This Indigenous-led venture fund targets diverse ‘creative’ entrepreneurs across the US

By Jacob Maranda – Colorado Inno
October 23, 2023

There’s a big gap when it comes to venture capital flowing to companies founded by Indigenous people. Only 0.004% of the approximately $330 billion in venture capital invested in 2021 went to Indigenous founders, according to data from the VC website Crunchbase.

Skoden Ventures, a Denver and Santa Fe-based venture fund that launched in April, wants to play a role in filling that gap.

The fund — which gets its name from a slang term in Native communities for the phrase “Let’s go then” — plans to invest between $175,000 to $250,000 in early-stage creative and creative technology entrepreneurs from diverse backgrounds, including Indigenous, Black and women founders. Those could be founders of companies across a broad range of areas, from jewelry and makeup design to beadwork, art and entertainment.

It’s a diverse swath of companies that typically don’t receive much venture backing or other entrepreneurial support, said Kelly Holmes, one of Skoden’s founding partners who is based in Denver.

A Miniconjou Lakota woman from the Cheyenne River Reservation in South Dakota, Holmes launched her own creative enterprise, Native Max Magazine, when she was 20 years old. It’s the first and only magazine focused entirely on Native fashion and communities, she said.

“As a creative entrepreneur, I started my business with absolutely no funding, no outside resources, little tiny support,” Holmes said. “I really bring this experience to Skoden in wanting to provide what I needed as a creative entrepreneur myself at the very beginning of my business journey.”

Skoden, which has five advisors and four venture partners with two full-time staff and four part-time staff, plans to closeits first fund in 2024 and is targeting $10 million. It anticipates investing in about 30 early-stage companies, spread primarily across the U.S.The original plan was to invest in businesses located in the southwestern part of the U.S., but Holmes said the scope of the fund has since expanded.

“We’re receiving so much interest from potential investors, potential LPs, as well as the businesses and founders from all over the country,” Holmes said. “Right now, we are primarily focused on the western region of the country … but we’re not limiting it [to that region].”

How Skoden can fill a gap

Holmes and Alice Loy, one of the fund’s founding partners, came up with the idea for the creative-focused fund after seeing a lack of interest from investors in creative startups while at an accelerator program a little over a year ago.

Skoden anticipates closing the first deal out of its fund on Nov. 1, Holmes said. It’s currently in conversation with companies that meet its “investment thesis.”

“A lot of creative entrepreneurs are interested in raising capital, but the traditional venture capital structure or norms can be a turnoff or can be obfuscated and hard to navigate,” Loy said.

That’s why Skoden wants to combine equity investments with resources that entrepreneurs can use to help navigate the potentially confusing capital landscape, Loy said. Skoden’s website includes tutorials on subjects like company valuations and social media strategy.

Its investments and resource-based support will take a more holistic approach to measuring a company’s impact, not just its financial return. That might include giving back to a business’s community, or companies that want to help grow the culture surrounding their business, Loy said.

“Part of the reason some of the entrepreneurs we’ve been talking with are so excited is because they felt like they weren’t finding investors who spoke to that part of their business and their purpose and their vision for what they’re building,” Loy said. “It’s not just money. It’s more than that.”

To provide companies with more financial flexibility, Skoden offers different equity structures. That includes traditional equity investments and “shared earnings styled” equity investments — an agreement used as a substitute for other types of equity structures that normally don’t come with debt or a fixed repayment schedule, Loy said.

“By having a flexible suite of structures, we can work with a company like Meow Wolf that is pursuing extraordinary returns and has a global aspiration, but we could also work with companies that are growing 40% a year and want to create jobs here in New Mexico with New Mexicans,” she said. “It’s more flexible that way.”

Loy is also the CEO and co-founder of Creative Startups, a nonprofit based in Santa Fe that has helped creative entrepreneurs raise over $300 million across various industries. A majority of its investments have gone to businesses founded by women and people of color, according to its website.

Meet the Rematriating Economies Apprenticeship (REA) team

The team at The Future is Indigenous Women behind the Rematriating Economies Apprenticeship program. From left to right: Elyse Dempsey, Melissa Begay, Liz Gamboa, Justine Correa, Jacqueline Jennings, Cecily Engelhart, Vanessa Roanhorse and Jaime Gloshay. — Mathew Perez

Not the only one

Other organizations are working to fill similar gaps when it comes to Indigenous entrepreneurship.

Holmes, in addition to her work with Skoden Ventures, helps lead Creatives Indigenous, a Denver-basedaccelerator program focused on growing Indigenous creative entrepreneurs and their businesses through a blend of programs and resources.

“That’s what I’m trying to do with my work, just add more color to [the startup and venture capital space in] Denver,” Holmes said.

The Future is Indigenous Women, a coalition between three groups — Roanhorse Consulting, New Mexico Community Capital and Native Women Lead — is also working to close the gap. The coalition landed a $10 million grant in late 2021 to help fund a range of resources for entrepreneurial support and held its inaugural Rematriating Economies Apprenticeship program this summer.

The Co-op Capital Program, an initiative out of Nusenda Credit Union in Albuquerque, also helps fund Indigenous and undercapitalized entrepreneurs by partnering with other community organizations, like Native Women Lead.

“This isn’t just about business,” Vanessa Roanhorse, who founded the firm Roanhorse Consulting in 2016, told Albuquerque Business First in May. “We’re using entrepreneurship as a pathway, but we believe economic agency and mobility is possible if we put women back into positions of leadership and opportunity.”

Loy said the Native American Venture Capital Association is also looking to create partnerships with other organizations across the country. Holmes is also a founding board member of the association.