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Black business leaders win big with explosive growth in SPACs

Jarvis Stewart admits he knew only a little about Special Purpose Acquisition Companies (SPACS). While SPACS have been the rage on Wall Street in recent years, Stewart’s exposure to the financial markets was gained mainly through his longtime friends, which include Christopher Williams, Chairman of Siebert Williams Shank & Co., one of America’s largest minority-owned investment banks and Daniel Black, Managing Partner, The Wicks Group, a New York-based private equity firm.

So, when he received a call just a year ago from an old client, a Canadian CEO who was looking for assistance putting together a SPAC focused on investments in minority-owned businesses, he did what most entrepreneurs do – he leaped at the opportunity. Stewart’s firm was tasked with corporate strategy, recruiting and on-boarding the SPAC’s management team and board members while also helping develop the investor’s pitch. The result was more than $126 million raised for Minority Equality Opportunities Acquisition Inc., which now trades on the Nasdaq under the symbol MEOAU, with the goal of using investor capital to grow MBEs and Black-owned businesses through strategic mergers and acquisitions.

The decision was a good one – and it came when there was a renewed focus on the historic and systemic exclusion of capital in communities of color by the mainstream. Then there’s the explosive growth in SPACs. According to Nasdaq, 613 listings raised a total of $145 billion in 2021, a 91% increase from the amount raised in 2020. “Throughout my career, I’ve not been known as a finance and banking guy, but I do understand the intersection between government, financial markets and growth capital,” Stewart confesses. “The enormity of Wall Street and finance was a little unsettling for me. Now I’m thinking the SPAC is the good Lord’s way of saying, “I’m throwing you into the deep end of the pool because I think you’re ready to swim and have a significant impact.’”

Impact is part of what Stewart looks to accomplish. As the Chairman and CEO of Washington, D.C.-based Highland Poe LLC, a professional services holding company, he brought together the three business areas he is passionate about – government, crisis communications and corporate development. The firm’s clients are among the largest in the automotive, banking/financial service, health care, retail and technology sectors. Stewart was also crisis communications advisor to former Virginia Governor Ralph Northam. Highland Poe consists of three companies: Cover Communications, a public affairs and strategic communications firm; Ian Reid, a boutique bi-partisan federal government and congressional affairs firm; and HP Global Advisors, a U.S. and global business advisory specializing in corporate development, geopolitical affairs, mergers and acquisitions, social impact investing, and now, SPACs.

The idea of the holding company structure came to Stewart during a 14-hour flight in 2019. He had launched Ian Reid in 2007 and Cover Communications (formerly known as IR+Media) in 2014, and running both businesses was beginning to stretch him thin. “I was invited to come to Dubai before the pandemic to give a speech at a conference about politics, government, and the U.S. economy,” recalls Stewart, who previously served as Chief of Staff to former U.S. Representative Harold Ford, Jr. of Tennessee and Senior Advisor to Clinton Labor Secretary, Alexis M. Herman. “And I remember landing

and calling my lawyer and my CPA, and saying, ‘Does this make sense? Can we create a holding company where all firms are under one umbrella?’”

The holding company structure allowed Stewart to sell stakes in the individual companies if he needed a cash infusion or offer equity to senior management while retaining a 100% interest in the parent company. It also let him bring in senior management for each operating company, freeing up his time to oversee the big picture. Stewart would complete the trifecta and enter the capital markets industry in 2021 with the addition of HP Global Advisors.

These days, Stewart is focusing on growing these enterprises. To that end, he recruited Harry Johnson, Sr., to serve as Executive Vice Chairman and Senior Advisor to Highland Poe’s team of corporate advisors. “My immediate goal is to help the team develop a plan for growth by engaging my network of corporate and nonprofit relationships,” Johnson explains. “Secondly, we want to meet organizations where they are and help expand their brand and market share by embracing racial equity and growth strategies. Diversity and inclusion are not complex issues but must be approach in a culturally competent fashion. Advising organizations on those methods is in part our goal.”

Johnson, who Ebony Magazine named to its “100 of the Most Influential Black Americans” list, has impeccable credentials. A lawyer by trade, he also serves as President and CEO of The Memorial Foundation, which focuses on promoting and supporting the general upkeep of Washington, D.C.’s Martin Luther King, Jr. Memorial. Before that, the Xavier University and Texas Southern University alum is credited with raising more than $200 million for the monument. He also served as National President of Alpha Phi Alpha Fraternity, Inc., the 250,000-plus-member fraternity to which Dr. King belonged.

With Johnson’s expertise on board, Stewart is looking to infuse enterprises and communities of color with much-needed capital and help corporations navigate the DEI space. He also plans to grow Highland Poe’s operations organically and through acquisitions to create a diversified Black-owned enterprise of scale. “To gain wealth in America you have to own something,” he says. “Capitalism has proven to reward those who build, scale and sale.”

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