One to watch: Debut Capital’s Pilar Johnson works to augment funding for overlooked founders

There is a moment from around April 2021 that Pilar Johnson thinks about often.

She was scared and nervous. The Houston native grew up in a low-income neighborhood and had no experience in venture capital. As she waded into the industry, imposter syndrome frequently crept in. Then, she and her team at Debut Capital raised a million dollars in early 2021. That funding milestone — crossed in three months, no less — quieted her nerves. For now, at least.

“I felt like ‘OK, we are really doing this,’” she told TechCrunch. “People are connecting to our mission to disrupt the VC space by prioritizing the underrepresented. It was a very special moment for me.”

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Johnson’s investing thesis is to support the next generation of diverse founders seeking to address marginalized communities’ needs. As the daughter of a Mexican mother and African American father, Johnson is part of an increasing number of minority investors working to augment funding for overlooked founders.

She told TechCrunch that she lets empathy lead her investment approach, a method likely welcomed by diverse founders often accustomed to VCs exhibiting the opposite. Her notable investments include the popular beauty brand Ami Colé, the social gathering spot Ethel’s Club and wellness company Golde.

Johnson lacks roots in the Bay Area, but that’s starting to matter less than it did in the past. A decade ago, Johnson didn’t foresee a career in helping make venture capital more equitable. But outside perspectives like hers may help shift where money is allocated in the industry.

“If anybody is interested in being an investor and doesn’t think they have the skills, I would say, don’t believe that. You can completely become an investor, and it’s needed.” Pilar Johnson

Safe to say, she’s one to watch.

“We can [make] space for these underrepresented founders to be able to come to us so that they can raise more capital,” she said. “That’s the goal of Debut existing.”

Figuring things out

After studying radio and film at the University of Austin, Texas, Johnson moved to New York without knowing a soul. She said her dream was to live in New York. Growing up in Texas, movies allowed her to escape from her surroundings; now was time to take that chance in real life.

“For someone growing up in the hood, whose whole family still lives only in Texas, that was an insane dream, and many people didn’t understand it,” she said. “Still, I never let go of it.”

Her first job was as a hotel receptionist, and she later found lodging in Harlem. She recalled that those first two years were the hardest, saying there were a few days she would sit in her apartment, sobbing alone.

“But Harlem had an energy that I found comfort in,” she added. “Being in a predominantly Black neighborhood gave me a sense of community and peace while figuring things out.”

One day, while scrolling through Craigslist, Johnson found a position as an operations manager at a coworking space. She got the job of managing a floor where small-business owners convened. That job exposed her to the concept of entrepreneurship, and soon, she started studying how founders scaled their businesses.

Next, she worked in operations at the software company Prolific Interactive (later acquired by WeWork), where she met Bobak Emamian, who would one day help her launch Debut Capital. At Prolific, they worked on DEI initiatives, and in her spare time, Johnson attended conferences like Afrotech and Black in Tech, further immersing herself in the world of startups.

“I started meeting a lot of underrepresented founders that had these big visions and solid strategies but were all struggling to raise capital and started looking into why that is, and that was my introduction to venture capital,” she said. “I knew whatever I did next, I wanted to dedicate my time and effort to support Black founders and start my own thing.”

After Prolific sold to WeWork in the summer of 2019, she turned to Emamian with the idea of starting a fund to specifically back diverse founders. Almost immediately, he said yes.

“When we were working on the M&A transaction, and the process was very taxing, Pilar was still the same person as if we had no pressure,” Emamian told TechCrunch. “In moments like that, it was clear that she’d be a great business partner.”

By January 2020, the duo used their own money to launch Debut Capital, starting by cutting small checks to startups. They launched their investment vehicle just in time for the pandemic to ravage minority businesses and are accelerating their fund just as another recession looms.

Strategies she works by

Johnson said those early days in New York City shaped how she approaches investing.

She told TechCrunch that she learned to trust her gut to stay determined and not be led astray by those who don’t understand her vision or perspective.

“Do you know what’s humbling? Getting lost in NYC, over and over and over again,” she said. “Ego does nothing but hold you back.”

Debut Capital focuses on pre-seed rounds to connect with founders early and enter deals sooner. In January 2021, Johnson and Emamian started raising a $5 million prototype fund — an experience Johnson called “scary” since it pushed her out of her comfort zone.

They tried reaching out to larger institutional funds, most of whom told them the $5 million ask was too small. To gain the funds, the duo pivoted to raising capital from individuals and so far has made 27 investments.

“It’s so rare, as a founder and woman of color, to have someone on the other side of the table who truly understands your entrepreneurial journey and can advocate for your strategic growth.” Diarrha N’Diaye-Mbaye

“It was a big lesson for me in learning how to pitch myself, our funds, [how to] find potential investors to try and get in,” she continued. “I learned to look at when people tell me no, it’s no for now. I feel confident that some of those people that passed will become LPs in this next [fund].”

Debut Capital specifically looks for diverse founders to create products that target underserved markets — having good overall product design quality and user experience is a bonus, even more so when a founder is seeking to solve a problem authentic to their own experience, Johnson said.

“It’s important for founders to understand the market and what the differentiator is they’re bringing to the industry,” she continued. “Whether you’re a VC or founder, it’s important for all of us to remember this isn’t easy. Especially these days, when we’re dealing with external chaos not in our control and still expected to show up for work. We are all going through it in some ways, so we need to keep that in mind.”

Diarrha N’Diaye-Mbaye, the founder of Ami Colé, remembered that when she first met Johnson, the duo spent most of the time brainstorming about the beauty brand’s vision rather than a back-and-forth on why the company should exist. N’Diaye-Mbaye said Debut’s early support allowed her to attract other investors to the company, which specializes in creating makeup for dark skin.

“It’s so rare, as a founder and woman of color, to have someone on the other side of the table who truly understands your entrepreneurial journey and can advocate for your strategic growth,” N’Diaye-Mbaye told TechCrunch. “Pilar is a rare unicorn.”

Golde co-founder Trinity Mouzon Wofford added to that. “Pilar is building the future of funding,” she told TechCrunch. Brittany Chavez, the founder of ShopLatinx, said Johnson was the first VC to invest in her company and bet on her as a founder.

“Her identity as both Black and Latinx allows her to empathize with my nuanced background and struggles as a founder and for her to understand our Latinx marketing strategy keenly,” Chavez told TechCrunch.

It’s business as usual for right now, however. Debut’s prioritization of backing minority founders means this economic downturn requires little strategy adjustment, providing a lifeline to some founders already impacted by the investor pullback. Johnson’s goal is to continue providing space and opportunities for diverse founders, a much-needed adjustment as the fight for equitable economic growth continues.

“If anybody is interested in being an investor and doesn’t think they have the skills, I would say, don’t believe that. You can completely become an investor, and it’s needed,” she said. “We’re already prepping for our next raise, which we hope to be $50 million.”