USING THE ‘Rooney Rule’
New venture capital firm wants to emulate Steelers by requiring diversity when offering startup funding
Will Allen, a former NFL player with the Steelers, noticed a lot of similarities among the skills needed to make it as a professional athlete and as a successful entrepreneur or investor.
Problem-solving. A solutions-oriented mindset. Strategy and creativity. Complete optimism.
The Steelers safety turned angel investor and venture capitalist is one of four co-founders for Magarac Venture Partners, an investment firm that launched in Pittsburgh on Wednesday. The firm plans to invest in early stage startups in Pittsburgh and the Midwest that focus on software, robotics and med tech.
Magarac Venture Partners, or MVP, is also focused on diversity, equity and inclusion efforts in the tech field. To do so, Mr. Allen and his co-founders took a page from the Steelers’ playbook.
The firm plans to invoke the “Rooney Rule” when making decisions about which startups it will back and when to help those startups grow. The rule, named after late Steelers owner Dan Rooney, requires NFL teams to interview minority candidates for coaching positions and other roles.
At MVP, the co-founders said the companies in its portfolio should have a person of color, woman, first-generation immigrant and/or LGBTQ+ representation on its leadership team. MVP will support entrepreneurs in those efforts, Mr. Allen said, in part by providing human resources services and other tools for the startups.
“We’re starting there,” Mr. Allen said. “That’s the floor, but obviously we want to dig deeper.”
“Let’s mandate, let’s target, let’s really measure ourselves and hold ourselves accountable,” he said. “Just because you make a statement … it’s not real unless you really put effort and capital toward moving the needle in those areas.”
Magarac Venture Partners plans to target one-third of its commitment to underrepresented founders, according to a news release announcing the launch.
“I wholeheartedly believe the timing is right for the region,”
said Jeff Wilke, a former Amazon executive and strategic adviser and investor at Magarac Venture Partners. “MVP’s unique commitment to diverse founders can help change the trajectory around diversity and inclusiveness not only for Pittsburgh but for the entire Midwest.”
The founders did not disclose when MVP planned to make its first investments but said the checks would range from mid-six figures to $5 million. Co-founder and partner Zach Malone said he hoped the firm would be “hitting the ground running” in the next year.
In January, MVP received $2.5 million in state funding from the Department of Community and Economic Development and the Ben Franklin Technology Development Authority.
Magarac Venture Partners is drawing on talent and expertise from Draper Triangle Ventures, another local investment firm. Mr. Malone, who was a principal at Draper, said that firm will continue to fund the companies already in its portfolio but won’t seek out new investments.
Draper and Magarac have some similarities — both focused on early state startups in the region — but the new VC firm has bigger plans to offer in-house services, like human resources, public relations and access to corporate partners for things such as beta testing.
At Draper, Mr. Malone said, the partners started thinking about what they wanted to do next and knew they wanted to start something new.
After meeting Mr. Allen a few years earlier, the other co-founders asked him to join the new firm.
“We love what we do, and we really love doing it in Pittsburgh,” Mr. Malone said. “And one of the reasons is — the primary reason is — seeing the impact it has both on the economy, diversifying the economy’s workforce and creating opportunities.”
Mr. Allen first got involved in venture capital endeavors about 10 years ago when a friend began building a company and asked for his feedback. His experience as an angel investor and venture capitalist has shown him the importance of “being strategic and creative and being able to do that really quick … and have a winning outcome,” Mr. Allen said. “Sports forces you to do that if you want to win and if you want to be successful.”
So, he said, does venture capital.
“We love what we do, and we really love doing it in Pittsburgh. And one of the reasons is — the primary reason is — seeing the impact it has both on the economy, diversifying the economy’s workforce and creating opportunities.” — Zach Malone, MVP co-founder and partner