Tracy Gray is Founder and Managing Partner of The 22 Fund, a venture capital fund that is facing investment and equity injustice head-on – in the finance sector, women and people of color are historically and consistently underrepresented.
In her varied career, Tracy has worked as Senior Advisor for International Business to the Mayor of Los Angeles, as a systems engineer (aka “rocket scientist!”) on a space shuttle mission, and following her 2015 TEDx Talk on “Why It’s Time for Women to be Sexist With Capital,” established We Are Enough, a non-profit focused on educating ALL women on investing in women-owned, for-profit businesses.
The 22 Fund builds upon that belief, that women and people of color don’t need any more “mentorship” or “technical assistance”; they need capital and help with exporting. It is a “mission-driven fund looking for high-impact and high-end returns” for climate-focused, self-sustaining technologies and ideas, and intentionally includes these historically overlooked groups.
Tracy focuses her portfolio on manufacturing companies, which are typically located in low- or moderate-income communities, with the goal of exporting to elevate the community via higher wages and greater access to opportunities. Exporting coupled with manufacturing sees wages nearing $100K annually on average, they’re more likely to have healthcare, and increased generational wealth for women and people of color, says Tracy. “Our mission is to create the clean, quality jobs of the future” in these lower-income communities.
The 22 Fund’s portfolio has launched products as disparate as:
a fertilizer grow-medium for indoor farming created from food waste, targeted for use in sub-Saharan Africa;
an alternative to the petroleum-based carbon black, the main ingredient in textile colors, produced from wood waste; and,
a hair care product for textured hair, which turned into Sienna Naturals, a company now co-owned by Issa Rae.
Tracy believes the time is right for an “all-government approach” to manufacturing and exports. “America is an insular, consumer-based economy that expects to sell just to each other – a system based largely on the fear of being taken advantage of, or the unknown – but economic instabilities aren’t well managed without exporting,” she explains.
Relying on government services – the Department of Commerce, the Small Business Administration, EXIM Bank – essentially comprises a concierge service that can move a company through:
Market analysis
Marketing partners on the ground
All the things you need to export
And these government agencies don’t market themselves so knowing what’s available to you is critical to global success. The 22 Fund will help by “providing the capital that doesn’t exist for these companies, especially for manufacturers, women, people of color, all of the capital gaps that exist.” All the entrepreneur needs to bring to the table is a good idea and the courage to succeed.
Links:
The 22 Fund - https://the22fund.com/
TedxOlympicBlvdWomen - https://www.youtube.com/watch?v=Uyggi2IYXXY
US Department of Commerce – Minority Business Development Agency - https://www.mbda.gov/
Small Business Administration Office of International Trade - https://www.sba.gov/about-sba/sba-locations/headquarters-offices/office-international-trade
EXIM Bank - https://www.exim.gov/solutions/get-financing
Connect with Wendy - https://www.linkedin.com/in/wendypease/
Connect with Tracy - https://www.linkedin.com/in/tracydgray/
Music: Fiddle-De-Dee by Shane Ivers - https://www.silvermansound.com
ATTENTION: Below is a machine generated transcription of the podcast. Yes, at Rapport International, we talk a lot about how machine translation is not good quality. Here you see an example of what a machine can do in your own your language. This transcription is provided as a gist and to give time indicators to find a topic of interest.
[00:01:00] Wendy: Welcome to this episode of The Global Marketing Show, and this is a continuation of the series of interviews that we're doing at the EXIM conference in DC and our next guest is Tracy Gray. She has got so many awards and so many interesting things about her that I don't even know where to start.
She's a top 50 influential women. She's done a TEDx talk. she co-wrote articles, she has been senior Advisor for International Business to the LA Mayor. It goes on and on and she's. The founder and managing partner of the 22 Fund. So Tracy, welcome so
Tracy: much. Thank you for having me.
I'm excited
Wendy: to talk to you. Yeah. Oh yes. You're doing some amazing things with investment and equity and [00:02:00] justice in the financial sector. So why don't you tell me about the 22 Fund
Tracy: and what you're doing? So, the 22 Fund is a early. Venture capital fund and we invest in manufacturing companies to help increase their export capacity or their international sales.
We are a mission driven fund, meaning that we expect high impact and high returns, and the return. The impact comes from the fact that exporting companies are more success. Higher revenues and they are most likely located in a low and moderate income communities, not exporting, but manufacturing companies.
Wendy: Okay. So you find the manufacturers that are in low income communities, you help them export and that raises the whole community. Yes. Because you pay higher wages Exactly.
Tracy: And offer opportunities. Yes. And exporting. When coupled with manufacturing, the wages are 94,000 a year on average and are more likely to have healthcare.
We're also, our mission is to increase generational [00:03:00] wealth for women and people of color. Yes. And so that's what we do. We're, and we're mainly climate, we only invest in climate, clean tech, sustainable manufacturing companies because manufacturing can be rather a dirty industry.
Wendy: Oh, right, right. So tell me, like, gimme some examples of the companies that you're working with and where they're
Tracy: located.
So I should say that we, our, our mission is to create what we call the clean quality. The future in low and moderate income communities. That all happens from our strategy. So a couple examples. One company we invested in, it's a black woman, an LGBTQ woman who makes a fertilizer and a grow medium for indoor farming from food waste.
So it's a circular economy. And what the reason we invested in her is that we. The issues in like Sub-Saharan Africa and in [00:04:00] Central America with the lands. Never coming back from a climate change. And most of the subsistence farmers around the world are women. And so we see a solution to these farmers as potential for indoor farming or vertical farming.
And so this medium will help with, for organic indoor farming, not just there's no chemicals in it. It's all clean. And so that's one.
Wendy: That's fantastic. So you, so the women can use this fertilizer to grow their own food and then create a
Tracy: business to support. Yeah, that's what we're, that's what we see. So we, so indoor farming I'm not sure we have to do a little more research on what's happening around indoor farming globally, but we see that's the future.
Wendy: Do you, you must be familiar with Opportunity International. No, that's a perfect marriage for that business. It's, they're a nonprofit that does [00:05:00] microlending to women in particular to help them like buy a sewing machine to start the
Tracy: business. So that's the opportunity. International. Yes. Finally in my head.
Wendy: Yes. Yeah. Rapport. International, we've donated to them before. To help support
Tracy: that mission. Yeah. Okay, great, great. Yeah, I'm gonna look in that. And then another example, a company that we're looking at right now. So that company was called Renewable Uhhuh. And this company, another company we're looking at, which is nature Coatings.
It's a. White woman. She makes a, a carbon black dye. So the most used dye in the world is carbon black. You know, you have it on mm-hmm. , everyone has black on, and you use black as a base for blue. A lot of different colors, but it's made from petroleum typically, so it's. The textile industry is the second most polluting industry in the world after oil and gas.
Wow. And a lot of it is from these chemicals and these dyes that leach into rivers and [00:06:00] streams. So she's come up with a carbon black that's made from wood waste. So once again, it's not using any new materials, it's leftover materials. So another circular economy business, and she's gonna locate her manufacturing in a small town in Georgia that has it's, I think it's like 52% black.
And the average wage is only $30,000. So she's gonna bring. The wages in this community and it all happens just from our investment strategy. So those are the type of companies, and we do anything from, we we're industry agnostic, so we even have a hair care product for textured hair. And the co-founder of that company, Sienna Naturals, is Issa Rae, the actress who It has this amazing following.
So yes, yes. That is one reason we invested in it, because consumer products, it's hard to [00:07:00] figure out who's gonna win, who's gonna rise above the noise, who it's all marketing at that point. And having someone like that with her platform is really what's really important to us to make that investment.
And it's a clean product and it's the first one where a dermatologist has tested and approved it recommended. . So that's kind of the, the type of businesses we do. We even have a, we have an ev. A ev charging company. We have so many, you know, so many different, because we don't care what industry, as long as you have products that are wanted around the world or
Wendy: needed around the world.
Okay, so let's bring the international part of it. You said that, you know, consumer product, that's where marketing comes in, but marketing comes in across all the industries. Yes. How are they doing? The global marketing? A
Tracy: lot of. Just starting to export. So we have a relationship with Commerce SBA and EXIM Bank.
And so we kind of [00:08:00] probably provide this concierge service for them. We have contact. That helps them move through the process to export and helps them with their market analysis, the marketing partners on the ground in the all the things you need. Wow. To export, we have these relationships. We're the first company, first Venture Fund to focus on export.
So it's new. We're trying out Yes. Different things we're gonna learn and see how it works, but having the relationship with this all of government approach to manufacturing and to exports is really helpful. And that's just happened in this administration. Yes. So it's really exciting for our companies to see that we can help them that way.
I, I, I
Wendy: think it's brilliant. I worked at the portfolio companies for venture funded companies, and so I've. Finger on the pulse, what's going on there? And I've just looked at the investors going, why are you not doing this? Do I have a call with a business school classmate of mine coming up to talk to him about Why aren't you talking to your companies about this and this is [00:09:00] the potential for it.
So I think you're brilliant. I think you're Absolut absolutely
brilliant.
Tracy: It's just, you know, our country is a very insular country. Yes. We're a consumer based economies that we expect to sell just to each. But you know, in the last recession we were hit hard because of that, because they weren't exporting.
Right. Because if it's, it's, it's not, I like to say it's not rocket science. And I worked on the space shuttle program, so I know exactly what rocket science is. I'm a systems engineer. It's, it's diversification around the world. So if one market is having some macroeconomic shock, you have some place to sell.
But if you only sell in the united. Yes. Then you're hit hard. And that's why we were hit so bad in the last recession. Potential recession coming up, we're doing it again. You know? And we need to get our companies to understand that exporting, and I think it's fear that stops people. Fear of the unknown.
Fear of being taken advantage, fear of being cheated, fear of everything. [00:10:00] And. You know, government and the nonprofits and service providers that help companies export, they don't market themselves. So no one even knows, most people don't know who XM Bank is. Most small businesses no. No, they don't. And we're trying to change
Wendy: that.
Yeah. So tell me about the conference. You're here, the XM bank. I'm, what do you hope to get
Tracy: out of this? Well, I was newly appointed to the women advancing Women in Business Advisory Council for XM Bank. It's the first time they've had an advisory council focused just on women. So that's really exciting.
So I was there yesterday where the advisory council, the larger advisory council, had their meeting with all of us attending. Then we had, we split off and did our individual. Council meeting, so I was there for that yesterday and then today I'm speaking on. A plenary on women, women exporting women businesses.
I don't know if they've done that before, but having the chair, Rita Joe, who's a [00:11:00] woman and a woman of color, it really does change how people approach the business of exporting. And so that's really exciting. So that's why I'm here. And just getting to seeing old friends that we haven't seen in a long time.
I just heard Isabel Guzman, who is the SBA administrator. She's a friend and she's talking about the connection between SBA and XM Bank and how exporting is throughout the government. And so they have their products and services around exports, so there's, and she's a woman of color, so it's, it's.
The time is now for women and people of color to really be able to leverage what the government is doing. Yeah. I've
Wendy: heard so many stories of people of color that are exporting and do phenomenally well. Mm-hmm. , yes, because cuz. The diversity that is inherent in doing global business. Mm-hmm. . Exactly.
Yeah. So it's, it's wonderful to hear. Yeah. Talking about the advisory board for your the people that are doing it. If you ever [00:12:00] need anybody on global marketing, certainly turn 'em onto this or we'll send them a copy Oh.
Tracy: Of my book. That's great. Yeah. I'll let, I'll let. I'll let our council know and hopefully I'll let the chair of exit bank know.
Wendy: Yeah, yeah. Great. Cuz let's get this community
Tracy: going and rising. Especially that you're a woman doing this and it's just so hard for women, especially women of color too. Yeah. To feel comfortable and have the capital. So we're trying to provide the capital that doesn't exist for these companies, especially for manufacturers, especially for women, just for people of color.
It's all of the lack of the capital gaps that are in the system that we're trying to. Yes, with our first time fund doing this,
Wendy: yes, there's another program called The 10 ksb. Have you heard of that program? It's 10,000 small businesses.
Tracy: It's Oh, yeah. I know. From Goldman Sachs launching. Yes, yes,
Wendy: yes. Yeah.
That's another program to get entrepreneurs in, to get some of the basics down and then to build Yeah. Their growth plan. That would be exporting. Yeah,
Tracy: and, and we're trying to, does 10,000 business do [00:13:00] global, do exporting? They don't do No, no,
Wendy: no, no. They don't do exporting. But to help with the business plan, you know, to go, you could overlap.
The growth strategy that you build in that plan with the exporting. So they, they've worked together mm-hmm. and there's, and even if your investee don't go to that, it's a good resource for you to find people that you might want to
Tracy: invest in. Yes. So I, I found with 10,000 women, it's really super small companies that I didn't, unless it's changed.
Cause I was when they launched it, I was in the mayor's office. And they launched in LA and
Wendy: 10,000, small 10,000 women is different than
Tracy: 10,000 and 10,000 small. We did both. You did both, yeah. And I thought they were, but I'll look and see. What, what size
Wendy: companies are you looking
Tracy: for? Cashflow Positive.
10 companies. You know, not a million in EBITDA, cuz that can be high, but you know, they're cashflow positive, you know, positive ebitda and so that's not really, some of our companies [00:14:00] are earlier. But only if we see that they can export around the world immediately. There are small companies startups, tech startups but I'll, I'll revisit 10,000 businesses to see what type of companies they have.
We tend to see our companies don't need any kind of business assistance other than exports, right? They don't need, okay, so they're, they've got more traction. There's plenty of companies so, People of color get a lot of mentoring, a lot of technical assistant. Okay. But no capital, no checks. So moving on from, they, we don't need anymore assistance.
Teaching, training,
Wendy: teaching assistant just gives, give us us the capital. Just
Tracy: give us capital and we'll do, well take off the blinders. Give us the money. Money, exactly. And show us the door we're gonna go through. Exactly. So that's what I'm pushing because I believe that people do the technical assistance and kick the can down the road.
Cause they don't want to. Investment capital to these companies and we these, that's what they need. No more, no more technical assistance, no more tech.
Wendy: Oh, you're taking it [00:15:00] to the next level. I love it. Yeah.
Tracy: Why are, how many men have to get technical assistance all the time? . Right. And people, white men do not, no one.
First thing they say to white men is, oh, we'll give you technical assistance then. That is never said by anyone, but always said to us.
Wendy: That is so true. I had never thought about that or noticed it. Oh, that's heartbreaking here. I thought it was something nice that we get technical assistance. I mean, it's
Tracy: nice, but that's all we get.
So we need to stop talking about that and do it and have checks. We don't need any more mentorship or all that stuff. We need checks. Check.
Wendy: Okay. Okay. , so what motivated you to start this, or what was the idea?
Tracy: Well, I fell into venture. I literally fell into venture capital back in the 2000, 1999, 2000.
And while I was doing that, , there were no women people of color coming in to get capital. Oh yeah. And as an engineer, I was like, that doesn't make any sense cuz the evidence is the majority of the [00:16:00] people in this country are women and people of color. Those are the majority of the people. Yet we're investing in a very small market, which business 1 0 1 is don't invest in a shrinking market.
Invest in a growing market. So it didn't make sense to me. And so from that time I wanted to start my own fund, but I didn't wanna rinse and. or copy and paste what white guys at Silicon Valley are doing. I wanted to do find a gap. Mm-hmm. . And that's how we, that's why I decided in manufacturing, cause manufacturing is so important to our economy.
It's a foundation of our economy, but very little money is going into manufacturing. Very little money was going into clean tech. More money's going into it now, and very little money is going into women and people of color. So I thought, okay, let me put 'em all together. And have the highest impact we can, and I believe we have Lar we'll have a greater impact on communities than any other.
Strategy that you look at? Absolutely.
Wendy: Building good jobs. Mm-hmm. is like number one, a good infrastructure enough to build them good jobs. [00:17:00] So put that in. Well that's impressive. I know you wanna get back to the conference. That's right. . Yeah. Yeah. Couple of questions. How can people
Tracy: reach you? If you go to our website, there's a.
Us on the web website. So just go to that. So the 22 Fund? Yeah, the 22 Fund.com and it's 22 with the Q2 fund.com, the number where did 22 come from? So there were 22 men and women of color called the por. Who founded Los Angeles and that's where he got the name.
Wendy: Oh, I knew there had to be a good story there.
Okay, so the website is www the 22 fund.com? Yes. Okay. And you know, this question's coming. What is your favorite
Tracy: foreign word? And I think I'm getting this right. It's jambo, which is what's the, language in Kenya Swahili. Okay. And it means, Oh, love. It just [00:18:00] sounds like, like, it sounds like welcome. Like there's gonna be a party when you come. So I just love, when I was in I was in Tanzania and they speak Swahili too, and it's like jumbo. Tim's like, oh, it's a party wherever you go. . That's
Wendy: great.
We've got somebody who works for us, Linda, who does our social media that lives in Kenya. Okay. So I'll have to call
Oh, good. Well, thank you so much. Any final words or recommendations before we sign
Tracy: off? I would say everyone look at exporting because you can, you're already competing on a global stage here cuz all these companies from around the world are coming to the United States, but we're not going to their country.
So there's an opportunity to beat your competition and grow your business super fast if you take that jump and I started.
Wendy: Oh my gosh. That's fantastic. Thank you so much. All right. Thank you. That'll be [00:19:00] the clip of the day.
Tracy: Oh, good. Good, good, good. Thank you for having me. I really appreciate you reaching out.
