Vanessa Roanhorse On Removing Barriers Stopping Indigenous Founders From Accessing Start-Up Capital
Vanessa is an inclusive solutions-driven problem solver committed to liberating all peoples and delivering impactful mechanisms for social, environmental and economic change.
She launched Roanhorse Consulting (RCLLC) in 2016, an Indigenous-led think tank. RCLLC co-designs wealth and power building efforts that directly invest in our leaders, support meaningful data collection informed by indigenous research approaches, and helps build thoughtful community-led projects that enforce values that put people at the centre. Vanessa got her management chops working for 7 years at a Chicago-based nonprofit, the Delta Institute. She sits on numerous boards & serves as an advisor to Decolonizing Wealth, Angels of Impact Fund, GenderSmart’s JEDI Working Group, and Social Venture Circle’s Restorative Investing Taskforce.
She is one of 8 co-founders of Native Women Lead, an organization dedicated to growing Native women into positions of leadership and business. Vanessa is Diné (Navajo) citizen and resides on Tiwa Territory (Albuquerque, NM).
Vanessa discusses ensuring financial prosperity and protecting the rights of Indigenous women in business and how she is developing an impact investment fund inclusive of all aspiring entrepreneurs regardless of their background.
Highlights from the interview (listen to the podcast for full details)
[Sarah Ripper] - To start off, could you please share a bit about your background and what led you to where you are today?
[Vanessa Roanhorse] - I am Navajo Diné from the Navajo Nation. I grew up on that nation but currently live here on Tiwa lands in Albuquerque, New Mexico. I have a twin sister who co-runs Roanhorse Consulting with me, the firm I started in 2016. I live here with my partner and our 9-year-old, who as of today is my height and wearing my shoe size! The journey to where I am today, probably like most people's and as an Indigenous woman was not clear. It was not a straight line, and this was not in the cards. I left home when I was young and went to an all-girls boarding school on the East Coast. From there, I moved from city to city. I wanted to work in the film industry, but it just wasn't a time in which they were looking to hire folks with my background. I found my way to Chicago where I worked for a sustainable not for profit, and for the first time in my life I was in a trusted environment. I didn't have this educational background, I'm a college dropout. The thing I tell people is I'm an excellent learner but terrible student. I do not like to be told what to do, which probably continues to be part of my story today. In Chicago, where I lived for 15 years and met my partner was where I got to play in the space around how can communities define wealth? How are communities and community leaders activating their wisdom to solve local challenges they are facing.
No matter how much money or expertise you have does not make up for that level of lived experience, wisdom and knowledge that comes from a place and people who know, because they’ve experienced the problem and solution so intimately.
Getting to sit with community organisers, activists, leaders, policymakers, teachers, and urban farmers in Chicago was particularly where I started to think differently and imagine a new economy. I had the chance to co-start and support a venture fund we developed at the organisation, the Delta Institute, working to build out state-wide initiatives to support green jobs. This was when Obama was President of the United States, and we thought green jobs were going to be the next big industry. Unfortunately, we didn't see that come to fruition after the 2008 housing collapse happened here instead. What I saw was all these brilliant people creating solutions. They were ready to take investment, but due to infrastructure, lack of resources, networks or budget fiduciary responsibilities, these folks were not getting money. These non-Indigenous, non-Black, non-Brown, non-queer, non-women, non-disabled organisations were the ones receiving funds. Instead of building the capacity of these people in these places, they were able to build their own and leave people in the same conditions. It was this experience, my own inability to be told what to do and having no problem jumping headfirst into the darkness which resulted in me moving back to New Mexico, where my community is from, and my family is close to. I had a 15-month-old baby and was trying to figure out what I was going to do, and nobody wanted to hire me because I didn't have a traditional resume. Roanhorse Consulting was born, out of pure need and forcing the ends to come together. I feel like as an Indigenous woman and mother, it was just something I saw my mother's, mother's, mother's mother does. It wasn't foreign to roll up your sleeves and just get it done. Whatever you have go to do, just get it done, that's what your charge is. Honestly, that ability for all those things to come together has just resulted in where I am today. I have a staff of ten full time employees, I co-founded a Native led women's organisation that serves Indigenous women to move into positions of leadership and power. I co-founded a group called Zebras United Global Org focused on mutualistic business structures and cooperative models. On top of that I get to raise a nine-year-old, who I'm doing all of this for.
As Co-founder of Native Women Lead and leader of other revolutionary projects, can you share more about your work?
The fund work I started for Native Women Lead came out of our work at Roanhorse Consulting. We started working locally in New Mexico with a credit union to develop a relationship based on character-based lending initiative. If anyone knows what that is, it is just not using the five C's of credit to underwrite and determine the risk portfolio of future borrowers. It was a microfinance model, and so in the co-creation of this initiative, we were able to bring it to Native Women Lead, particularly during the pandemic and launch an initiative, which started the vision for NWL to create a fund. Since then, at Roanhorse Consulting, we’ve been the partner for NWL to create these capital strategies through the continued building of their funds. The Revolutionary Fund is a concept Jaime Glossy and I, who used to be Co-director at NWL and is now the Managing Impact Investing Director at Common Future, created. We created it because we know there's a missing gap. There's this traditional lending capital, then there's ventures and everything in between which isn't designed by us or for us. More often what's happening is Indigenous people and women must go to predatory lenders to get capital. We don't have friends and family around us in the start-up sense, friends, and family around us look like watching our kids, bringing food over, or letting us borrow their car. It's not the 30-40-50- or 100-thousand-dollar investments you would normally be able to activate through a friends and family funding round. The vision for The Revolutionary Fund was to create an in between hybrid model. All our work at Roanhorse Consulting has focused on the fact that in this missing middle or gap we're talking about, there is so much space and opportunity for it to be filled by creative, innovative, product designs. This is whether it's revenue-based financing, blended financing, or integrated capital; we can leverage this infrastructure to move money that understands where those businesses are. It won’t be stuck in traditional bank lending, which is the most conservative, prohibitive, and historically traumatic for most communities of colour to access. We've lost local banking as an institution, so all we have are these big banks which frankly don't have a relationship with people or place. If we look at venture capital on the other end of the spectrum, in 2021 Pay Holdings Group shared that 0.004 percent of all venture capital went to Indigenous founders. If we’re looking at the current landscape, venture capital is constricting who's getting funding. It's not going to be the Indigenous female founder who's building a tech solution, it's going to unfortunately be the guy from WeWork who was also able to raise money from another fund.
The idea here is if that's the funding that's out there, we're not getting it and the traditional lending is not providing it. We need to see more venture funds being developed and launched by Indigenous people.
But when you look at the landscape, 99 percent of entrepreneurs aren't ever going to activate ventures. What are we creating and who are we creating it for? What we're creating is hopefully capital that's patient, long term, and understands return on investment doesn't need to be 7-10 times the amount, 1 or 2 times is enough.
Can you give us examples of organisations or Indigenous female led ventures and what their work looks like?
Three years ago, when we started thinking about what non-micro finance innovative funds should look like in 2019, the only organisation I knew which was even in the same space was called Raven Indigenous Capital Partners. Raven, Jamie, and I wanted to build out The Revolutionary Fund. Outside of that, we met a lot of folks working in banking or CDFI's, which are fantastic and native lead but still providing the same type of underwriting. They were using the same risk measures traditional banks were. From 2019 to today, there is now closer to 10 different funds being developed by Indigenous people. Some are for pure venture capital, investing in large renewable energy projects while others are in mining and extraction. Then there are more creative impact investing funds still based on equity, like Raven. There are organisations like Skodan Ventures, and Known Holdings particularly has an interest in supporting Indigenous people. There's the Fireweed Institute that's probably going to have fun and Change Labs Kinship Lending will announce new funds soon. There was a drought in 2019, there was essentially nothing happening in the space. Today what we're seeing is many different initiatives like Natives rising.
I'm so happy that through our bodies of work in building this conversation here in the United States, we've helped to unlock that discussion as well as push funders and investors to reimagine what their return on investment should look like.
They’re now thinking more critically about what it means to ask (particularly Indigenous people in the United States) to provide collateral when you look at the current numbers today? This is my friend Jamie's favourite statistic; the current land which was stolen from Indigenous people in the United States is today worth $23 trillion. To ask Indigenous people to continue to provide collateral is one of those moments where I think we could systematically change what it means to underwrite those most harmed and most stolen from.
What challenges and possibilities have you identified in this space?
One of the challenges is venture capital as a platform for increasing equity and access to wealth creation. Due to the current trend we're in, I think it's going to be harder to raise venture capital funds. To raise it for Indigenous people, it's going to be even harder. The reason is our population size when you look at the numbers is small. We can also look at the idea around the purpose of ventures. My experience is it's not that Indigenous or native founders don't want ventures; for most of them that's not the right fit. But also, there is this idea of giving up equity on a company, because there is still a lot of historical trauma. Between how capital conditions are unfolding today in the United States and how narrow it's going to get for different types of capital flows, this will be important to think about while we're creating these funds. The other thing is acknowledging the trauma of money, the trauma around capital does play a part in how we make decisions and where and how we want to spend our money and time.
Historically, we've not been treated well by this system, so there's a challenge or opportunity to question how we understand and package that so we can truly invest in Indigenous founders and understand their lived experience today.
This will also incorporate the historical relationship we have had in the past. On the other side, I think there's so much opportunity through playing with debt lending in a creative way. CDFI's (Community Development Financial Institutions) were created in the 90s for this reason, as an alternative to the traditional lending system. Unfortunately, that didn't come to fruition, but we're in a moment today with some resources. The Federal Government in the United States is providing what's called SSBCI, where they are underwriting a good portion of financing for small businesses to create new funds that are creative with debt and traditional debt lending. We're in a moment where we have the potential to reimagine the five Cs of credit, to reimagine what it means to ask for collateral and who carries risk. Is it the institution that has a $5 billion-like balance sheet, or is it the small borrower who's just trying to get that extra pickup truck so they can make more deliveries for their small business? Who should bear that risk? That's the opportunity I see, and I hope we as an industry and collective are focusing on what's happening in between venture and traditional lending. This is the space, and this is the opportunity we need to be living in.
To finish off, what books or resources would you recommend to our listeners?
Honestly, the most recent one is Jessica Norwood's book. She posits to us to imagine a world in which the economy loves black people. She’s one of the founders of Runway out of Oakland and now is investing in the south, particularly in Alabama. Her book talks about the realities of what we're facing today. It's called Believe-in-You Money: What Would It Look Like If the Economy Loved Black People? The reason I make that recommendation is she's coming from a place where she's had to invest millions of dollars into black and brown founders in the Bay Area, a community which has been highly gentrified and has members being pushed out due to that. The work they've done is foundational and has set the ground for so many people to rethink, how we do lend that's more thoughtful, patient, and equitable. She shares her stories and why, so it's just an uplifting book which to me centres on a living practitioner who's doing this work in real time. So much of the stuff that's written, is written from a non-Indigenous or non-black person's perspective. A non-Indigenous woman or black woman's perspective is what we all need to be centring on. That's why I was struggling to find a book recommendation, because I've got a lot of great books on venture capital and alternative financing, but they're all written by white guys in academic situations. I thought to myself that I want to promote a black woman. I want to promote an Indigenous woman; I want to promote an Indigenous queer trans woman if possible! If I can find a book that is written by these groups, those will be my recommendations.
