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In this episode of From Chains to Links, Ify sits down with true renaissance man Luke Cooper—investor, successful startup founder, lawyer, professor, and more. Luke shares the big lessons he’s learned throughout his career, highlights the immense opportunity in investing in Black founders, and unpacks how cultural differences create barriers to capital for Black entrepreneurs. His incredible story makes this a conversation you want to listen to and share with a friend.
Welcome to another episode of the show. I am Ifeoma Ike, one of your co-hosts. I’m joined here by Luke Cooper. He would describe himself as an entrepreneur, father, investor, professor, and all the things. I’m going to turn it over to you because you’re already in the episode. You also live in Baltimore, but are you from Baltimore?
I’m not, but I’m for it. I’m not from Baltimore but I’m for Baltimore. Baltimore has one of the highest concentrations of Black people in the country. A lot of the political leadership looks like me. They talk about the issues that I care about. There’s a dearth of resources there that we’re still trying to piece together. That’s true of every city. My journey to Baltimore was an interesting one. I got there in 2001 after law school and I stayed. There are a lot of great things I’ve been able to achieve in my career as a result of being in Baltimore. I’m happy to get into those things in this episode.
Before we get off of Baltimore, a little birdie told me that you were cool with the Governor, Mr. Wes Moore, who used to run an organization called Robin Hood. My former boss for the City of New York runs it now. Not a lot of municipalities have that type of leadership of a Black governor but also a young Black mayor of such diversity. How do you think that impacts the way policy is shaped? Especially when we talk about entrepreneurship, what is the relationship between policymakers and what hits people on the ground?
It’s one that comes back to leadership and being able to see yourself in somebody else. The fact that you have a governor who represents all those things that you mentioned allows people to see that they can achieve those same kinds of things. It all starts with the person that you are. Aside from politics and all that stuff, if you’re not a good person or you’re not already a good leader, why would I follow you as the governor, the senator, or anything?
That’s what Wes has been. We’ve been friends for fifteen-plus years. We will have a lot of great things to talk about in this episode. When our daughter was sick, she was 4 years old and she had Stage 4 cancer. As I was building my last company, Wes would show up to my house every day and make sure we had food and all kinds of things at that time. It is really who he is when he says that he’s for the people.
I’ve heard some of your talks because we’re connected on LinkedIn. I’ve heard some shorts of the way you speak about your path. A lot of people come to you for advice about entrepreneurship and innovation. Your background in law included M&A or mergers and acquisitions. You always center your journey, like where you started and how it guides the way you move. What is that journey? What is that short, condensed version of your path? How do you link that journey to the way that you move and support entrepreneurs?
It’s a journey of tragedy to triumph. I come from the shit. I grew up in Bridgeport, Connecticut, where in the 1980s, you were either in a gang or involved in the drug trade in some way. My father couldn’t avoid it. My uncles couldn’t avoid it. My cousins couldn’t avoid it. My father did twenty years in prison. There were three things that really shaped my narrative arc. When I was 12 years old, my father went away to prison for 20 years. That same year, my uncle died. He got killed in our kitchen. He was stabbed to death. That same year, my mom also met this pilot who she was asking, “How do I get my kids to see something different? We’ve never flown anywhere.”
He was so kind to take us up. He took us up on a tiny Cessna airplane at an airport that was not far from where we grew up. That moment gave me a distance from where I grew up. I could see my housing projects where I grew up and I was like, “That’s small. That’s tiny relative to the awesomeness of the entirety of the world,” which I felt like I could see from the sky.
The practical groundedness that brought it all together was a program called NFTE, Network For Teaching Entrepreneurship. I did that as a twelve-year-old as well. I built solar-powered microwaves. I sold hot dogs in the microwave. I was fucking hungry. I made hot dogs in them and sold them. I sold microwaves. I won my science competition. I won my business plan competition.
That’s one of the key things that we don’t talk about, is how to build healthy self-esteem in these kids. We tell them to dream, like, “Go be a tech entrepreneur,” or, “Go be a lawyer. 15 years from now or 30 years from now, you’re going to be successful.” You got to teach me how to be successful now. You’ve got to teach me how to think about directing my own self-autonomy, success, some career, and something that I can apply my hand, my skill, my intellect, and my intention to. Even if it doesn’t bring me immediate wealth, it brings me some level of confidence in myself. These communities that we come from like Bridgeport or Baltimore, they’re good at one thing, and that’s destroying your confidence and destroying who you can be.
Building upon this conversation as to what it takes for young people or young-at-heart people who are on this journey to figure out how to acquire wealth, you are in this space of venture. Talk to us about, number one, who’s ripe for venture. Sometimes, it feels like that’s a mystery, but there is a reason why so much talk around entrepreneurship and innovation focuses on how much money ventures contribute to businesses and which businesses they contribute to. Unfortunately, we know that Black businesses receive a fraction of that amount. If you are in the intersection of being Black and woman, it’s even smaller. A) What’s up with that? Also, who’s ripe for a venture?
I don’t have all the answers. There’s a lot of trite responses I can make here. Everybody knows that every business is not fit for venture. That’s the reality of it. If I write a check into a company, as a VC, you’re expecting a return over some defined period of time. It’s not charity. We’ve got to get to an outcome. Depending on the kind of business that you have, is it scalable to a place where it can be either exited through IPO or strategic acquisition where a financial buyer comes in and makes a strategic investment? Those are the ways that venture capitalists and people in finance materialize the investment that they make, and that’s not true for every business. You have to figure that out.
Also, we do know the numbers. Less than 1% of all VC goes to Black entrepreneurs. I’m proud that all of my investments happen to be Black entrepreneurs. Part of it is that I know Black entrepreneurs. I know how to talk to Black entrepreneurs and help them understand not just how to be successful in business, but how to be successful with the business. Ultimately, you’ve got to think about the business like an asset that you’re building, and then what do you do with it?
Despite the fact that VC is less than 1% contributing to Black businesses, the reality is that 90% of the companies still fail. How do we get to a win? We can’t fail. I hope to build Latimer and all the things that I’m doing to a place where Black people have the right to fail because we don’t have that. You got to get to a win. I try to help my entrepreneurs think about the business almost backward so that we can define the outcome before we even get off the ground.
Part of what’s so frustrating is that 90% of businesses fail. We are not necessarily given the same grace to participate in it. There’s this conversation about which companies are right for the venture, but then there’s also this reality that part of innovation is experimentation, which means some experiments are successful and some are not. We are also, unfortunately, conditioned to respond right all the time and be successful all the time. That being said, there could be some tips and support tools for those who are curious about pursuing venture. What are some of those strategies for those who are like, “I’m not sure, but I hear about this. It would be great to have venture capital to help expand or build my business.”
It comes down to where you are with the business. Companies live in three places. You’re the product, you’re scaling, or you’re optimizing. If you confuse that, you’re going to fail and you’re going to fail faster. If you’re trying to optimize the website, the branding, and marketing at the very beginning of a business before you even have a product out the door, you’re going to fail.
VCs are applied to different stages. You don’t want to be talking to index ventures if you’re getting off the ground because they’re mostly a Series B investor. Understanding the landscape of who invests in what and why they invest in those things is critical. It is then understanding how powerful you are as an entrepreneur. It’s like basketball. If you focus on all the things that are likely to go wrong when you’re shooting the ball, you’re probably going to do those things. If you lock in on those little Vs in the net, your jump shot is going to go in every single time. You’re going to have more success. It’s the same thing. We have to realize how powerful we are and not focus on the lack of all the things that we’re not getting. That’s the reality. We know we’re not going to get those things.
There’s a pathway to being successful without necessarily engaging VCs in the way that more traditional entrepreneurs have. When I started my last company, I raised $6.5 million for that company. I wound up selling it for 11X to Assurant as my 2nd exit to a Fortune 300. When I built that company, $6.5 million sounds like a lot of money. It was the most by any Black tech entrepreneur in the state of Maryland. When I look at my cohort of competitors in that business, three White males that had founded a similar company and they’re all based in California, what multiple would you apply in terms of how much more money you think they raised than me?
Six times? Ten times?
A lot more. A lot. Keep going.
Twenty times?
Almost 70 times. They raised $455 million collectively. I beat them all. I had better gross margins. I had a better exit. The company has over $500 million in revenue and is international. If you have any issue with your phone, 20% of that traffic in terms of insurance-related claims goes through my application. Assurant is an incredible company. They backed T-Mobile and all the carriers. When you have an issue with your phone, that’s my software supporting you in the background.
We can do incredible things. This is the stuff I told Assurant when I started the company. We started the company with the name Asurvest because I was like, “These guys are over here. Asurion is over here.” I knew I was going to take a shot at the market that they couldn’t get into. If I was named similarly to them, maybe they would see me. It brought me visibility to them initially, and then ultimately, I had to do the work of executing, growing the company to 80-plus employees, 1,500 part-time workers, and a 300% revenue growth year-over-year to drive that acquisition. Even with that, I still had to take a one-way flight to Vegas to get the deal done a month before COVID. We closed August 17th, 2020.
We like to ask folks the thing that you’re like, “I can talk all day about this,” or, to put it another way, “We’re not talking enough about this.” What do you feel like we’re not talking enough about, especially when it comes to the growth of Black entrepreneurship? Our audience, a lot of them are innovators, but some of them are also funders and people who are trying to figure out, “How do we intervene?” I want to ask what your soapbox is.
There is a litany of issues that I could talk about and I think about pretty frequently. One of the things that I see emerge in all the rooms that I’m in because I’m very fortunate to be in some incredible rooms with a great diverse number of people that have different perspectives is a level of colorism and the Black community that we don’t talk about.
A lot of my work at my company, Pink Cornrows, is getting a little bit deeper past these surface conversations as to what’s happening in our institutions and our spaces. Colorism, beauty politics, and, to an extent, fatphobia. We don’t track how much decision-making is based on who enters the room. We don’t even want to talk about it.
We talked about Wes early in this, in this conversation. One of the reasons why we’re very close is because we think the same way about leaving people behind. If you leave any Black people behind, you’ve left all Black people behind, in my opinion. We do that all the time because you didn’t go to Harvard, you don’t have a JD MBA, you haven’t started a company, you don’t have money, or you don’t live at the Four Seasons. Whatever the thing is that we separate ourselves on, we do that consistently. It hurts us more than it helps us.
When I think about poor people in Baltimore, what is their path? How do you get out? When I think about the things that I had to overcome from the projects, you need incredible escape velocity to get out of that. If we’re telling these kids every single day, “You’re going to have to be lucky and get out of it because I’m not going to reach back and try to help you out of that situation,” or, “I’m not going to shed any light on how you can define the pathway so you can get out yourself,” that is never going to change. We’re going to leave people behind. We don’t talk about that enough.
It’s even true of the VC industry, which is why I don’t call myself a VC. I don’t walk around and be like, “I’m a VC.” I’ve raised a fund. I’ve got significant institutions and significant investors backing me. I have over almost $100 million of annual recurring revenue across my companies. It’s incredible, but I don’t define myself that way. A lot of VCs define themselves as, “I’m this special person that has the right to say yes or no to you in terms of receiving money.” Our role as successful Black people extends far beyond occupying that space. You’ve got to see all of the ways that we can affect our communities. We don’t talk about that enough.
If you had a wish as to what every Black family could have to ensure that they had somebody in their family who wanted to be a successful entrepreneur and that they could make it, what would be in that toolkit? What would that be in that little Lego box?
It’s a couple of things. You need courage. That’s one of the things you need because, at some point, you’re going to have to make the decision to leave some things behind. We don’t talk about that enough. You need a level of autonomy. Oftentimes, when people try to help us, especially the younger generation, the older generation tends to tell them, “You got to do it this way.” That’s not true. The world’s so different. There are so many ways to be successful and to get there. We look at what’s happening with content creation across social media platforms, blockchain, etc. There’s a lot of open space for people to be successful. We’ve got to expand our minds in ways that they can be successful.
You need a level of integrity. People say integrity means whether you are being honest. I see it as whether you are being honest with yourself. When you fail, are you communicating with yourself in a way that leads you to the understanding of why you failed or why you haven’t been able to be successful in a given situation? You need that.
I could go on. There are a bunch of things that you need in that toolkit, but the key to all of it is self-love. If you love yourself and you understand that the way you treat yourself, the way you think about yourself, the power of your own thoughts, and how you apply them to yourself can impact your life, you will think very differently about the things that we say. I used to say all the time, “I’m an old man.” I’m not old. I climbed the Camelback Mountains with a guide. I’m not old. We’re taught to self-denigrate sometimes. Those are not healthy skills. Those are the kinds of things that we need to be successful. There are a whole bunch of things I’m leaving out.
I’m surprised that capital isn’t in there.
It’s not critical at the very beginning. You’re so powerful on your own, and people don’t realize it. For my first couple of customers, it was picking up the phone and calling people. When I got someone to say, “You can come talk to me,” I was there. When I got that first customer to say, “I’ll give you a POC, a Proof Of Concept, or a pilot,” I was like, “I live here now. I want to understand everything about how you think about my product.”
Coca-Cola signed up with us as one of our first customers. I stayed in their IT department for a week. They were gracious enough to give me enough room to do all those kinds of things. That didn’t require money. It required patience, time, and relentless question-asking from a place of non-bias. I didn’t start from a place of, “My thing is amazing. How can I make it more amazing?” It was like, “My thing, I don’t know if it’s going to be good. Why is this not good? It works for you, but why won’t it work for Pepsi, Stanford University, Home Depot, Honeywell, AT&T, or the New York Police Department?” Those are other clients of ours that we ultimately acquired over the course of six years of hustling.
Our team here at Black Innovation Alliance has a membership of innovator support organizations of Black individuals and Black entrepreneurs who are dedicated to supporting other entrepreneurs to thrive and succeed. We need more of them on the ground. There’s also this thing that a lot of people don’t know that they exist.
I love what you said about leadership when we were talking about Baltimore. How important is it, do you think, to have individuals who are smart, empathetic, know their field, but also identify with the experiences of the entrepreneurs that they are supporting? How does that make a difference in the success of entrepreneurs? Unfortunately, the stats show that a lot of entrepreneurs don’t even make it to year three. They’re here to make sure that they can get to their third birthday.
It’s critical. A lot of times, we don’t understand the entrepreneurs that we’re in front of. The reason why I invest in predominantly enterprise tech Black entrepreneur Series A is because 1 in 3 of them is succeeding. Why is 1 in 3 of them succeeding? A lot of times, they come from the industry that they’re attacking. It’s constrained to a solution that works for a specific area of the enterprise, which is a much easier thing to do than the consumer.
That aside, even when I talk to them, a lot of times, we misinterpret certain signals. Especially if you don’t know Black people, you’re going to misinterpret certain things. I’ve heard from my White counterparts at times like, “That entrepreneur is awesome. It seems like a good business but he’s so cocky and arrogant,” or, “She’s so self-assured. She’s not thinking about these other things,” or, “She’s so committed to hiring people who are other women. She needs more diversity on that team.”
I’m thinking to myself a couple of things. Number one, the cockiness thing, I understand we have to project a level of confidence and self-assuredness because every single day, someone’s trying to attack that. They’re not just trying to attack it because I’m in a room with you trying to pitch my business business and trying to get you to be 50% of my Series A. We’re facing that in the elevator. We’re facing that in these small areas of pockets of life that we live where the realities of society tell us, “You’re less than.” We’ve got to combat that oftentimes with a level of over-exuberant confidence.
I tell entrepreneurs all day, “My father was in prison. He did 12 of 20 years. I come from nothing. This is what I did to overcome those things, and this is what I’ve achieved since then.” When we have that level of conversation, all the other stuff goes away and then we can talk directly about some of the challenges that they’re facing in the business. The problem with investors is they are not investing in the context to fully understand you.
There’s then in terms of how we think about teams. When I started Fixt, I applied to all the accelerators. I got into Techstars eventually, but I got rejected multiple times. The major rejection was like, “We like teams. We like you to have a team and you don’t have a team yet. It’s just you.” At the time, I was a 30-something-year-old tech entrepreneur. I had exited my first company and then I was maybe teaching or something. I can’t remember what I was doing.
I didn’t have other people who had a life like that that would allow me to say, “Come be a co-founder with me. Come join this team.” They were working hard and had full-time jobs. I couldn’t convince them to do those kinds of things. I’m a product of my community and the realities of my community. You have to think about that and how to bake that into the context of making investment decisions.
I love that when I asked you what was in this starter bag were a lot of these things that don’t require capital. That is innate to who we are as a people. We like to encapsulate that with this concept of we have the right to innovate, that innovation is our birthright. You are a General Partner at Latimer Ventures, named after one of our esteemed ancestors and innovators. I think about all the innovations and the creations that other people are benefiting not only from Black people but enslaved Black people. When you think of the term right to innovate, what comes to your mind? What does it look like? What does it feel like? How do we embody that right to innovate?
It feels like freedom to me. The right to innovate means that I can think deeply about an area of interest to me that speaks to some level of disruption of an existing way of doing things. To do that means that my mind is not occupied with whether or not my BGE bill is paid. My mind is not occupied with, “How the hell am I going to pay my kids’ tuition?” because I can’t send them to the school that’s in my community. I got to send them to another school that I got to pay for or they didn’t get into the charter school. My mind is not occupied with those things. I have the freedom to think about how to evolve other areas of opportunity. I think about it very much like that.
Black people are always innovating. There’s a famous quote by Plato, “Necessity is the mother of invention.” It’s so true. We’re constantly building things and putting things together because of the dearth of capital resources and other things that we have around us to the extent that we can put more structure around that and understand how that kind of thinking and that kind of activity is so close to building a thing that is very successful.
The reality is there are not enough of us who have followed that innovation track to a place of success or a place of outcomes that can help you understand, “This is worth your time.” As a twelve-year-old, it was worth my time to lock in, play basketball, and use basketball to get a scholarship to go to college, leverage that, go to law school, get my MBA at Babson, etc. To lock in those things that then said, “At a minimum, I can get a job anywhere I want. I can go start a consulting firm. I can go be a lawyer. I can do anything I want.” It made sense for me to do that.
We’ve got to create these new pathways that allow people to make choices that are far broader than the things that are going to take 30 years to materialize. The problem is most investors don’t have that experience. 90% of investors don’t know what an exit looks like. They’ve never had an exit themselves. They’ve never built a business themselves.
A VC business is very different from a traditional business. It’s not the same thing. It’s not even close. Fundraising is hard. It’s similar to fundraising as an entrepreneur but it’s not even close. I see these VCs parade around and they pump their chest like they’re doing something incredible. It’s the entrepreneur. It’s the man in the arena. That is the one we should be celebrating.
This is the last and final question. Give me a 30-second answer. You’re in an elevator. You overhear a Black entrepreneur saying that they may have to shut their company down. What do you say to that entrepreneur before you exit?
I’d say, “Congratulations.” You probably made that decision based on, I’m assuming, some level of understanding and data relative to customer interest. Maybe there’s a low level of conversion. That’s a good thing because you’ll need to learn that. We didn’t start here, but normally where I start is I talk about my biggest failure. A company I bought out of bankruptcy in the mid-2000s was a $20 million top-line business. I was like, “This is great.” They paid me at closing. The way I structured the deal was amazing. There were 30 locations. It was not a tech business. I had to put it back into bankruptcy.
I was getting my MBA at the time at Babson. I remember one of the professors. On the front page of the Boston Business Journal, my face was right there. He was like, “Let’s talk about this in front of the whole class.” I had to learn at that moment how to conduct press relations and investor relations. I was learning how to talk about my failure. I was learning how to go through a failure and how to devolve a business. That’s a process that is as natural as human existence.
It is very hard when we are not allowed to fail, but there is something healthy about seeing that space as a lesson and not the end. Thank you so much.
I want to say thank you for having me on to share my thoughts and spend this time with you. I hope this is valuable to people who are reading.
It is super valuable. You all should follow Luke. You should find him on LinkedIn.
They can also find me on Instagram. Instagram is probably easier.
What’s your Instagram handle?
It’s my name, @Luke_Cooper81.
Thank you, Luke. Thank you all for joining us for this episode of the show where we went through conversations about journeying, success, what’s right for the formation of your business, and also a healthy way of looking at failure. We hope that you continue this conversation with us. Follow us on our handle, @BuildWith BIA. We look forward to seeing you next time. Take care.
Luke Cooper is a founder, M&A lawyer and tech investor. After taking his first company to a 27X exit in 2008 (CACI / Paradigm Holdings), his second company, a retail food service business went bankrupt in 2011.
He subsequently founded Fixt, his third company, in 2013, growing it 300% YoY and raising $6.5M in venture before successfully exiting to Assurant in 2020. Today, the software handles roughly 20% of all mobile related insurance claims in the U.S. and Luke is the General Partner of Latimer Ventures which has invested in AI Squared among other enterprise AI companies.
With a wide range of interests, he enjoys yoga, meditation, hiking, and hoops with his teenagers.
