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Herbert Drayton is the CEO of HI Mark Capital, the first majority Black-owned venture capital firm founded in South Carolina.
HI Mark Capital is committed to investing in minority, female and indigenous founders across the southeast who traditionally face barriers to accessing capital.
Founded in March 2020, HI Mark Capital’s inaugural fund is committed to investing in women and BIPOC-led early-stage businesses in growing and competitive markets, while also providing the support and guidance new and experienced entrepreneurs need.
The Black Wall Street Times spoke with Drayton about how he’s keeping business booming across the South.
Ezekiel Walker: I see supporting Black-owned, women-owned, and BIPOC businesses are a priority for HI Mark. When did you become interested in venture capitalism?
Herbert Drayton: When George Floyd was murdered I had a couple of White colleagues reach out wanting to make a commitment and “do something for the Black community.” And my challenge to them was to go beyond charity and philanthropy because it’s not going to close the wealth gap. I told them they needed to invest in Black-owned businesses. A number of them said they would engage but quite frankly, when I later took them the deals, many said they were no longer interested. That’s when I found out things about their investment thesis, their geography, their verticals, they didn’t take the vital on any of them. I found out that less than 5% of VC money goes to female founders, less than 2% to Black founders. And if you’re a Black female it’s .2%. So who invests in them? It was obvious, Black VC’s invest in Black founders so in March of 2021, we officially launched fundraising and interviewed companies to invest in.
Ezekiel Walker: I talk to a lot of people in the Diversity, Equity, Inclusion space, not to generalize but a lot of the common statements I hear is that the window dressing and slogans are nice and they have one or two Black folks in positions of power, but the actual infrastructure itself does not change. Have you found this to be true in your experiences?
Herbert Drayton: I do a lot of work in DEI. Because it’s a relatively new space, what’s happening in a lot of cases is that a company will hire someone and they say “go do DEI stuff” when in actuality most people don’t know what to do because it’s not universally defined. We really have to understand what a good DEI program looks like, what a committed organization looks like. I remember sitting on a panel last year and spoke to the audience, ‘ask yourself if you’re a White person, ask yourself, how many times have I had a Black person over for dinner? How many times have you gone out to dinner with a Black person? If you’re a Black person? How many times have you invited a White person into your home?’ So for me, you can’t preach diversity and inclusion, but remain exclusive in your daily activities. That doesn’t make a whole lot of sense.
Ezekiel Walker: In your experiences, have companies you’ve assisted been open to change or maintained their standards despite clearly needing assistance in equity?
Herbert Drayton: I think they’re in a cautious middle. If you look at the process and policies that created this all-White leadership team, you have to ask, ‘how are you recruiting? How are you developing folks?’ [and so on] And with respect to businesses, I have been stunned by the lack of resources that have been committed to some of these companies that I’ve had conversations with.
Ezekiel Walker: Speaking of which, I wrote an article yesterday about the fact that HBCUs are 178 times less likely to receive foundational funding than the Ivy Leagues. It’s amazing that HBCUs and Black-owned businesses are even able to survive without a historic or present-day safety net.
Herbert Drayton: Well, what’s the best way to shut down a business? Starve them of capital, right? Yesterday, I attended a minority business accelerator, we have three minority business accelerators across the state, one in Charleston, Columbia, and Greenville. I told those entrepreneurs my goal, ‘whether I invest in your time, talent or treasure, I want to move you through the continuum that I went through. You start as an entrepreneur, you become an employer creating jobs, and then you move into the role of a philanthropist or investor. We have to start something, grow it, hire our own and re-invest in our people.
Ezekiel Walker: Can you speak to the culture of Charleston in relationship to its entrepreneurial spirit? With slave market and plantation houses as reminders of the not-so-distant past, do women-owned and BIPOC businesses have particular challenges advancing in the city of Charleston itself?
Herbert Drayton: The state has a lot of resources that BIPOC and women entrepreneurs can leverage. We just don’t know where those resources are. Relative to Charleston, the book that I love the most concerning business is called ‘Why Should White Guys Have All The Fun’ by Reginald Lewis. That’s a mantra I live by. I just got asked to be on one of the boards of the plantations here, and it would have been easy for me to say no, but I don’t think we change the narrative or help them to understand the positive or negative impact that they’re having on the community from the outside. I think you got to be on the inside and somebody needs to be at the table and to tell them when something is racially insensitive. In these rooms, I also create chairs for other folks that look like me. We have a Blackboard training program for our entrepreneurs because you can’t get them in the seat and then they don’t know what’s going on. We make sure they’re well-prepared.
As HI Mark Capital’s Managing Partner, Herbert Drayton has enjoyed nearly 30 years of experience establishing, buying, and managing a dozen businesses in a variety of industries, including healthcare, IT, SaaS, and corporate training.
The firm recently received an equity investment from Bank of America, whose partnership with the firm serves to further remove barriers to building wealth and reducing the wealth gap for minority and women entrepreneurs by contributing to HI Mark Capital’s $20 million fund target.
Highly dedicated and conscientious in driving exceptional results through strong business partnerships, flawless execution, and administration HI Mark has a proven track record of developing business by building, cultivating key relationships, and consistently generating new business through pointed communication.
This interview was edited for brevity.