Featured Guest: Melissa Bradley
Melissa L. Bradley is Founder of 1863 Ventures, a business development program that accelerates New Majority entrepreneurs from high potential to high growth. In this role she created a community of over 10,000 New Majority entrepreneurs in three years. Melissa serves as General Partner of 1863 Venture Fund, Venture Partner at NextGen Ventures and serves an advisor to Reign Ventures, New Voices Foundation, as well as the Halcyon Fund. She is also a member of the Goldman Sachs’ One Million Black Women Advisory Council, Launch with GS Advisory Council, Fast Company Executive Board, Square & Forbes Small Business Advisory Team, as well as the Target Accelerators Entrepreneurs Advisory Council. Melissa is the former Co-Chair, National Advisory Council for Innovation and Entrepreneurship and was named one of The Most Entrepreneurial Women Investors in 2018.
Melissa is a professor at the McDonough School of Business at Georgetown University where she teaches impact investing, social entrepreneurship, P2P economies, and innovation. In 2021 she was awarded Peter W. Gonzalez, Jr. Award for Excellence in Adjunct Faculty Teaching. In 2020, Melissa received The Ideas Worth Teaching Award which celebrates exceptional courses that are preparing future business leaders to tackle society’s largest challenges and create a more inclusive, just, and sustainable version of capitalism.
Melissa’s educational background includes graduation from Georgetown University in 1989 with a Bachelor of Science degree in Finance from the School of Business, and a Master’s degree in Business Administration in Marketing from American University in 1993.
David Reiling is an innovative social entrepreneur focused on empowering individuals through community banking and financial technology. David is the Chief Executive Officer of Sunrise Banks and has been in the community development banking industry for more than 25 years.
[00:00:00] Melissa Bradley: When you look at the distribution of PPP loans, particularly to people of color, the majority of them came through FinTech platforms, which is ironic because we talk about well, we’re that relationship, the relationship is changing. And so, I would say, be prepared that so many things are going to happen via technology, but that does not undermine the need for a relationship with your bank or between your customers.
[00:00:28] David Reiling: Welcome to the NextGen Banker podcast, where we explore what’s next in banking and talk with the innovators who are responsible for creating positive change in the financial sector. I am your host, David Reiling and I am very excited to welcome Melissa Bradley to our show today. Melissa it’s so great to be with you today. I’ve been looking forward.
[00:00:46] Melissa Bradley: Thank you pleasure.
[00:00:47] David Reiling: So just a quick reminder for our audience to stick around at the end and listen to our musical feature. Each NextGen Banker episode showcases one new artist from somewhere around the globe representing a wide range of different genres. So be sure to check it out. It’s quite cool. I dig the artists that we have for this episode.
[00:01:06] David Reiling: So, Melissa got to give the audience a little background on you. You are a co-founder of Eureka, which provides tools to small businesses to help them grow their digital presence. You are the managing partner of 1863 Ventures, helping new majority founders and teams with a plethora of tools they need to be successful. And I love the description “new majority”, will have to go there a little bit.
[00:01:31] David Reiling: You are also co-founder of Sidecar Social Finance, which provides impact investing and capital services to investors and entrepreneurs. And I don’t know how you fit this all in, but you’re a professor at Georgetown University’s McDonough School of Business, which is also your Alma Mater, which is very cool.
[00:01:48] David Reiling: So welcome to the program, Melissa. And maybe I just start with the description, new majority. I love it. I it’s just resonates with me. Tell me a little bit about that.
[00:01:59] Melissa Bradley: Yeah, so I’m a, I’m a finance person. And so, I love numbers and ever since we’ve started using the term, people have had mixed reactions, but I think it represents a factual statement.
[00:02:10] Melissa Bradley: The majority of the world already consists of people of color. The majority of America is about to consist of mostly people of color. Love it, hate it, afraid of it, embrace it. It’s a fact and many states, some of which we be surprised by like Utah already outpaced by people of color. So, from a demographic perspective, when we use the word minority to speak about people of color, it’s just not quantitatively accurate.
[00:02:35] Melissa Bradley: And then certainly if you put it in the context of business and entrepreneurship, we had a 40% decline over entrepreneurship for the past 10 plus years. Over a million new businesses have been started since COVID and the majority of those founders are Black women. Followed by Latinas. And so, when you think about who are the burgeoning group of entrepreneurs, ironically, they’re women of color.
[00:02:59] Melissa Bradley: And so that both of those sets of statistics, the five, what we have decided is normal or traditional. And so, I thought it was important that we start to use a term and a frame that really speaks to their quantitative presence, but more importantly gives them greater power around their potential than just using the word minority, which tends to push people aside.
[00:03:20] David Reiling: Yeah. So, to me it speaks so much of the future. And what is positive from the standpoint of gosh, when you, when I think of the numbers and the demographics and the accretion to GDP, I mean, this is a positive for America and where in its growth and where it’s going and the inclusivity about it is all about how does we harness everybody in this, in this journey.
[00:03:43] David Reiling: It just is there. And so very cool.
[00:03:46] Melissa Bradley: Yeah. And, and to your point, right, if we don’t address it as the Citibank’s report talks about it, racism costs us $16 trillion. So, I mean, let me just say flat out as an American, that’s just a waste of money. Like I’m a practical person. And so, I think that there’s a financial and fiduciary duty that we have as a country.
[00:04:05] Melissa Bradley: There is just a moral obligation. There’s the factual opportunity for us to embrace. What’s changing about America which makes us great.
[00:04:12] David Reiling: Yeah, very cool. So, I have to ask you with all the things you’ve got going on. What are you passionate about these days? What’s where’s your mind?
[00:04:20] Melissa Bradley: So, I, I finally came up with this phrase that I have one goal, but many roles.
[00:04:26] Melissa Bradley: And so, I do lots of things, but the general consistent theme is really helping your majority populations recognize their economic potential. Not because I don’t want to help other people, but that’s where I think the greatest lift is needed. And so, two things I’m most excited about. One is the set of conversations that I have the privilege to be a part of that really is starting to look at systemic change around the pathway for entrepreneurs.
[00:04:49] Melissa Bradley: So not just continuing to piece mail, let’s do an accelerator here and let’s do a fund here, but how do we really create a longitudinal pathway from startup to exit? What are the investment options? What are the liquidity options? And really just brainstorming with a bunch of experts in our own free time to say, how do we really re-engineer the system?
[00:05:08] Melissa Bradley: And then the second thing I’m excited about is the fact that things are changing. You know, we have $300 billion of new money that was put in the hands of Black general partners of which they never had access before. And I’m one of them. And so, it’s really exciting to see the level of investment that many of us have been waiting a long time for, to be able to say we are ready to really start small business.
[00:05:31] Melissa Bradley: And let me be clear. It’s not just about me at that money is coming, but as you mentioned in my role as co-founder at Eureka, we have over 15,000 businesses on the platform that we see every single day, busting their butts to try to get ahead and create jobs. And so, these little pots of money that are coming 5,000, 10,000, a hundred thousand, they’re really gonna make a difference.
[00:05:51] Melissa Bradley: Because statistically, we know that if a business goes from one employee to at least one other employee, they double there. They can five to seven X, their annual revenue, which is huge. So, I say all that to say, yep, people are going to say I’m a clunky, but I like numbers because it actually makes this entire thing palatable and possible.
[00:06:12] David Reiling: Love it. I love the, where the data and the numbers come and maybe that, let me lead you right into 1863. Can you tell us a little bit about it? What is it what’s happening there? I find it really fascinating.
[00:06:24] Melissa Bradley: Yeah there’s 1863 ventures. And it was started because there was a recognition of three things. That not all businesses are the same.
[00:06:30] Melissa Bradley: And particularly when you start to look at BIPOC communities, we are less than 20% of all of our business are in tech. So, while there are amazing accelerators and incubators, most of our companies are not tech companies. And there weren’t a lot of options for CPG, beauty, health, healthcare food. So that was the one.
[00:06:49] Melissa Bradley: The second thing is no disrespect, but we found that most accelerated programs over 80% of them focused on startups. And that’s great, but knowing that less than more than 50% of startups fail, how do we catch them? So, we were very intentional of working with businesses that were already up and running and actually had revenue because they were left out there in the wind.
[00:07:07] Melissa Bradley: And so, our focus is really helping businesses who are already up and running past the founder hurdle to do scale, to grow, to grow their team, to expand their market distribution. That’s our sole focus. And so, one could say we’re like any other accelerator, except we don’t automatically invest.
[00:07:23] Melissa Bradley: But we’re there to really de-risk the entrepreneur by training around finances, financing, operations, staffing, and scale to connect them to markets. We have outbound relationships with target and Walmart and whole foods and lots of others. And then we actually did finally start a fund. And so, we invest in them to be able to help them scale.
[00:07:40] Melissa Bradley: But all of that is not just, we want to turn into businesses. We have a goal of creating a hundred billion dollars of new wealth by new majority entrepreneurs by 2030.
[00:07:48] David Reiling: Yeah, that is fantastic. And, you know, I just have to riff off that a little because I listened to an interview talks at GS or Goldman Sachs for those who don’t know that acronym.
[00:07:57] David Reiling: So, in the, I think the question was around the barriers that entrepreneurs were facing, and you led like, write the answer with confidence and then you went into access to capital and credit scores. And I was expecting those Being an entrepreneur myself. I was like, oh my gosh, confidence is the currency of the entrepreneur.
[00:08:15] David Reiling: It is what drives on a daily basis. I know from my own personal experience; I have my top 10 confidence builders. I go to a program called strategic coach. It is, it is what it is the fuel that keeps me going. And the optimism and sometimes the courage that’s necessary to kind of overcome everything.
[00:08:33] David Reiling: And so, I mean, I think when you have that support from 1863 and the people around it, that it’s providing you some of those technical skills, but also some of the real critical entrepreneur things that you sometimes only learn by hanging out with other entrepreneurs You really have to hang with that tribe to really kind of understand the mindset of, of what it’s like to, oh, I gotta do payroll today and yes.
[00:08:56] David Reiling: Then I got to do marketing and then, oh yeah, I got to figure out how to hire someone. I mean, it’s, it’s just every skill set imaginable, and it takes a lot out of an entrepreneurs I think confidence to kind of rise up to every day that they go to work. So.
[00:09:09] Melissa Bradley: But you’re absolutely right. You and I love that.
[00:09:12] Melissa Bradley: I actually wrote that down. That confidence is currency. I think it’s key because particularly, you know, because we don’t see a lot of images of entrepreneurs who are women and are people of color, our confidence already starts at a low level. And then when you don’t hear other people being honest around whoa, it’s noon and between now and three, I’ve got to do payroll and hire somebody and fire somebody and take care of my kids. And we just assume that it’s gotta be so easy. And we find that so many of our entrepreneurs falsely have imposter syndrome. When indeed I go, you’re pacing with your peers by gender by rate you’re, you’re, it’s a normal pathway.
[00:09:49] Melissa Bradley: So, I love that you shared that because that is, that’s a real issue for many entrepreneurs.
[00:09:53] David Reiling: No, absolutely. And I think you mentioned one other key thing, which I which is so true is that the personal and the business become intertwined. Like, hey, I got to go to the dentist. I didn’t do it last time because I had a meeting and you’re like, no, you got to take care of yourself.
[00:10:07] David Reiling: You know, you have to merge these two together in some way, shape or form. So let me switch to you, George Floyd. So not so much as the event, but as, as the trigger or the awakening. What do you see? Maybe the good, the bad, the ugly, the optimism, the pessimism. How has it changed things for you?
[00:10:26] Melissa Bradley: Well, so it’s it, I would say Black people got more popular.
[00:10:29] Melissa Bradley: And, and so, you know, I was at a practical level it hasn’t changed much, unfortunately. I live in Washington DC. I can still walk down the street and be followed or asked, is that your car or where do you live? So, I think, you know, at a, at a general level the cynicism and the skepticism around people of color has not gone.
[00:10:45] Melissa Bradley: I think that some of that is social, political, and historical. I would say that when it comes to small businesses, we saw a couple of things. We saw a record amounts of contributions to Black led organizations, to black agendas that we had never seen before. And, you know, kudos to them. I think what you found though in hindsight is all of those commitments that were made less than half of them have been fulfilled.
[00:11:07] Melissa Bradley: And so, I’m optimistic that people were excited. I’m concerned that people really didn’t know what they were doing, that they didn’t really understand how systemic and entrenched the challenges were that not a single organization could overcome them. We’re talking about policy issues and legislative issues at a federal level, state level, we’re talking about people’s opinions.
[00:11:23] Melissa Bradley: A grant of $5 million is not going to change that. So, I, I I’m optimistic that people tried and hopefully they don’t give up. I think from a business perspective, it’s exciting that more money is now a bait available to businesses led by people of color, which is great. There’s more funds led by black and brown GP’s that we’ve ever seen before.
[00:11:42] Melissa Bradley: And so that’s great. So, I think it was a moment of inflection for us to reflect and say, are we at least living the values that I think we were supposed to live as a country, that everybody has equal access? And I think there was some good discussions. You know, at the end of the day, I think there’s still a lot more work to be done.
[00:11:57] Melissa Bradley: You know, you alluded to this earlier, you know, all the money that can be put out there for George Floyd doesn’t change the inherent bias in a credit score. All the money that is flooded doesn’t, hasn’t moved the needle on home ownership in our communities, which is a key asset when you’re trying to start a business.
[00:12:11] Melissa Bradley: So, I’m optimistic that the conversations have changed. I’m mindful that people are, have a heightened awareness, and I think it’s a longitudinal process and we’ll see where.
[00:12:19] David Reiling: Yeah, those are really great comments. I mean, our at Sunrise, we feel like we’re, we’re on this journey. And the hard work is just beginning. In terms of great that there’s money and funding available.
[00:12:32] David Reiling: Now we got to dig in and partner with the likes of 1863’s and other folks in which to collaborate in which to have the right set people up for success. Money is just one aspect of it and it’s important to a certain extent, but the fact is you need more sauce, you need more flavors in there in which to make the recipe tastes, tastes good.
[00:12:53] David Reiling: You know, and people ask me, maybe I’ll ask you the same question. You know, what can I do as a, as a regular citizen to help? Like, I’m not worth $10 million. I can’t give that, but what can I do? What would you respond to that?
[00:13:06] Melissa Bradley: You know I think it’s the tiny actions. I think it is just being much more mindful as you go through the day of who you interact with, how you interact with and how you share those interactions.
[00:13:16] Melissa Bradley: You know, how you encounter somebody? I mean, I, I I’m from New York City. And so, I’m used to, not because of my color, because there’s New York. When you get on the subway, you hold your purse. But even just the election and he’s like, huh, are you holding it? You know what I mean? So, I think how we act, how we interact and then how we tell those stories.
[00:13:33] Melissa Bradley: Because I think the hardest thing of all of this honestly, is that if we have a bad interaction, we oftentimes share that more likely to have a good interaction and that negative narrative just persists through community after community, after community. So, I don’t think it takes a lot of money. I, I, you know, to your point, money is a means to an end. It’s not going to solve our larger problems, but I think if people can change their mindsets, we’re going to get a lot farther.
[00:13:54] David Reiling: Yeah, exactly. And you know, the funny thing that I do with people, because again, it’s, it’s always interesting. I don’t know where everyone’s coming from. You always have that. Okay.
[00:14:02] David Reiling: Where are you on the spectrum of being open to this and I start with a crazy question called, you know, do you like chicken? And they’re like, well, yeah, like checking them off. I know where the best wings are in Minneapolis. Do you want to have some really good wings? And they’re like, yeah, I’d love to like, okay, it’s pimentos, Jamaican kitchen.
[00:14:20] David Reiling: It’s the best jerk wings you’re going to have ever. But you’re going to have to go to this place and you’re going to have to get them in. You’re going to want to eat them there because of the smells and the tastes are just there. Will you promise me, you’d go? And will you tell me when you do, because really once you get them out and in, in engaging with people it’s, it’s, it’s not so fearful.
[00:14:38] David Reiling: Right?
[00:14:39] Melissa Bradley: So anyways, you have to create the space and the opportunity. I love exactly the continent, Minneapolis. I’m going, we’re going.
[00:14:45] David Reiling: Absolutely. We got a lot of food here in Minneapolis. It’s all. So, tell me this from the standpoint of we have a lot of bankers and financier type folks on, on the call and a lot of them want to do good.
[00:14:57] David Reiling: And the fact is, is that as we look out there, particularly whether it’s a business or a bank that wants to do good. Any advice when you. Kind of think about, you know, the doing well and the doing good. Gosh, you got to make a living, but how do I kind of walk and talk my values at the same time of being inclusive and being sustainable for the environment?
[00:15:16] David Reiling: Any, any secret sauce there in terms of trying to integrate those two?
[00:15:20] Melissa Bradley: So, I’ll try not to put my regulator head on since I used to be a financial regulator at OTS back in the day. And there’s a couple of things like one be patient with, change is hard. Whether you’re trying to change a habit of not smoking or not drinking to your perception of people when you see them walking in the street. So first be patient with yourself.
[00:15:37] Melissa Bradley: Second thing, it’s got to start within. So just do an assessment. Ask people. Create the space for folks to say, this is what’s working, and this is what’s not working. Whether it’s interaction amongst a diverse workforce or how people feel safe in a certain branch or how they feel when they look at their annual report and just allow people to have that safe space.
[00:15:55] Melissa Bradley: And then obviously when it comes to more financial thing, I would say re-examine how we do CRA. When I was at OTS, I was specifically in the CRA division and you know, it’s an antiquated law. But really think practically don’t think like, what is my regular going to give me as a score, but what are creative ways that I can really be in partnership with the community?
[00:16:16] Melissa Bradley: Because I find that a lot of people know what their community needs, and sometimes it’s a combination of grants and revenue-based financing and structured debt and, you know, a variable loan, whatever it is. And so, I would say the final thing is, is the finance. We have a lot of tools in our toolkit that we don’t use.
[00:16:35] Melissa Bradley: And so be creative. And, and I, I bet that for something like home ownership, you know, I, because I was a regulator, we’d send like, well, I tried to make those loans. And I’m like, I appreciate that you try. But from a non-financial perspective, what did you do? You know, we’re here. Find a local group, that’s doing homeownership training and send a staffer who’s an expert.
[00:16:55] Melissa Bradley: Create up a bunch of pamphlets that you can give to home ownership pros. Say, this is how you prepare to get it for a loan or same thing for small business, or allow people that, I mean, I know it’s COVID, but allow people to come into your branch in a safe space and have a business meeting.
[00:17:09] Melissa Bradley: Everything is not about money. It’s just really about being present and being available. Because everybody’s needs and understanding of the banking worlds are going to going to vary and it cannot be one size fits all which I know we’re tempted to because you know, it’s expensive when you try to scale it and be differentiated.
[00:17:24] David Reiling: Yeah. Yeah,
[00:17:26] David Reiling: I hear ya. But you know, I, I think that’s one of the secret sauces in this whole thing, particularly for maybe a lot of the bankers on is your difference, your uniqueness is your differentiator. It’s the place where it’s going to be profitable, if you will. But if you do the same old thing or you’re standardized, don’t expect a different outcome.
[00:17:45] David Reiling: You got to put yourself out there. And so, I always tell that some of the newer lenders I’m like, you just be yourself because everybody else is taken. Don’t try to be like so-and-so and so-and-so, you’re going to come with your own uniqueness and that’s either going to be good or bad. You might be in the wrong place, but you’ll find out.
[00:18:01] David Reiling: But if you’re trying to be someone else, you’re always going to be struggling with yourself. And so, try and get a little unique, get out there. So, one final question for you. This is the NextGen Banker question. What does the next gen banker look like? What do they possess to make this world better? More equitable? More sustaining?
[00:18:20] Melissa Bradley: Well, wow, that’s a great question. I would say. They’re younger and hipper than the bank characters that I grew up with, which is the blue suit, the white shirt, and the red tie. I would say they’re mobile. I would say they come to you versus you going to them. I would say they’re digital natives. And so, they’re able to talk to you on the phone in person, text you, slack you, whatever the case may be.
[00:18:44] Melissa Bradley: They’re highly empathetic because they recognize that the best way to retain a customer, to your point, is to understand their differentiation. And so, they’re consistently trying to find out your needs and be empathetic. And I would say they’re also innovative, you know. And there’s definitely a technological play.
[00:19:00] Melissa Bradley: When you look at the distribution of PPP loan, particularly to people of color, the majority of them came through FinTech platforms. Which is ironic because we talk about well, we’re that relationship, the relationship is changing. And so, I would say, be prepared that so many things are going to happen via technology, but that does not undermine the need for a relationship with your bank or between your customers.
[00:19:23] David Reiling: Wow. Fantastic. I love it. The high tech, the high touch, the relationships, still very key. Well, Melissa, thank you so much for joining us today, offering your insights. It’s always great to share thoughts with you and connect. Wish you all the best in all that you’re doing. And thanks again for being on the NextGen Banker.
[00:19:40] Melissa Bradley: Thank you for having me. My pleasure.
[00:19:44] Becca Hoeft: For this episode’s musical feature we’re showcasing The Choir. The Choir is a Nashville-based, Grammy-nominated, alternative rock band whose music has been described by the Los Angeles Times as “magical songs that combined strengths of murky, psychedelia with pure pop.” Here is Mystical World. By The Choir,
[00:20:55] Becca Hoeft: That was Mystical World by The Choir. You can find the choir’s music on Spotify, Apple Music, and most other streaming platforms. If you would like your music featured on the NextGen Banker podcast, email David@nextgen-banker.com Off Site Link with a link to your music and website. Thanks for listening to the NextGen Banker podcast.
[00:21:17] Becca Hoeft: We’ll see you next time.