Village Capital Seeks to Democratize EdTech Investment, Promote Diversity in Entrepreneurship

Hannah Nyren: Hi, this is Hannah Nyren with EdTech Times, and today I’m interviewing Nasir Qadree of Village Capital. How’s it going Nasir?

Nasir Qadree: It’s going well. Thank you so much, Hannah, for having us.

Hannah: So, tell me a little bit about the mission of Village Capital and what you guys are all about.

Nasir: At the core, Village Capital is here to democratize entrepreneurship. We source and we train and we invest in the very best entrepreneurs, solving global problems, and we do this in four different verticals (agriculture, financial services, health, energy) including education.

Hannah: Great. So you’ve been running the education department for Village Capital for awhile now. What particular educational initiatives have you been focusing on in the past year or so?

Nasir: Yes, good question. So, what we do differently…I think when you look at other accelerators — we like to call ourselves a venture development program — is that we think thoughtfully about a specific problem that’s happening in education, not only in the U.S., but also in emerging markets. So over the past two years, and even going forward, the crux of our investment pieces or problem statement will be to source and train and invest in education companies as well as implement tech companies that are bridging the skills gap between education and employment.

To date, we’ve trained 24 companies. This past year, we trained these companies from India, to companies that are here in U.S. — particularly companies that are often not in your traditional entrepreneurial hotbed like Silicon Valley, New York, or Boston. So most of our companies that we’ve trained and are in our portfolio are outside of your traditional hotbed.

Hannah: How do you work with companies from so many different places? Do they come to you? Do you work remotely with them? How does the process work?

Nasir: We’re very different. At the core, we’re an investment firm. So the way we invest in companies is through a very innovative — some may call it unorthodox — radical way of investing called peer selection, where essentially, we are leveling   the playing field in efforts to ensure that all entrepreneurs are getting a “swing at the plate.”

So what we do is, 8-12 high growth  companies go through a training program and at the end of the program the companies themselves actually do a peer-ranking assessment and the top two peer-ranked companies receive the pre-committed investment capital. So literally, we’re putting the venture capital model on its back and putting the capital in the hands of the entrepreneurs; those who are actually are closest to the problems, much more than your average investor. I think if we do it that way, I think what it has yielded is a more diverse pipeline of entrepreneurs getting invested and supported.

So to date we’re excited, and continuously increasing our percentage in women-led entrepreneurs getting investments. So today, that’s 42 percent. Your average venture capital portfolio yields 7 percent. Our portfolio today, it’s 23 percent people of color/minority-led entrepreneurs. You and I both know that number itself is very staggering — at one percent, you just walk in a room — I am typically a raisin in a pot full of vanilla ice cream if you want to call it that to be humorous. But it is a large call-to-action. We are moving our country and other emerging markets are consistently becoming more and more diversified. It’s important that our investors, our thought-leaders, are moving farther than 20 miles outside of Menlo Park, Mountain View, Manhattan, and Boston. So that’s our space in this ecosystem — to ensure that all entrepreneurs are getting a swing at the plate.

Hannah: Great. That’s interesting to hear about. I don’t think there are a lot of people who are deliberately focusing bringing diversity into entrepreneurship. I think that some people kind of have that as a secondary goal, but I don’t think there’s that much of an emphasis for a lot of these organizations.

Nasir: Yes, great point. I mean, the reality is great entrepreneurs exist everywhere. Again, 78 percent of investments over the past four years went to three states: California, Massachusetts, and New York. Over 50 percent of investments and media attention went to those same three states. We believe that’s actually wrong. It’s a shame that the 47 other states are fighting over the remaining 25-ish percent.

Hannah: Investments in general, or investments in education specifically?

Nasir: Great question. I think that is investments in general. I think…the numbers are still comparable, in terms of not only just capital, but also where the topics programs are based and who is getting the most media attention…80 percent of our current education portfolio is outside of your traditional entrepreneurial hotbed. We have companies in New Orleans like Kickboard, we have companies in Iowa City, Iowa, like Pear Deck, we have companies in Denver, like Pairin, and Austin, Texas, like Nepris. So really, leading the charge and at the same time being intentional in where we’re sourcing companies.

Hopefully, what this does is give other investors attention. And say: Look, actually we should earmark our traveling dollars to Buffalo, to Detroit, to Miami, to Baltimore, which you and I both know is a thriving entrepreneurial hotbed. And what we’re seeing is that these ecosystems that are often left out have the resources much like New York, maybe not the large city like New York, but they have strong ESO’s — entrepreneur support organizations — (he says something else after this but I can’t tell what it is) they have local policy makers and thought leaders that are getting behind innovation, and active investors who are looking to invest through either their own capital, family office, or foundations. A lot of times, they don’t know how. They’re kind of earmarking their dollars like they have to go to New York or San Francisco. But there are credible and investable entrepreneurs in their own backyard and that’s the charge we’re looking to share.

Hannah: So who are your favorites that you’ve worked with? What companies have you worked with that have been successful and you’ve been able to see a difference in how you’ve changed the way that their company grows?

Nasir: That’s a good question. I mean, I am biased. We have 11 education companies in our portfolio and between Pre-K through 12 and all the way through the workforce. I think when you look at companies that have made significant traction from very low revenue base to expanding their customers, I really like Nepris. Nepris is an incredible company that’s bridging the industry leaders into the classroom. This was an entrepreneur that spent 16 years at Texas Instruments — most of her team came from Texas Instruments — building these platforms.

Another platform is a company called Pairin that’s really incorporating soft skills in the hiring process; we don’t see that often.

The third company is called MPOWER Financing, where they help high-potential students really close a mark on that remaining offering alone to help their students. Where mommy and daddy don’t have great FICO scores, MPOWER bridges that resource financial gap for students who go through either undergraduate or graduate programs.

Hannah: So not only are you finding diverse edtech companies, but you’re finding edtech companies that help a diverse set of students as well.

Nasir: That’s very intentional in terms of companies that we look for. We would not work with an education or employment tech company where their main customer is that private school, their population is coming from more of the high-wealth family. Instead, companies that have revenue base or a model where they’re supporting low-wealth communities. I think that is very very important.

Hannah: What are you all hoping to work on in the future? How are things changing, how are things growing? What’s next for Village Capital?

Nasir: Yes, that’s a great question. So overall, our messaging is really changing. At the core, we are an investment firm — we hate to use the term “an accelerator program…”

Hannah: But educational investment is the nicest form of investment, right? That and green energy.

Nasir: Absolutely, cannot agree with you more. But when you look at the way we’re structured, we run these venture development programs around the world. We have a full-profit affiliate fund — an 18 million dollar fund — that makes investments directly into this peer review model. But when we continue to think about our education practice, our problem statement, we’re going to continue to focus mainly in the postsecondary plus — so postsecondary to workforce.

I want to be more specific there. So I look at this in three different buckets: So innovations, entrepreneurs that are working directly with universities to help advance the two-year to four-year degrees and efforts for students to find high-quality jobs.

Number two: there’s a huge conversation around rethinking the credentialing, badging, and degrees. So, helping both the employers and the college counselors and even the students really understand the value of their degree and what other assets are out there, whether it’s an enhancement in LinkedIn or there’s platforms out there called Incredible, and Degreed, and Credly that are doing an incredible job leading that space.

The third is when you look at the current workforce and helping current workers enhance their skills so that they’re able to move up into the ranks. Whether it’s workers who are unfortunately in the low-wage space or traditional high-wage jobs, really rethinking entrepreneurs playing a critical role in enhancing the skill and training for employees to enhance within their career. Continuing this theme around bridging the skills gap between education and employment will be our focus within our education practice.

Hannah: I’m glad that someone’s focusing on it, because it’s such an issue right now.

Nasir: It is! The job market is changing, and again starting at the Pre-K through 12 level, we are doing an intentional job in ensuring that our students are prepared for some form of postsecondary training and understanding the different career paths that will yield a high-wage lifestyle that they would want for their families. Having a little bit of empathy there, I would say, is something on my end that I’ve been very very intentional in ensuring with all our entrepreneurs and understanding the key challenges that are happening, particularly in our most vulnerable communities. That’s important.

Hannah: Great. Well, I’ll let you go. Thank you for talking with us today.

Nasir: Thank you so much. Thanks for having me Hannah, I really appreciate it.