’s happened in the last 10 years, part of that is the globalization of the asset class to different geographies internationally, and part of that is the maturing of different geographies here in the US. Think about how large of a role ecosystems like New York, Atlanta, LA and the Midwest have now; certainly COVID accelerated a lot of that. I’ve also seen the development and explosion of pre-seed, which really, you know, was nascent, and that’s been an exciting sort of shift with a huge impact on underrepresented founders. I’ve also certainly seen a broader willingness to lean into awkward conversations around representation across venture, and that continues to be very exciting.
In terms of challenges, I think there’s still a need to ensure that, you know, the venture ecosystem is creating access at every stage and that those ranks are similarly diversified. Unfortunately, Sand Hill still has a lot of work to do in terms of truly diversifying and creating opportunity for everyone. One of the other dismal realities is that dollars going to diverse founders have started to diminish. More broadly, the entire industry has shrunk in terms of new dollars getting deployed as VCs are trying to figure out what this new macro economic environment means for their existing portfolio. Unfortunately, we live in a world where if the larger community is having a cold, then the underrepresented parts of the ecosystem have a fever.
PH: Speaking of investing in diverse founders, tell us about Wellington Access Ventures and the team leading the fund: how did this idea come to fruition?
Fred: Wellington Access Ventures, or WAV as we like to call it, is Wellington’s early stage fund. Wellington’s had a late stage venture practice for the better part of 25 years, and because of that success, there was a desire to expand its venture capabilities more broadly. There was a recognition though, that they’d really need to bring in investors that had experience on these earliest stages. As you know, early stage venture incorporates a lot more founder related work and dives into the weeds in a different way than a public market investor might. Post-George Floyd, there was also a greater desire across the organization to do something that helps diverse communities in a unique way.
One of the beautiful things is we (Jackson Cummings, Sasha McKenzie and Van Jones) all knew each other, for the most part, coming into this. We naturally coalesced around this idea of an early stage fund that can do Seed to Series A, but is focused on backing co-founders that are coming out of underrepresented communities. For us, that’s Black, Latine, and women-led companies, though we certainly take a broad look at what underrepresented means. Ultimately, we aim to be the partner that can help founders understand what’s coming next as they grow, while writing 1 to $6 million checks in a lead or co-lead spot. There aren’t a lot of funds with our remit and focus that are doing that, particularly funds that have made it clear they’re not concessionary. We’re not a double bottom line fund; Our view is that we can find alpha or upside in companies that are led by diverse individuals, period.
PH: What sectors and/or founders are you most interested and excited to support? Where is the greatest opportunity for transformative growth?
Fred: Our platform is a generalist one, meaning we invest in consumer, fintech, and b2b, and have investors that spend time thinking about each of those investable arenas. Now, I spend most of my time in the b2b world. So, you ask the b2b guy what he’s excited about, it’s going to be b2b — all the different flavors of it. I’m particularly excited and spending a lot of time in vertical SaaS, you know, vertical applications and industries where there’s a huge opportunity. The reality is SaaS and technology have really only innovated and supported workflows in a small percentage of organizations, industries, etc. It can be so easy to believe that software is everywhere, but you start to look at certain verticals, and the big software players are dot com era products that private equity have sat on and haven’t really brought innovation to. So, I’m looking at a lot of different industries from a vertical perspective and finding a lot of excitement in investing there. Obviously, you know, AI continues to be a huge investable theme, but I think about how that technology gets embedded and provides value within applications themselves. I tend to be an investor that likes to look at the practical utilization of the AI versus investing in the core technology on its own.
When evaluating opportunities, I really just love partnering with companies that have figured out an early sense of product market fit, are generating some revenue, and might not be fully baked yet but are moving in the right direction. That often means doing anywhere between $300,000 and $2 million dollars, where we can be a meaningful check and help them start to hire against the needs and think through that go to market strategy, which oftentimes will be the key piece that sets up the next round.
In terms of geographies, anywhere, to be honest. I’m spending time all across the United States right now, and as a team, we’re spending time in Latin America, and Europe, as well. The reality is, the opportunity is truly global at this point. While we certainly have a focus on underrepresented founders as a fund, the globe is diverse at the end of the day. And so I get really excited when I get to talk to immigrant founders that are building and working in the United States, but that are really a doorway to their own ecosystems in regions they call home.
