In their own words, Hampton University alumni Calvin L. Butts, Jr. and Carrington M. Carter created private equity firm East Chop Capital in 2018 to pool “the resources of many, to accomplish much more than individuals can on their own.” As real estate developers and experienced entrepreneurs, the two men have found a way to financially support disadvantaged communities and also engage minority investors to lock in on the $170 billion global vacation rental market. In fact, they have brought on other Hampton alumni, HBCU graduates, Divine 9 and Sigma Pi Phi (Boulé) members, and more together to provide the best combined financial, educational, and social returns.
Building wealth for East Chop Capital‘s largely-minority group of investors is prioritized. For example, the firm sets itself apart from others by having investor retreats and bringing people together to learn from them.
“Our firm was created to help accredited investors build wealth and gain exposure to private investments that they may not have access to,” says Butts, Jr. “East Chop Capital’s first fund exposes our investors to the travel and hospitality industry via luxury vacation rental homes, by owning and operating homes in places like Martha’s Vineyard, Hilton Head, Gatlinburg, Orlando, and several other markets that we will expand to in 2021.”
It isn’t hard to find ambitious Black entrepreneurs, but it is especially difficult for these innovators to find funding. With ECC, the gap created by that funding disparity is combated with the access it offers to capital for not only just Black entrepreneurs, but other minority and women entrepreneurs as well. Financially, East Chop Capital is enriching disenfranchised communities, but it hasn’t been without obstacles.
“It should have been easier to raise $4 million considering we have a 6+ year proven track record, strong network, we’re investing in a thriving industry with significant tailwinds behind us…” said the founders.
During their journey to fundraise for real estate investments, the founders identified several reasons why their target audience of investors weren’t as receptive as they’d imagined. Fear, lack of education, financial literacy, and investing/business acumen were all cited as impediments. In addition, many potential investors didn’t want to part with their money due to their inability to calculate and evaluate risk, a desire for “quick wins” with unrealistic returns and limited risk, inability to find and capitalize on “off the spreadsheet” value, and finally, being too content with the status quo.
Despite the rocky start, 90 investors ultimately joined East Chop Capital’s first round of funding. Calvin Butts, Jr.’s membership on the Hampton University Board of Trustees and Carrington M. Carter’s membership in Alpha Phi Alpha Fraternity, Incorporated played a tremendous role. In fact, 20% of the investors are Hampton alumni, and several are Alphas. Now that ECC has the investors it needs, the founders have gotten to work educating their investors on private equity options they may never have come across. With ECC’s guidance and support, investors are encouraged to make their own vacation rental home purchases. The work has bridged the expertise of the founders with outreach that they truly enjoy.
“As avid travelers, Getaway Society and our vacation rental home fund gave Calvin and I the opportunity to build a business based on something we both love, which is travel,” said Carter. “As experienced entrepreneurs, we know the value of investors. Nurturing these relationships and having their support is what enabled us to build a $10 million real estate portfolio in just five years. Raising $4 million and closing this fund is a huge accomplishment for us.”
When asked about what the most exciting goals are for East Chop Capital to accomplish in 2021, Calvin Butts, Jr. didn’t hesitate to let us know.
“Building wealth for our investors, educating them on new private investment opportunities, disrupting the traditional private equity model, and having FUN,” he said.