In Slauson & Co., Google Investor Ron Conway Is Betting On More Than Money

A few years ago, two old friends found themselves in an unusual position: they were black venture capitalists in a white-dominated business.

In 2021, Austin Clements and Ajay Relan founded their own company, Slauson & Co., named after the famous thoroughfare in south LA. It is one of the most well-known of many recently formed firms, initiatives and funds – many founded after George Floyd’s murder – aimed at diversifying entrepreneurship. The premise is that different venture capitalists are funding more different founders, who in turn, if successful, will create jobs and wealth in different communities.

It’s a questionable premise in his ambition. Only a tiny fraction of startups in the United States, about 1%, receive venture capital. It’s even less successful. And VC-backed winners tend to have relatively few employees because part of the profitability they need to scale depends on keeping labor costs down. The history of Silicon Valley suggests that tech companies with venture capital are good at creating wealth for a small, isolated (white male) community.

But Slauson & Co. is interesting to watch for two reasons.

First is the active presence in the company of Ron Conway, probably Silicon Valley’s most famous early-stage investor. Conway, whose company is SV Angel, has invested in Google, Facebook, Door Dash, Airbnb and Square, among others. The network he uses to Slauson’s advantage — and remember, venture capital is human resources by another name — is unprecedented.

The second reason the company is interesting to watch is that Clements and Relan say their focus on new markets rather than technical innovation sets their company apart. Aiming the fire hose of venture capital at another community could create some very wealthy people of color, but it could also mean that the wealth is more widely distributed.

But returns, they say, are their goal.

The fund opened in 2021 with a typical timeframe of 10 years. The founders proposed more than 300 limited partners and ended up with 70 investors in Fund 1. Some investors thought “diversity” implied an impact fund and thus lower returns, the duo emailed me. But “we firmly believe that the exact opposite is true – our focus on inclusion leads to above-average performance.”

How the trio came together

Clements and Relan have been friends for 20 years, growing up in south LA, and they stayed in touch after graduating high school. Clements, a Morehouse College graduate who had his own web development company, went back to NYU to get into venture capital. “I didn’t see any difference between what I was doing and what the companies that were getting all this money were doing,” he said in an interview.

He got a job at a seed fund called Ten One Ten Ventures and went on to work for an entrepreneur support organization in LA

Meanwhile, Relan founded a media company – and eventually co-founded a venture firm, Queensbridge Ventures. The company was co-founded by Nasir Jones, also known as Nas the rapper.

Based on what they saw, they believed that the black community and other communities of color produced entrepreneurs who, with education and access to capital, could create fast-growing, industry-leading companies.

“We strongly believe that entrepreneurship transforms families, communities and the way society works to create a better, more inclusive future,” they told me via email.

Conway thought along the same lines. Like so many people, he was deeply shocked by the murder of George Floyd.

He argued that a diverse VC firm investing in diverse founders could channel more wealth to the black community. “The only way to solve this structural problem is to create VC funds to invest in color founders.” set up,” he said.

Attracting an Amazon Investor

Conway is more likely an agent of social change than he first appears. For example, he is a signer of the Giving Pledge and a longtime advocate of gun control, one of the most thankless and least trendy causes of American philanthropy. For years he helped pay back a $1 million award to make guns safer. an initiative that has quietly workedalthough Conway is still heavily involved in gun control advocacy.

He believed that a venture company led by People of Color can not only do good in the world, but also thrive as a company because of its unique advantages. “I think they’re going to get above-average VC returns,” he said. “If there are two large ponds with founders, the pond with white founders is where everyone fished.”

(Over the past 20 years, the average annualized return on venture capital has been 7.2%, according to Cambridge Associates).

Conway put $2 million into Slauson & Co. “I mentor them every day,” he said. “I’m constantly introducing them to people who might be able to help them.”

He’s also soliciting investments for the fund, including one from Jeff Wilke, the former CEO of Amazon’s global consumer business, who also had an epiphany during the pandemic.

“One of the things I started doing was thinking about my investment decisions and thinking about which companies I’ve backed with my own money and time.” Wilke told “And the truth is that until recently, every company I would have listed had the benefit of a privilege. So my friend Ron Conway called months ago and asked if I would invest my money and time to help two guys named Austin Clements and Ajay Relan start an LA-based company called Slauson & Co. Normally I wouldn’t have looked at something like this really new where they didn’t have a track record. But if everyone makes that choice and we allocate the capital that way, we will never overcome the inequality that has been widening over the years.”

Other investors include Ashton Kutcher, and Alpaca VC.

What the mentoring and the model look like

In response to Clements and Relan’s questions, Conway said he often accepts a call to discuss issues such as how to prioritize, how to raise this fund to likely raise a second, and how to keep his portfolio companies at the Recruitment helps and hire people. His son Topher, who works at SV Angels, often joins in.

The companies invested in Slauson differ from those of a typical venture fund in one respect, the two founders said in response to an emailed follow-up. Instead of relying on technology (or software), they draw on market insights from the diverse backgrounds of the founders.

“At Venture, the model requires that we stand behind companies that we believe have the opportunity to quickly become category-defining companies. The difference is that we don’t believe that these scalable concepts need to be based on breakthrough technological advances. In many cases, the innovation lies in customer insight and building tools that address a segment that has been ignored in the past.”

Three examples of businesses: Dallas-based Pressed Roots, a blowout bar for women with textured hair; LA-based EngineEars, a platform for audio engineers, artists and producers; and LA-based ComplYant, a small business tax corporation.

A Nonprofit Accelerator with the help of Howard Schultz

Slauson has also followed the VC model, creating his own accelerator, a nonprofit organization that offers mentoring and $20,000 in grants to help companies prepare for investment. Clements and Relan said the biggest limitation for various founders is access to capital and connections before VC founders make money.

Some of the companies involved are Washington, DC-based El Camino, a digital community for female travelers; Costa Mesa-based Unoma Haus, which designs and builds off-grid van conversions; and LA-based Wordsmyth, a platform that helps businesses hire black and other freelance writers.

Starbucks founder Howard Schultz is one of the people behind the accelerator. The Schultz Family Foundation has contributed $275,000 in the form of a philanthropic grant to support the operational costs of the Winter 2022 cohort, a spokesperson said via email.

“The foundation decided to invest in the program to learn more about the unique needs of diverse early-stage, high-growth companies and how accelerators can help them succeed,” the spokesperson said.

Where the rubber hits the road

In theory, with two talented, authentic founders and the help of Ron Conway, building a successful black-led venture capital fund should work.

But practice can be harder than theory when good intentions meet the real world. By the end of my interviews, my two main interests had morphed into two key questions:

Is Silicon Valley really meritocracy enough that the companies emerging from Slauson & Co in various holdings will find other investors in the financing chain? If we know anything after the last two years, it’s how much blatant and systemic racism exists in America.

The big question: Can venture capital work for broad economic development at all? And at the end of the day, maybe it’s not so much about turning VC into a tool to help black communities as it is about what happens to venture capital when it’s in the hands of more diverse people.

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