EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.
This week, Elana talks with Daniel Balzora, Managing Partner, Macellum Private Capital.
What is your outlook for investing in minority-owned businesses in consumer and retail?
Very positive. And extremely exciting! The market has grown significantly due to increasing consumer awareness, sentiment, and demand for products and services from these companies along with the Fortune 500’s desire to diversify its offerings as evidenced by initiatives such as the 15 Percent Pledge, which calls for major retailers to dedicate 15% of their shelf space to Black-owned brands. We estimate that initiatives like these along with the increased consumer demand has created over a $1 trillion market opportunity.
What are the greatest opportunities you see and why?
This is an underdeveloped market, evidenced by barely 3% of venture capital investment dollars going to Black and Latino founders. In addition to a lack of access to capital, these businesses have traditionally encountered disadvantages and barriers to scaling due to insufficient strategic and operational resources and the lack of deep networks. This translates into unmet needs that capital partners can fulfill by backing high-quality Black and minority founders and providing the resources they need to scale their businesses more quickly and efficiently.
As you may know, we launched Macellum Private Capital this year, a private investment firm focused on investing in Black- and minority-owned/led businesses in the consumer industry to address this underdeveloped market.
What are the greatest challenges you face and why?
As with any growth capital investment model, finding and partnering with strong founders and management teams that share our values and want a strategic investor can be challenging, which is why our investment and sector experience, strategic relationships with G-III (NASDAQ: GIII), Citi Trends (NASDAQ: CTRN), and Bob Johnson (Founder of BET and The RLJ Companies), and deep networks throughout the consumer industry are so valuable. That said, we continue to proactively meet founders to showcase our unique investment strategy and capabilities that can help them scale their businesses. Proving that we are a trusted partner and resource to management teams is critical in order to stand out.
The views and opinions expressed above are of the interviewee only, and do not/are not intended to reflect the views of EisnerAmper.