Kevin Durant Is Investing In A Major Venture Capital Firm To Bring More Diversity To Tech

Fresh off his second consecutive NBA championship and Finals MVP award, Kevin Durant is continuing to build an increasingly serious business empire away from basketball.

Over the last two years, Durant and longtime business partner Rich Kleiman have turned the Durant Company into an active investment operation, backing dozens of startups while taking advantage of Durant's proximity to Silicon Valley as a member of the Golden State Warriors.

Now Durant is joining an impressive collection of entertainers, athletes and business leaders in a new venture capital fund from Andreessen Horowitz that hopes to address one of the technology industry's most persistent problems: its lack of diversity.

The new Cultural Leadership Fund has raised around $15 million from Black cultural and business leaders including Durant, Will Smith and Jada Pinkett Smith, Sean "Diddy" Combs, Shonda Rhimes, Quincy Jones, Chance the Rapper, Nas, producer Will Packer and Essence Ventures founder Richelieu Dennis.

Andreessen Horowitz partner Chris Lyons is leading the initiative.

Ezra Shaw/Getty Images

How The Cultural Leadership Fund Works

The Cultural Leadership Fund isn't simply a charity or corporate diversity program. Durant and the other participants are actual investors.

They are contributing capital as limited partners, and Andreessen Horowitz will use that money to make investments alongside its existing venture portfolio. If those investments increase in value, Durant and his fellow investors can make money just like limited partners in a traditional venture fund.

The unusual part is what Andreessen Horowitz plans to do with its own share of the economics.

Venture capital firms typically charge investors annual management fees and receive a percentage of the profits generated by successful investments, known as carried interest. Andreessen Horowitz says the management fees and carried interest it would normally earn from the Cultural Leadership Fund will instead be donated to nonprofits working to increase the number of African Americans entering the technology industry.

So the fund is designed to create opportunities on several levels. Its investors can participate financially in Silicon Valley's growth, startups gain access to highly influential cultural figures, and nonprofit organizations receive funding to help build a more diverse pipeline of future technology workers and entrepreneurs.

Why Silicon Valley Wants Kevin Durant

Andreessen Horowitz isn't bringing celebrities into the fund simply because they can write checks.

The firm's portfolio companies increasingly sell products directly to consumers, and people like Durant, Will Smith, Shonda Rhimes and Diddy understand audiences and culture in ways that traditional venture capitalists may not.

A young company with Kevin Durant as an investor potentially gains access to much more than his money. Durant has relationships with athletes, entertainers, major brands and millions of fans around the world. The same principle applies to the other participants, each of whom brings a network and area of expertise that could be useful to a growing company.

That creates an interesting exchange. Silicon Valley gives cultural leaders access to investment opportunities that historically circulated within relatively small networks of venture capitalists. In return, those leaders can help technology companies better understand and reach the enormous communities their products are supposed to serve.

Silicon Valley's Diversity Problem

The fund comes after years of criticism over the technology industry's demographics.

Major companies including Google and Facebook have released diversity reports and announced programs designed to recruit more workers from underrepresented communities, but progress has generally been slow. Black employees remain particularly underrepresented in technical positions and leadership roles.

Earlier this year, members of the Congressional Black Caucus visited Silicon Valley and criticized several major technology companies for failing to make meaningful progress despite years of promises.

The problem goes beyond employment. Venture capital itself remains heavily dependent on personal networks. Founders who lack connections to wealthy investors and established technology executives can struggle to get meetings, much less financing.

The Cultural Leadership Fund is attempting to attack that problem from another direction by putting Black cultural and business leaders directly into the venture capital ecosystem rather than merely asking technology companies to improve their hiring statistics.

Kevin Durant Is Already Deep Into Venture Capital

For Durant, this isn't his first Silicon Valley experiment.

Durant and Kleiman created the Durant Company around the time Kevin left Oklahoma City for Golden State in 2016. In only two years, they have assembled a portfolio containing more than 30 investments, making Durant one of the NBA's most active technology investors.

Among the companies he has backed are delivery startup Postmates and micro-investing platform Acorns. Durant and Kleiman have also developed Thirty Five Media, which produces sports and entertainment content and has worked with companies including YouTube.

Durant's move to Northern California has given the pair unusually direct access to the technology world. Venture capitalists and startup founders routinely attend Warriors games, allowing relationships that might otherwise require months of introductions to develop naturally.

Few people represent that world better than Marc Andreessen. Andreessen Horowitz, which he co-founded with Ben Horowitz in 2009, has become one of Silicon Valley's most influential venture firms, backing companies including Facebook, Airbnb, Lyft, Coinbase and Instacart.

Durant isn't merely attaching his name to the Cultural Leadership Fund. The investment fits directly into a business strategy he and Kleiman have already been pursuing aggressively.

A Different Kind Of Assist

A $15 million venture fund isn't going to transform Silicon Valley by itself. Andreessen Horowitz manages billions of dollars, while the broader venture capital industry deploys tens of billions every year.

But the structure of the Cultural Leadership Fund makes it interesting.

Instead of treating diversity solely as philanthropy, the fund gives successful Black entertainers, athletes and executives an ownership stake in technology companies while connecting those startups to people who wield enormous cultural influence. At the same time, Andreessen Horowitz is giving up the fees and profit participation it would ordinarily collect and directing that money toward organizations trying to increase Black participation in technology.

At just 29 years old, Durant has two NBA championships, two Finals MVP awards and an investment portfolio already containing more than 30 companies. His ambitions beyond basketball are becoming increasingly difficult to miss.

Durant has spent the last two years using his access to Silicon Valley to create opportunities for himself.

With the Cultural Leadership Fund, he's trying to make sure some of that access gets passed along.