How Quality Control Music Invests in Startups

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Dazayah Walker is the Head of Investments at Quality Control Music, the label behind today’s most trendsetting artists like Lil Baby and Migos, Dazayah. She maintains QC’s investment portfolio, particularly within the startup space, which spans well beyond just music and entertainment. Being a 23-year-old venture capitalist is difficult as is. Now tack on being female and black? “It’s been a journey”, as Dazayah Walker shares with us in this episode of the Trapital podcast.

Dazayah’s path to becoming a Venture Capitalist is as unorthodox as you’ll find in the venture capital world, but she’s stuck to the same principles that got her that opportunity to begin with — seeking out mentors, surrounding herself with a supportive community, and taking the learning process day-by-day. Before overseeing QC’s investments, Dazayah worked on the music side for the label. She began as an intern for QC, and worked her way through the ranks at the same time QC was taking the music industry by storm.

Not only is Dazayah breaking down doors, but she’s also trying to leave them open for future aspiring VC’s with similar unconventional backgrounds. As Dazayah continues to learn the ins and outs of venture capital, she plans on creating initiatives to educate others about the world she operates in.

To hear Dazayah’s future ambitions, plus everything else we covered in the show, reference the video chapters below:

[0:00] Dazayah’s goals with her role

[2:13] Dazayah’s Transition Into Venture Capital

[5:29] What Is QC’s Investment Thesis?

[6:35] The Pros And Cons Of Involving QC Artists Into Investments

[9:16] What Does Dazayah Look For In A Company Before Investing?

[10:49] QC Investing Beyond Just Music and Entertainment

[10:45] Dazayah’s particular interest in Fintech

[12:56] QC’s and Dazayah’s Involvement With Techstars

[14:48] The Challenge Dazayah Faced Breaking Into The VC World

[16:04] What Programs Have Helped Dazayah Adjust To The VC World?

[17:40] What Was Behind QC’s Investment Into Riff?

[18:50] QC’s Investment Portfolio Explained

[20:00] “You Can Do This Too And This Is How”

[23:30] Music-Wise, What Is Dazayah Most Excited About QC In Near Future?

Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSS

Host: Dan Runcie, @RuncieDan, trapital.co

Guest: Dazayah Walker, @dazayah

Trapital is home for the business of hip-hop. Gain the latest insights from hip-hop’s biggest players by reading Trapital’s free weekly memo.

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Transcript

Transcription – Trapital #116

Dazayah Walker  00:00

Finding success here and having a strong track record and proven portfolio and then be able to use that as a way to show people you can do this too, and this is how, let me show you how, let me be that person to help you understand and be a part of it.

Dan Runcie  00:23

Hey, welcome to the Trapital Podcast. I’m your host and the founder of Trapital, Dan Runcie. This podcast is your place to gain insights from executives in music, media, entertainment, and more, who are taking hip hop culture to the next level. Today’s episode is with Dazayah Walker, Head of Investments and the Operations Manager at Quality Control Music. This is an exciting role to have at a time like this. QC has been on a run the past few years and has really shaped what hip hop is sounded like, from artists like Migos, to City Girls, to Lil Baby, and then on the other side of this hip hop investing activity is growing faster than ever, and we’re seeing more and more artists getting ICAP tables, getting involved with deals. So it’s a really exciting time to have a role like this. I talked with Dazayah about what it’s been like from her perspective, and representing and getting roles not just for QC as a firm, but for the artists that they represent, and how she has navigated the record label growing as fast as it has the past few years to venture capital landscape and how she’s been able to navigate that and a whole lot more. Had a great conversation with her. Hope you enjoy it. Here’s my chat with Dazayah Walker. All right, we got Dazayah Walker here today, who is the Head of Investments at Quality Control Music. Dazayah, welcome to the pod.

Dazayah Walker  01:42

Hello, I’m so happy to be here. Super excited. Let’s do this.

Dan Runcie  01:46

Yeah, so one of the things that stuck out to me about you and your career, you had started as an intern at QC, and you’ve risen up the ranks there as the label as not just a record label, but as an entertainment company. And now with a corporate venture arm or brollies just continue to grow and expand.

Dazayah Walker  02:05

Yes.

Dan Runcie  02:06

Walk me through the steps. What was it like from when you started to where it is now, just with how fast things have been growing there?

Dazayah Walker  02:13

Yeah, it’s been a great journey and experience for me, with this being my first job. There’s been a lot of learning curves with that in itself. But it was definitely a privilege and a great opportunity to be able to see the growth of QC, because we’ve expanded in so many different ways since I started as an intern, and being able to be a part of that, witness that, learn from that I couldn’t be in a better position.

Dan Runcie  02:36

And is there anything specific with the role that you have now that had drawn you to it or something specifically because I know you had started a bit more focused on operations? And then now we’re obviously seeing much more on the investment side. But was there something about that opportunity that pulled you in?

Dazayah Walker  02:52

Yes, so getting to this side was definitely a path of, I would say divine ordering because me entering the opportunity at QC. Starting as an intern, I thought I just wanted to do music, work my way up to being a music industry executive. But as I became more in the groove, and learning more of the things that I like, things that I don’t like, I really had to find my place. And when I discovered what venture capital was, because when I was at Spelman, I was an economics major. So I kind of have like, I’ve always been surrounded by that when I was in school, just the finance, track and everything like that. But me venturing into music was me following my passion or what I thought was my passion at that time. So when I discovered what venture capital was, it was actually kind of crazy to me that I hadn’t learned about it when I was in school, considering the impact that Morehouse, our brother institution has, as far as their representation of black men in venture capital. It was just crazy to me that I was at an institution right across the street and had no idea that this industry even existed. So when I stumbled across VC and began learning about it, I just saw the opportunity for artists, athletes and entertainers to be involved and was curious as to why more people that look like us aren’t represented in those spaces. So that’s when you know, my research and dedication to being in this position really started. And then from there, you know, bringing that idea and really helped become what we’re building today with quality Ventures has been amazing.

Dan Runcie  04:26

So talk to me about that piece about bringing this idea together. So was it you seeing the opportunity and seeing how much of a disconnect there was and then going into the team at QC to be like, hey, there’s something big here and we have talent here that could be just as influential.

Dazayah Walker  04:42

Yes. So it was a moment where I had to really think about what legacy do I want to have, what value do I want to add, and being in this position, you know, I built relationships with, you know, our entire team. So I was somebody that, you know, they trusted and when I, you know, have something to say they were listening, and you know, they embraced any idea or anything that I had. So by, you know, telling them and showing them, you know, the opportunity that exists for us in this space, it was well-received. And now here we are deploying capital, making investments. And my goal is really for us to have that same little level of influence and impact that we have in music in the venture capital space, as well. So having that same strong presence and footprint in that industry, too.

Dan Runcie  05:29

So what does that thesis look like? What does that investment goal look like for QC specifically, because I’m sure it’s more than just the financial aspect? There’s the pitch and how it can help intersect and how the music itself and everything you’re doing on the media and entertainment side can help with the venture opportunity too?

Dazayah Walker  05:48

Absolutely, so our biggest thing is adding value, adding strategic value. So for us being in a unique position of being that entity that defines culture and creates culture, I feel like we’re uniquely positioned to leverage our artists and our athletes to really help grow these companies that we see as potential winners.

Dan Runcie  06:11

And are there ever any specific moments where folks are reaching out? And there’s, of course, the interest in having QC on the cap table, but then people reaching out about specific artists, whether it’s like, oh, well, we want to have City Girls on here, specifically, or we want to be able to have a Lil Baby on here? How has it been with that piece of advice, I’m sure that could be an interesting discussion, especially from your landscape with all of that.

Dazayah Walker  06:35

So that happens a lot as well. And it all boils down to seeing if the artist even aligns with what you’re building. Because when you’re working with early stage, or pre-seed stage companies, that may be the very first version of whatever they’re building, there’s so many more iterations yet to happen. And as the entity continues to grow, and transform, the artists that they thought may be ideal for what they’re building as a representation may not be as they continue to, you know, redefine what it is that they’re building. So yes, you know, we get opportunities all the time for our artists, which was another reason why, like the opportunity to bridge the gap and intersect music and technology was so evident and clear to me, you know, to pursue and to do, because those opportunities and those deals are always flowing. But really being in a position being someone that knows how to evaluate those opportunities, and educate, you know, the artist, or the athlete or whoever may be to let them know, like, this is why this is a good, you know, opportunity or something to look at and this is why it isn’t.

Dan Runcie  07:41

I also imagine that there’s likely people that may be reaching out because they may want just the exposure that may come right, they may be like, “Oh, well, if y’all invest can Lil Baby, give us a shout out for the product on some song. And I could see there being you know, some pushback on that, because obviously, you all would see the opportunity as being greater than that.” But how was that piece of it been? Because I know, I’ve heard similar from folks in the entertainment space when they’re looking to have not just celebrities, but artists specifically on the cap table.

Dazayah Walker  08:13

Well, personally, I don’t think a founder having that mindset is necessarily wrong because in the VC ecosystem now, capital isn’t an issue. So getting the money having people to, you know, write a check for you isn’t the hard part. It’s actually once you get that money, how can you use that, you know, relationship that you now have to help build your company or grow whatever it is that you’re building. So I feel like a founder having that perspective isn’t necessarily a bad thing, because you want to have partners that can help you grow your company and add value in different ways. So if there is an opportunity for an artist, if it’s something that they really love, you know, to be an ambassador for it, and to push it.

Dan Runcie  08:58

So when you’re evaluating startups, and when you’re evaluating artists, or not artists, founders, specifically, what are you looking for, like, what is your criteria set? And what are those things whether it’s tangible or intangible that you’re looking for that clears that over the hurdle to be like, Yes, this is what we want to invest in?

Dazayah Walker  09:16

So I would break it down into three things. The first thing I would say, what is the problem that you’re trying to solve? Is this a problem that is unique to you and from like, or where you’re from? Or is this a problem that is affecting a wide market of people? So first, understanding the problem, and if the solution that they’re attempting to build is a solution for the greater good? The second thing is really understanding their team, like, who do you have helping you build this? What people do need a position to help you build it? And like how much traction Have you gotten so far. And the first, and I think the most important thing is the founder, when you’re working with companies that are likely pre-revenue, maybe they have a very, very early version of their product, you’re placing a bet on the founder. So knowing the type of person to look for, or the type of characteristics to look for in a founder, I think are very important. Somebody that is determined, somebody that is all in like willing to make the investment themselves because how do you expect me or someone to make an investment when you haven’t even, you know, fully invested yourself in this in this idea? So I will say those are the top three things that I look at when I meet with founders and new companies.

Dan Runcie  10:33

That makes sense. And then in terms of the industries themselves, is there any type of sector that you’re particularly looking for, or any other type of industry that you feel is most aligned with what QC or Quality Ventures is after?

Dazayah Walker  10:49

Yeah, so as a company, Quality Ventures isn’t looking in specific industries and verticals. I know a lot of people think since you know, we have Quality Control Music, we’re looking strictly at music-based companies and startups. And that’s not necessarily true. Like I said, our whole thesis is really about us being in a position to add value. But for me, specifically, I really like looking at fintech companies, I think that Fintech is the next market to really boom so paying attention to the trends, paying attention to what people are saying, paying attention to what problems are they need to be solved. So for me personally, the industry of interest to me is fintech.

Dan Runcie  11:28

And what is it about fintech specifically that sticks out to you or interest you?

Dazayah Walker  11:32

I like it because I think it’s time for a change as far as how money is viewed, how money is moved. Like I know, you probably have seen how crypto, everybody’s talking about crypto, and preparation for the metaverse, like, all of those things are happening strategically. And by being aware of what’s happening in fintech, you know how the money is moving what the future of money and finances look like. So that you can kind of put yourself in position to not only be educated about it but know how to make your next move when it comes to what the future looks like.

Dan Runcie  12:05

Right? That makes sense. And I think especially when you look more broadly at the definition of FinTech, and you look at companies like Coinbase, and you look at some of the partnerships that they’ve had with organizations like the NBA, or even the United Masters, there’s clearly an alignment where even if it isn’t in the quote-unquote, entertainment landscape, this touches so much. So that’s why I think you see so many artists and companies in this space that want to tap into all these areas, even if they’re not necessarily what you may think is in that industry.

Dazayah Walker  12:38

Exactly.

Dan Runcie  12:39

And with that, I mean, for you, I know that another partnership that QC has, at least on the investment side, from what I’ve seen is in Techstars Music, and I saw that you’re a mentor there and that QC more broadly as a partner. So how has that experience been?

Dazayah Walker  12:56

It’s been amazing. Just the Techstars music team in general have been a great like resource for us. So when the program, when we joined the program last year, we kind of were thrown in when things were already in motion, like they were already preparing for demo day, the companies in the cohort were already selected. But now I was able to be a part of the process of you know, picking the companies for the new cohort, being a part of like all the member meetings and the mentor meetings. So with me still being in a very early part of my career, I’m always looking for opportunities to learn and experience new things. And Techstars has been an amazing teacher for me. Just seeing things from that perspective, working with an accelerator, like working with founders and seeing them in that perspective has definitely helped me I feel like become a better venture capitalist, just seeing things from different angles and different perspectives. Because honestly, once I made the decision to transition into venture capital, I was a little discouraged because I am entering it through a very unconventional background. So any opportunity that I have to learn and observe and ask questions, it’s been amazing, because it’s been it’s been a rough journey for me to be able to confidently say, this is what I’m doing. I know that I’m uniquely qualified to do that thing, and, you know, moving like that. So it’s been a journey, Dan, I tell you,

Dan Runcie  14:22

I could imagine I mean, there are not many people that look like you that are doing this type of work. And when you compound that with what people already may assume is standard for what they expect for people working at, the type of company you work at that just compounds it further. I mean, what are some of the things that you had done early on to try to, you know, either break through that or try to navigate that the best, and I could only imagine how tough that could be at times.

Dazayah Walker  14:50

Yeah, I would definitely say reaching out to people asking questions, really being a sponge, absorbing as much information and knowledge as I can. Because making this pivot into an entire new industry is scary, because like, I built my network in my name and music. And now, I feel like making a career shift almost as still such an early point in my career was very, very scary. But some of those same like tactics and things that I did to be successful or reach the level of success that I had in music, I applied those same principles to me, you know, trying to achieve a level of success in venture capital. So really finding mentors and finding a community to learn from to be supported by and to be supportive of, and just taking things day by day. And knowing that every day is an opportunity to learn something new, and, you know, not taking opportunity for granted because I know I’m in a very unique and special position. And I’m grateful for the position that I’m in. So really showing people why I, you know, I’m deserving of the role that I’ve been placed in.

Dan Runcie  16:04

Definitely. And I also think, too, whether it’s programs like HBCU, VC, and obviously, you representing that being an alum from HBCU them recognizing that this is a pipeline that not only is a challenge, but how can they help bridge that gap? And, you know, are there any specific organizations, whether it’s like that or others that have been helpful for you as you’ve gone along this path?

Dazayah Walker  16:26

Yeah, so definitely HBCU BC, considering I was a fellow, that was an amazing program with amazing teachers, and I’ve really been able to, like tap into that community, which has been amazing. Another community that I’m really grateful for is Black VC and the Black Venture Capital Consortium, both of those organizations have been super supportive and welcoming of me. And it’s things like that, that are very important for not even just me being a young black woman, but you know, being a person of color trying to enter another space that is male-dominated, white-male-dominated. So just having that comfort of knowing that there are people that support you and want to uplift you and see you do amazing things.

Dan Runcie  17:11

Yeah, definitely. I could see that for sure. I could see that. Well. Let’s circle back quick. I do want to talk about some of the public investments that you’ve made. I know that Riff was one of them, that you all were in, was that one of them? Riff, yes. Okay. So what was the process like for that investment? What was it that attracted you about that company?

Dazayah Walker  17:31

Well, Riff isn’t one that I necessarily, like found from the beginning and worked all the way to the point where we cut the check. But Riff has been an amazing company in our portfolio, I’m super excited for what they’re building, just seeing them being disruptive and combining elements that we as consumers love, I’m really excited for the journey of Riff and being able to be a great partner to them, and just seeing them grow. And you know, being along that journey in that ride with them, but they’re definitely building something amazing. And I’m excited for, you know, the masses to really, you know, tap into it, learn about it, and really get engaged with it.

Dan Runcie  18:10

Yeah, I can see that. Are there any that are public that you’ve worked on that you can talk more about?

Dazayah Walker  18:17

Yeah, so one of my favorite companies in our portfolio, which is actually one of the companies from the previous class of Techstars. It’s called Faith. And this is one that I really, really loved. Because not only did our relate to like the platform, just to give you a little bit of background Faith is an app for fans. It allows fans to come together and really live within their fandom. And with me being a past fangirl, I immediately fell in love with what she was building. And the founder, she’s a black woman, she’s a solopreneur, which is a challenge in itself. So just seeing what she’s built so far, the amount of traction that she’s received, and just how far she has come has been super inspirational for me, you know, being involved, even in like the due diligence and saying, I think this is a great company, I think this is one that we really should pay attention to, to the point of us actually deploying capital to that company. That was super cool, and really amazing. And that’s another company in our portfolio that I’m super excited about. And I feel like not only will my generation, like, enjoy the app, but the generation underneath me will as well, so…

Dan Runcie  19:23

Nice. That makes sense. Yeah. And I feel with apps like that in platforms. I mean, not only do you have the direct connection, but I’m sure you being able to have the connection to it. I mean, these are the type of things obviously it’s still early stage, you know, but gets marked up you continue to have that influence over it and you never know where that could take you. I feel like that’s kind of the exciting thing, especially for the people I talk to you that are that start their careers in VC, as opposed to the other way around the, you know, the folks that may have done something on the product side and then go into vc.

Dazayah Walker  19:56

Yeah, but my goal overall, really is to, you know, find my groove in this and really, you know, find success for myself and I define success within this space is being able to invest in companies, have exits, and you know, have a strong portfolio, so that I can get to the point where I’m able to educate and inform, because I feel like, part of the reason why a lot of artists, athletes, and entertainers, which is, you know, the people that I’m used to working with and being around, which is why I really strongly urge them to get into this space, and why I feel like I’m in the position, and the person to really do that work, is because they don’t know, like, there’s that kind of barrier. Like they may see things on social media of other artists that have invested in Gods, you know, there’s money back, but really having someone there to educate them and be that bridge and that conduit from, you know, them being in the position and the level of influence, and you know, the reach that they have, and showing them and being that person to bring deals to them to help them leverage that so that not only are they able to, you know, be represented in this space, but build generational wealth for them and their families. Like that’s the bigger picture. And that’s the goal for me. And that’s the work that I really want to do and look forward to doing. So finding success here and having a strong, like track record and proven portfolio, and then being able to use that as a way to show people you can do this too. And this is how, let me show you how, let me be that person to help you understand and be a part of it.

Dan Runcie  21:32

Yeah, that’s powerful. Because I feel like especially for you or you’re in your position now. There’s a lot of people that I’m sure look at you being like, oh, Dazayah, how can we get in that? Like, how do you were able to, you know, connect those dots. And then you obviously, you know, I’m sure you feel like you’re deep into yourself, you’re learning as you’re continuing to grow. But you know that in the near future, you will be able to have enough. And that can look like a number of things, whether that’s a course or some other type of platform to just share and disseminate this information. Because not only is it important for people to hear it, it’s important for people to hear it from people who you know, look like you they if you want to inspire, you know, especially if there’s black women across the country across the world, I want to hear it, the more folks that could share their experience, the better that is.

Dazayah Walker  22:16

Absolutely, I agree 100%. Like, the more you know, the better position that you can put yourself in. And I just think it’s a lack of knowledge, people just not knowing, like, what these things mean, how to get in on deals, how much to invest, like, there’s so many layers to it. And I feel like if people were a bit more comfortable, they’d be more open and investing their money in other ways than the traditional stocks and bonds or, you know, how people see fit to save their money or invest their money, I should say.

Dan Runcie  22:47

Yeah, especially now I feel like we’re seeing things like whether it’s the accredited investor rule or other things just continuing to be challenged, we’re gonna see more and more people investing the definition of an investor and who can get involved with things. As those barriers continue to lower, the options increase. And when that happens, it just provides more space for education. So yeah, you’re definitely on the right track with all that stuff has ever said. 100%

Dazayah Walker  23:13

Thank you. That really means a lot. Thank you.

Dan Runcie  23:16

Yeah, well, um, I know that, you know, we’ve covered a lot in this. But before we let you go, I do want to get a quick take from you on what are you most excited for? What’s coming through the QC portfolio for the rest of 2022? And I guess portfolio, that’d be more on the artists side. Specifically, what are you excited for on that front.

Dazayah Walker  23:36

I’m just excited for the continued growth of Quality Control as an empire. It hasn’t even been 10 years that QC has been in existence. And for us to have made so much leeway, create so much history have so much impact within that 10-year window. I’m excited to see what the next five years look like for us. But even just in the next year, in the next 12 months, I’m excited to see the continued growth and effort of our team, like our team has grown dramatically. So if we were able to do and accomplish so much with such a small team, I’m excited to see what the next 12 months look like for our expansion and our growth and just everything to come and everything that we’re building, publicly and silently. I’m just grateful for the position that I’m in and be able to be a part of that and even say those things. So the next year it’s going to look like a lot of wins continued success and growth and expansion for all of us.

Dan Runcie  24:38

That’s exciting. I feel like the past decade for QC has been incredible. I think it’s so tough for indie labels to be able to have that type of run in the fact that they have says a lot. So I’m excited. I mean, as a fan of all of this, I’m excited to see what happened. But yeah, before we let you go, is there anything else you want to plug or let the Trapital audience know about?

Dazayah Walker  25:00

I should say this is great, Dan, I absolutely love what you’re doing what you’re building, you’re spreading a message that needs to be heard by so many. And you’re not only inspiring me, but you’re inspiring people that you may not even know that you’re touching. So keep doing the work that you’re doing. This was awesome. Thank you so much.

Dan Runcie  25:19

Thank you. I appreciate that. Appreciate that. We’ll do. Thanks, Dazayah.

Dazayah Walker  25:23

All right. Thank you, Dan.

Dan Runcie  25:28

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