Creative Startups launches Native American-led venture fund

First-of-its-kind “impact” fund to invest in minority-run startups

Broken Arrow Glass Recycling founder and owner Shelby Kaye dumps waste glass into a crushing machine that will ground it into small pieces at the startup’s facility north of Santa Fe. Kaye, who turns the recycled glass into art products and material for decorative landscaping, hopes to expand her business with financial backing from the newly formed Skoden Ventures fund. - Eddie Moore / Journal
By Kevin Robinson-Avila – Albuquerque Journal
July 24, 2023 (Updated September 11, 2023)

Native American entrepreneur Kelly Holmes launched the world’s first Native fashion magazine in 2012 and has since expanded it into a thriving digital media platform that highlights indigenous art, culture and entertainment.

Now, the Minicoujou Lakota entrepreneur — who grew up on the Cheyenne River Reservation in South Dakota — is sharing her success as a mentor, and as an investor in many more budding creative startups run by aspiring Native American entrepreneurs, women and people of color in New Mexico and other Western states.

Holmes helped create and launch “Skoden Ventures” this year with Alice Loy, the creative industries guru who founded and runs the “Creative Startups” business accelerator in Santa Fe. Holmes and Loy will co-manage Skoden as a first-of-its-kind “impact” venture fund that they say specifically focuses on helping Black, Indigenous, and people of color, or “BIPOC,” businesses grow into successful, long-term endeavors that have positive social, environmental and cultural impacts in their communities.

“Venture capital is an essential source of funding to help launch and grow businesses, so we want to increase accessibility to startup capital for Indigenous, Black, brown and women entrepreneurs,” Holmes told the Journal. “We want to help build those creative businesses from scratch into successful ventures that contribute to local communities, promoting upward mobility.”

Skoden is built on an alternative approach to venture funding that could disrupt the traditional venture industry by broadening the goals and the conventional measurement of success — which is based on financial returns — to also emphasize the value of human growth, social betterment, cultural enrichment and natural, or ecological, preservation and improvement, Loy said.

It redefines the concept of value, or “capital,” to reflect holistic, Indigenous world views that are now woven into Skoden Venture’s foundational mission.

“Money, or financial capital, is just a tool we use that should return more capital than money alone,” Loy told the Journal. “Over the decades, venture capital has become a blunt tool to extract wealth and create a lot of money for a few while largely ignoring the benefits of ‘community capital.’ From our perspective, this is about re-investing in the ecological system, creating jobs, expanding cultural expression, and helping people to better communicate who we are as humans.”

Broken Arrow Glass Recycling, a creative startup that is seeking financing from the new Skoden Ventures fund, turns waste glass into colorful materials for art products and environmental uses. Shown here is some of their recycled glass. – Eddie Moore / Journal

Assisting underserved communities

Holmes and Loy built the foundational values for Skoden with input from other BIPOC entrepreneurs and investors after the women began seeking startup and growth capital for graduates of one of Creative Startups’ new accelerator programs called “Creatives Indigenous,” which offers intensive training bootcamps for Native American-run businesses.

The original Creative Startups program, which Loy launched in 2014, has to date trained and assisted nearly 650 creative businesses through scores of accelerator bootcamps. About 82% of those businesses are run by women and people of color, with about half based in New Mexico and the rest in other states and countries.

Collectively, they’ve gone on to raise about $315 million in funding to continue building and growing their ventures, Loy said.

Generally speaking, the creative industries encompass a broad swath of business activities, including everything from design, games, software and film to music, publishing, and performance and visual arts. And, globally, the creative economy is booming, expanding at twice the rate of the overall economy with an estimated $3 trillion in annual revenue and more than 50,000 creative ventures launched every year.

Given Creative Startups’ success over the past decade, Loy partnered last year with Holmes to build the new Creatives Indigenous program, which Holmes now runs from Denver, Colorado, where her own business, Native Max New Media, is based.

But after concluding one of the new bootcamp cohorts last year, Holmes and Loy had difficulty finding funding sources for program graduates, leading them to question why access to capital is so skewed for women and minorities.

In 2021, for example, venture funding in women-founded startups shrank to just 2% of total investment — its lowest level since 2016, according to statistics compiled by the women-focused entrepreneur-and-investor network Springboard Enterprises. And BIPOC entrepreneurs in general struggle to even get their foot in the door, winning just part of the funding they seek only 66% of the time, compared with 80% for white-led startups, according to 2019 data from the Federal Reserve.

“There’s a real lack of access for Indigenous women and people of color, and that needs to change,” Holmes said. “So we said, let’s start our own fund and help rewrite the rules to empower (BIPOC) entrepreneurs and increase accessibility to startup capital.”

They then began developing the foundational framework last September for Skoden, which is Native American youth slang for “Let’s go then,” Holmes said.

Broken Arrow Glass Recycling founder and owner Shelby Kaye stands on a terrazo walkway made with concrete and pieces of glass. The startup hopes to get funding from Skoden Ventures to scale the business. – Eddie Moore / Journal

Seeking prospective entrepreneurs

Creative Startups, which is sponsoring the initiative as Skoden’s “general partner,” aims to raise $10 million for Skoden’s first fund.

“We’re about a third of the way there,” Loy said. “We expect a ‘first close’ on the fund this fall, and then we’ll start making investments. We’re already talking with companies in New Mexico and beyond.”

The founders launched in April to educate target communities about the fund’s mission and goals, and to invite prospective entrepreneurs to begin discussions and prepare funding “pitches” for when investments begin.

“The traditional venture capital world is generally opaque and secret,” Holmes said. “We don’t want that. We want transparency to connect with entrepreneurs and increase accessibility, so we’re pushing our message out through social media.”

The fund will target early-stage startups already in business about one year, and up to three or four years. And, although it’s talking with many New Mexico-based entrepreneurs, it will invest in BIPOC businesses throughout Western states and beyond.

“We’re focused on New Mexico, which is a great place to lead our initiative because it reflects all the different forms of ‘capital’ we want to boost, given all the indigenous communities here,” Loy said. “But we’re not limited to New Mexico. We’re looking out across the West.”

Skoden managers will especially seek creative startups that are building innovative products and services in underserved communities, particularly those that can inject new vibrancy into existing markets, or even create entirely new venues, like the Meow Wolf artists’ collaborative in Santa Fe, Loy said.

One prospective company, for example, is building a virtual reality medium for Indigenous communities everywhere to connect and boost cultural traditions and native languages.

“It’s using artificial intelligence to revitalize indigenous language in the Northern Plains, allowing elders and young people to connect in cyberspace,” Loy said. “It uses words, data sets, sounds, intonation and more for young people to relearn native languages.”

Skoden will also provide critical technical assistance to help fund-connected companies further develop and grow their businesses, said Anthony Marquez, a Native American who grew up on the Navajo Nation and earned degrees in management services and electrical engineering from Stanford.

Marquez co-founded Praetorian — a highly successful, Texas-based cybersecurity firm — and is particularly skilled in helping companies scale their business operations and markets.

“Most people from Indigenous communities don’t have the experience, networks and connections they need as entrepreneurs, and traditional venture investors generally don’t believe in them enough to provide capital,” Marquez told the Journal. “Through Skoden, we can bring critical knowledge, financial backing and experienced investors who believe in them and can help them succeed.”

Trevor Wolfe — an investor and longtime Creative Startups board member — said Skoden is bringing critical innovation to the 60-year-old venture capital industry, which has never focused in any significant way on underserved communities.

“The venture industry invests in new, innovative technologies, products and services, yet the industry itself needs innovation,” Wolfe told the Journal. “It focuses on successful ‘exits’ by building companies up to eventually either go public or be sold off to a larger company. But many startup entrepreneurs want to build stable, sustainable companies that will remain local and serve their communities in the long term, and at Skoden, we’ll work to help them achieve that.”