Q & A

We recently sat down with Astrid Scholz to find out more about her passions, her calling and generally dive in deeper to get to know her.

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What are some of the biggest challenges you’ve faced in your work over the last few years?

When George Floyd was murdered, everybody on the ICC steering committee immediately found themselves retriggered. On top of that, COVID was going on, and many of our committee members had become frontline responders. We had been planning to meet in person to do the strategic planning for the ICC, and suddenly that was out the window.

So we had a group of people who, despite sitting in renewed trauma and having to do unscheduled work in unprecedented times–the emotional and physical and logistical work of responding to the pandemic–persisted in meeting regularly to advance the ICC’s strategic roadmap. And it was hard, but we managed to persist on the strength of the affection and trust that we had built prior to what happened in the first quarter of 2020.

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Developing alternative business models to the startup status quo has become a central moral challenge of our time. These alternatives want to balance profit and purpose and put a premium on sharing power and resources.

Why is getting investments in this alternative model crucial for those who seek it?

Ultimately, it’s about changing the narrative. You have to look and act a certain way to be considered a fundable company by a venture capital firm, that’s a dominant narrative. There's also the internalized stories we tell ourselves. I can't tell you the number of Black and Brown folks I run into who think the next move is to create another nonprofit. Why are you buying into the narrative that Black and Brown people only deserve charity? But those narratives are incredibly powerful.

We lose the institutional collective knowledge of things that have already worked. Cooperatives are incredibly powerful and have a long history in the Black community. Mutual aid societies are cooperativism. Yet we forget what these things are and how they function, we forget that we have bodies of law that help us create new cooperatives. I think that's been the biggest challenge. These dominant narratives have infiltrated philanthropy and impact investing, and those need to change.

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How do we shift the narrative about the role of capital in BIPOC communities and reframe the perceptions of the risk involved?

Why are  we putting the emotional labor of shifting risk perceptions back on the people that are unfairly being perceived as too risky?. That’s in part why we branded the Black Papers as we did. We wanted to call that out and say, “This is not another white paper about the state of the world that’ll gather dust on a shelf. We're not going to litigate the absurdity of what we're experiencing.”

Make no mistake: It is absurd that 90% of all venture and capital financing goes to white men, not women and not people of color.

The reason that certain neighborhoods or investments are considered “too risky” is because of systemic racism, and we can point to the specific effect it has on the capital stack of our members using  real estate strategies to build wealth in their communities. Because of systemic racism, the valuation of a build in a certain neighborhood is artificially depressed by 20%. That's going to screw up the loan-to-value ratio for a BIPOC entrepreneur when they go to a commercial bank. The bank will consider that loan 20% more risky, but the risk is not real. It's a monstrous social construct. But that is the definition of systemic racism.

So what we do over time is reframe the narrative with things like the Black Papers. Then we create the capital instruments that allow us to prove the point about the statistics. And with a little bit of credit enhancement, as those real estate projects unfold, they're going to hit all their targets.

The funny thing is, I know several bankers who are middle-aged and older baby boomers, white guys, who will tell you that all banking used to be relationship-based. We're reinventing something that was the norm 50 years ago, but there were problems in that, because that relationship calculus wasn't playing out particularly well for Black and Brown folks in this country, but the mechanism of relationship-based learning was well-known and well established. That’s why we're so confident that these things will work–because they're not fundamentally new.

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What are the top three pieces of advice you would give to BIPOC entrepreneurs, who are dedicated to both purpose and profit, as they are starting or scaling their business?

I'm generally advising entrepreneurs of all backgrounds–whether they are from marginalized populations or come from privilege–to figure out how they can build a profitable business. Figure out how to sell your idea, your product or your service early and often. I think a lot of entrepreneurs get seduced into the venture track when they should be trying to get customers and get proof of market interest for your idea.

The second round of advice is always to find your community, find people who are building something similar or who are in a similar stage of business creation and ideation. That's incredibly powerful, to have a group of people you can bounce ideas off and trade resources with.

The third piece of advice is something that's followed me around since my days in nonprofit management: It's not a “no” until you've heard it 10 times. I think there's something about the mechanics of selling your idea or raising capital where polite behavior sort of goes out the window, just a little bit. It's okay to hound people. It's okay to come back and not take that first “no” as the definitive “no.”

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What is the call to action for investors who seek to promote social justice through investment solutions?

Ask every person you're interested in investing in the exact same questions. I often wish that we could do what big orchestras do, where the principals audition behind the curtain and you nip that bias in the bud. I think the call to action for investors is to deliberately check their bias and make sure that they're asking the same types of questions to all people who are coming to them with ideas or investable companies. Because today, they are not. We know, for example, that women get asked questions about risk mitigation, while men get asked about their vision. If you're interested in vision, you have to ask women about their vision. If you’re concerned about risk mitigation, you're going to have to ask men about how they're mitigating risk.