The Atlanta Hawks are launching a venture capital operation to support women- and minority-owned small businesses, which are often underfunded by traditional sources.
Steve Koonin, the CEO of the Atlanta Hawks and State Farm Arena, told The Atlanta Journal-Constitution on Wednesday the team is launching Hawks Ventures, a $50 million fund to support early-stage businesses. He said the NBA franchise can offer more than just funding, since its depth of experience with customer service, food, entertainment, media and much more.
“Sports is this giant megaphone. A lot of opportunities come to us that you want to look at and want to invest in,” Koonin said.
Venture capital is often a crucial source of early stage funding, the mother’s milk to grow upstart tech companies. But such investments can be high-risk, high-reward ventures, as such startups often are still refining their products and might not be profitable yet.
The Hawks’ venture fund comes at a time when venture capitalists are pulling back amid high inflation, rising interest rates and uncertain economic times. Georgia venture capital funding was $2.3 billion last year, dropping 43% from 2021′s record-setting $4 billion, the Atlanta Business Chronicle reported citing data from venture capital data company Pitchbook.
Despite Atlanta’s growing reputation as a technology hub, the Peach State has trailed rival startup hubs for investment funding in early stage companies. More than $100 billion in venture capital deals were recorded in California last year, according to Pitchbook data. Companies in rival Sun Belt states like Florida, North Carolina and Texas also received more VC investment than Georgia companies last year, Pitchbook data show.
The Hawks’ investment fund expands upon the franchise’s community-driven efforts.
In December 2020, the Hawks reached a historic agreement with Black-owned banks to refinance a $35 million loan for its practice facility. State Farm Arena was also used as the state’s largest voting precinct during the 2020 general election and subsequent double U.S. Senate runoffs, increasing in-person voting access amid the COVID-19 pandemic.
The Hawks principal owner Tony Ressler, who purchased the team with partners in 2015 for $730 million. Ressler also committed $40 million to multiple Black and minority entrepreneurial efforts in 2020 that’s separate from the Hawks Ventures business. He said in a news release that Hawks Venture will further his goal of “community-enhancing efforts” and working with the “significant untapped potential of minority- and women-led entrepreneurs.”
The venture capital fund is a continuation of those efforts, said David Garcia, who will lead Hawks Ventures as senior vice president and managing director of innovation and investments.
“This was a natural evolution to reach the community in a different way but to help solve some of the same challenges,” he said. “How do we provide economic empowerment to underrepresented communities?”
Garcia said businesses need to focus on improving customer experiences to have a shot at receiving the Hawks’ support. He expects to invest roughly $1 million apiece to startups in initial seed funding, while reserving some funds for additional investments.
Koonin said the Hawks plan to stick by these startups and support them beyond just writing a check.
“We don’t plan to fund them then fly,” he said.
Koonin added that women- and minority-led businesses are often ignored by venture capitalists. Private investment website Crunchbase found that during the first two quarters of last year, startups with at least one Black founder received only 1.2% of all venture funds across the country.
“We didn’t do it because it was philanthropy. We did it because it’s good business,” he said. “We believe that there are fabulous ideas in minority- and women-led startups that just aren’t getting the traction and funding because the numbers are infinitesimally small.”
Hawks Ventures also committed to providing the majority of its capital to minority- and women-led startups over the next five years.
What: The NBA’s Atlanta Hawks have announced a $50 million fund to support early-stage women- and minority-owned businesses.
More information is available at hawksvc.com or by emailing email@example.com.
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