Three of Charlotte’s noted business leaders are testing what happens when minority-led companies have access to both financial and social capital.
A new investment firm, Bright Hope Capital LLC, is providing dollars and leveraging decades of executive experience with an eye toward creating wealth and opportunities for Black- and Hispanic-owned businesses in the Charlotte region. The firm’s ownership group includes Malcomb Coley, Charlotte managing partner at Ernst & Young; Lloyd Yates, a former executive vice president at Duke Energy; and Hugh McColl, the former Bank of America CEO.
Why it matters: Access to capital is often cited as the stumbling block for Black business owners. Black-owned businesses also suffer, in many cases, from a lack of experience and executive leadership.
Bright Hope Capital will seek to address both issues by investing in local companies through “acquisitions, capital investments or purchasing a majority-owned business and making it a minority-owned business,” Coley told Qcity Metro. (Coley and Yates are Black; McColl is White.)
The partners also said the companies they buy or invest in will commit to paying their employees at least $15 an hour, in addition to providing adequate health care and education assistance.
“For each of us, this is not just about a return on investment. It’s about impact,” McColl said in a statement. “We want to be a force for good so businesses that have historically lacked the necessary resources can thrive and create the kind of economic impact that will benefit the Charlotte community, which we all love so dearly.”
On Monday, the firm announced its first acquisition; it bought R.J. Leeper Construction, one of the region’s biggest Black-owned businesses, for an undisclosed price, a deal first reported by The Charlotte Ledger. Ron Leeper, a Charlotte City Council member in the 1970s and 1980s, founded the construction company in 1993 after years of meeting with McColl to discuss the lack of African Americans in the construction industry.
Leeper said he’ll remain a consultant but tapped at-large Charlotte City Council member James “Smuggie” Mitchell Jr. as president of the newly acquired company. The two have a longstanding relationship that goes back 30 years.
“It was humbling,” Mitchell said during a conference call Monday. “I call him ‘mentor.’ [He’s] someone who introduced me to giving back to the community, someone who mentored me to be a public servant. And about 2013, he introduced me to construction.”
The company has completed work on more than 150 projects, including the Charlotte Transportation Center and Truist Field (formerly BB&T Ballpark). Current joint-venture projects include the Mecklenburg County library in uptown, renovations at the Charlotte Convention Center and expansions at the Charlotte Douglas International Airport.
A point of caution
Shante Williams, a health care venture capitalist and board chair of the Charlotte Mecklenburg Black Chamber of Commerce, says Bright Hope Capital’s efforts are part of the solution to closing the racial wealth gap.
“Private equity plays a pivotal role in helping businesses grow and scale and creating wealth for the founders or the owners of those companies,” she said.
However, she said she hopes to see diversity in the firm’s portfolio across gender, age and industries.
“We know that less than 2% of all VC and PE money goes to women-owned businesses, so it’ll be very important to have diversity on their board as well as in their founding partners,” Williams said. “I’m really hoping that we see a lot of Black tech firms get some of that attention and some of that private equity money.”
Coley said that based on the firm’s current capitalization, the amount of which he did not disclose, the founding partners anticipate doing about a dozen deals. Investment decisions, he said, will be based on facts presented.
“It’s looking at businesses across all different sectors and spectrum and trying to understand how do we better utilize our financial capital,” Coley said. But more important than financial capital is social capital. How do we leverage social capital to get access to opportunities?”
The McColl effect
McColl, the former Bank of America CEO, knows plenty about the power of opportunity. As he strung together mergers and acquisition to build the nation’s largest retail bank, he used Bank of America to invest heavily in Charlotte’s growth.
Some of those investment dollars found their way to support aspiring Black entrepreneurs, a sector traditionally ignored by big lenders. In retirement, McColl has invested time and money in early-childhood education, affordable-housing projects and job programs, especially on Charlotte’s historically Black west side.
He also has continued to mentor Black business owners, including Shaun Corbett, who operates a barbershop inside a Walmart Supercenter in west Charlotte.
In a 2017 article in Politico Magazine, under the headline “Hugh McColl’s last great investment,” writer Michael Graff outlined how, after protests erupted in Charlotte following the fatal police shooting of Keith Lamont Scott the previous year, the retired banker encountered, and later befriended, a little-known Black activist named Braxton Winston. With help from McColl and his network of donors, Winston ran a successful campaign to win an at-large seat on Charlotte’s city council.
Leeper, who got support from McColl early on, said he plans to retire now that Bright Hope Capital has bought his business.
“This acquisition represents a significant and exciting milestone for our company,” Leeper said in a statement. “I’ve come full circle with Mr. McColl first encouraging me to enter the construction business, and now, leveraging his team’s expertise to grow the business I’ve poured my heart into for more than 25 years.”