Candice Matthews Brackeen calls herself a serial entrepreneur.
“I started a lot of businesses, and I enjoy the process of business creation,” Brackeen said. “I’ve started lots of things. Some were horrible failures and some were great. This one is actually probably my best one yet.”
That's because Brackeen just raised nearly $50 million for the new Cincinnati-based venture capital firm Lightship Capital.
Brackeen and her husband, Brian Brackeen, are founders and general partners at the firm. Their initial goal was to raise $20 million.
“So we overshot the goal by quite a bit,” she said. “We have $45 million in capital commitments, with a line of sight to get the rest of the $50 (million).”
The firm is unique in the venture capital world. It is focused on finding strong, young tech companies that other venture capital firms may ignore. The company is looking to fund companies run by people of color, women, LGBTQIAP and those who are disabled.
“There’s this common thing that people say over and over like, ‘Well I would invest in these companies if I could find them.’ Well, somehow I’m able to find them. Why can’t they find them?” said Brackeen.
She said the firm is looking for companies that specialize in artificial intelligence, sustainability, e-commerce, consumer packaged goods and services or healthcare.
The first company to receive funding was Louisville-based Freshfry. Lightship Capital partnered with Open Prairie Rural Opportunities Fund to pour $3.25 million into the business.
Jeremiah Chapman, Freshfry founder and CEO, said he came up with the idea for the company based on something he learned from his grandmother.
“We used to fry together. And, she would always use potatoes to clean the oil," Chapman said. "I wanted to use that idea and elevate it.”
Chapman said he worked on the idea while he was a student studying to become a chemical engineer at the University of Louisville.
“I would take old oil from restaurants on campus and make biodiesel from it. And, to make a long story short, it’s really gross to do that,” he said.
However, the work paid off. Chapman developed pods to be used to filter and clean restaurant cooking oil. Within a few years, Chapman connected with a major food distributor, and he now has numerous customers.
Meanwhile, for Chapman and Lightship, there was a point when they weren't certain what would happen next.
“We actually had been working on this deal since February," Chapman said. "But, as we all know the world began to change for us in March."
“Pre-COVID we had raised $15 of the $20 million. COVID hit and we closed the office around mid-March. And, we thought, ‘Oh no, we are going to be putting the pause on this thing,'” Brackeen said.
However, according to Brackeen the pandemic created more of an opportunity for intimate discussions with potential funders over the importance of funding overlooked companies.
Then came the death of George Floyd.
“I’m not certain what it was about Mr. Floyd’s video that changed us all forever and changed the entire world," Brackeen said. "But, I think there was just something so frightening there that people realized that just a regular person lost their life for no apparent reason."
Several studies set minority representation as venture capitalists at between three and four percent. The numbers are lower for Black and Latinx women, with the percentage near zero.
“Economically there’s just such a huge disparity," Brackeen said. "The market has failed Black, indigenous, women, people of color, LGBTQIAP and the disabled.”
Brackeen hopes Lightship can demonstrate that under-served populations can be successful.
“The purpose is for us to be able to tell the stories of great Black-led companies, great women-led companies, great companies led by people who identify as LGBTQ.”
Brackeen said they expect to distribute the funds to about 36 companies over the next three years. Applications are available through their website.
“I think that people should look on the horizon for maybe 'fund two' coming from us at Lightship sooner rather than later," she said.