Mike Kelly (MBA ’22) talks with Jamal Cherry (MBA ’21) and Mikal Lewis (MBA ’20), co-founders of Halo, about democratizing investing and entrepreneurship. Learn more about Halo at investwithhalo.com.
Jamal Cherry and Mikal Lewis had never met before arriving at HBS, but they had followed a strikingly similar path. Both grew up in the South, both were basketball fanatics, and both worked in the oil and gas industry prior to HBS. But, what really brought them together was their shared passion for creating opportunities in entrepreneurship and investing across racial and socioeconomic boundaries.
When Lewis first came to HBS, he jumped into brainstorming how to address the issue. Similarly, during his EC year, Cherry set out to better understand the factors underlying the issue by surveying MBA students’ thoughts around entrepreneurship. “I spoke with a few professors about the survey results and started getting feedback on a couple ideas I thought would be helpful to the community,” says Cherry. “Coincidentally, Mikal had spoken to many of the same professors, and they all recommended I reach out to him.”
From that point, they started turning their common passion into a company. Now, Cherry and Lewis are preparing to launch Halo, an equity crowdfunding platform connecting HBS entrepreneurs to the wider HBS community.
Unlike some major crowdfunding platforms—think AngelList, Halo requires investors to be HBS alumni. Furthermore, the minimum funding threshold for Halo is only $2,500—far less daunting than many private investment groups—and there is no maximum investment. Given these thresholds, Cherry and Lewis believe that Halo will democratize investor access and give more people in the HBS Community the ability to impactfully invest in entrepreneurs and solutions they believe in.
Long-term, Cherry and Lewis envision Halo as a vibrant ecosystem built to support entrepreneurs and investors in the HBS community through capital and connection. “Being a part of the HBS network, we have seen how strong and supportive the alumni community is to one another and current students,” says Lewis. “We view Halo as another way for us to support each other in a very natural way. Both sides want more access to the other in an investment context, and that is what we hope to facilitate.”
Launching Halo now, during a pandemic, also could be a stroke of strategic genius. Despite the state of the world, now is arguably one of the best times to take the leap into entrepreneurship, and early-stage investors are also well-positioned to profit. New markets and ways of life are opening up, investors and customers are welcoming unconventional ideas, and historically, startups launched during a recession have better-than-average performance. During the last recession, in 2007 alone, 29 business school unicorns were founded—more than any other year.
As another compelling data point, HBS entrepreneurs have a particularly strong track record: since 2006, HBS entrepreneurs have raised ~$70B in capital and have on average produced 1.4 unicorns per year. Lewis expresses a refreshing sense of optimism: “Given the strong performance of HBS entrepreneurs (founding companies like Peloton, Hulu, Grab, Blue Apron and Cloudflare to name a few), we believe investing in our community has been and will continue to be an extremely attractive proposition, especially in the current environment.”
While Halo is creating a space for more traditional startup entrepreneurs, it also generates more opportunities for search fund entrepreneurs. Search funds continue to be an increasingly popular alternative route to entrepreneurship for MBA graduates. The concept of acquiring a small, cash-flowing business and stepping in as a CEO is an attractive opportunity for entrepreneurs and investors alike. 
“As an asset class, search funds have historically been closed to you unless you are a former searcher or serial search fund investor,” explains Cherry. “Historically, these investments have in aggregate produced 32.6 percent IRR and 5.5x MOIC, which is no indication of future performance, but we are really excited about the opportunity to open up this growing asset class to non-traditional investors.”
Entrepreneurship, of course, still has its opportunity costs, even for MBA students. Why risk total failure, no income, no investment, little to show besides owning the title “failed entrepreneur”, when you could buy a brand-new car just with the signing bonus from a lucrative consulting or finance offer?
HBS entrepreneurs tend to have a laundry list of well-argued reasons for turning down that new car to start something new, but one of the most provocative arguments I have heard is what Jeff Bezos has coined the “regret minimization framework.” The idea is to imagine yourself 50 years from now and to reflect on the regrets you might have. The answer for each person may be different, but for Bezos—and for many HBS entrepreneurs—the answer tends not to be regretting failure, but rather regretting not trying.
Given their passion for increasing equity within entrepreneurship and investing, the regret of not trying is even more pointed for Cherry and Lewis. Only 3 percent of the people making investment decisions are Black and only 21 percent are women, according to data from the National Venture Capital Association. On the other side of the table, Black founders and women respectively receive less than 1 percent and 8 percent of Venture Capital funding.
“Our thesis is that by streamlining the investment process and reducing minimum investment amounts, we will see participation from a more diverse set of accredited investors. We have seen anecdotal evidence that when you diversify capital allocator profiles, you see more capital flow to diverse founders. Additionally, based on survey data, we believe that demystifying and streamlining the fundraising process will encourage more diverse founders from HBS to pursue entrepreneurship,” says Cherry. “We are already finding that high-quality entrepreneurs associated with the Rock Center Accelerator and Harvard Innovation Lab are drawn to Halo in part because they align with the mission.”
Fueled by their passion, and by wanting to try, Cherry and Lewis have already gained momentum with Halo. HBS professors, including Paul Gompers, have been informally advising them. They have already met with more than 25 interested HBS entrepreneurs seeking up to ~$3 million in funding in the next 12 months. On the investor side, they are in communication with accredited investors from HBS classes ranging from 1983 to 2020. While “accredited investors” generally covers people who meet certain income or wealth thresholds, work in the buy-side, or have certain financial certifications, this definition may broaden over time, allowing Halo to cast an even wider net among HBS alumni.
As they prepare for their launch in late February, Cherry and Lewis have a practical piece of advice for aspiring HBS founders seeking co-founders. “Mission alignment has played a huge role in our ability to move this from idea to launch with conviction and speed through the pivots and setbacks,” shares Cherry. “At the end of the day, we both agree on what success fundamentally looks like for us and for Halo. Every decision point eventually comes straight back to our mission which helps us align and make faster decisions.” Entrepreneurship is a path filled with setbacks, and the best way to push through the hard times is to believe so deeply in the mission that you will do almost anything to bring the company to life. And, even if the company fails, you will not regret the failure, but you would likely have regretted never having tried.
An often quoted statistic at HBS is that by 30 years after graduation, roughly 40 percent of alumni will have founded their own business. What drives so many of us to take the leap into the unknown? Maybe, at that point, we have the resources to take on more risk. Maybe, we grow bored with the routine lifestyle of a corporate job. In all likelihood, it is a combination of these factors. But maybe, we also pause just long enough to hear the whispers of an answer to the question we all know well: what is it you plan to do with your one wild and precious life?
Disclosure Statement: Halo is not regulated as either a broker-dealer and is not a member of FINRA. Halo does not make investment recommendations and no communication in any medium should be construed as a recommendation for any security offered on or off the investment platform. Any historical returns or unrealized returns may not reflect actual returns or future performance. Investors must be able to afford the loss of their entire investment.
Mike Kelly (MBA ’22) grew up outside Pittsburgh, PA. Prior to HBS, he worked for five years in engineering, product strategy, and program management at Ford, where his work spanned both automotive and the future of mobility. He graduated from the University of Notre Dame with a Mechanical Engineering degree, and he played trumpet in the marching band. His favorite cereal is Reese’s Puffs, which you can usually find him chowing down on Zoom.
