Why McDonald’s 1st Black CEO stepped down to start VC firm supporting Black businesses

Don Thompson is the founder of Cleveland Avenue, a venture capital firm he established to support Black-owned businesses on Chicago’s South and West sides. He named his venture firm Cleveland Avenue after the street where he grew up — near what was then Cabrini-Green, a crime-ridden public housing project on Chicago’s Near North Side that has since been demolished, according to the Chicago Tribune.

Since its founding, Cleveland Avenue has invested millions of dollars in fast-growing food startups such as Beyond Meat and Farmer’s Fridge, the Chicago Tribune reported. It has also invested close to $500 million in Beyond Meat and other food startups like Red Bay Coffee, and Bartesian.

Last year, the Chicago Tribue reported that Cleveland is leading a $70 million initiative to fund Black, Hispanic and female entrepreneurs traditionally overlooked by venture capital firms and his investment drive is geared towards strengthening Black businesses.

And in April last year, the 58-year-old began seeding a new crop of minority-owned businesses on Chicago’s South and West sides.

He told the Chicago Tribune that he is confident that the Cleveland Avenue model will help to foster diversity and produce good investment returns in Chicago neighborhoods far from Silicon Valley.

“That model of collaboration can support our entrepreneurs and it can support all of them,” Thompson said. “So we’re going to prove it by supporting our Black and brown and women entrepreneurs. We’re in the game for everyone, not just a small group.”

In 2012, Thompson became the first Black Chief Executive (CEO) of McDonald’s in its almost 100-year history. Prior to that, he had spent over 20 years working for the global fast-food giant and rose through the ranks to become the company’s first Black CEO.

The businessman was raised by his grandmother and moved to Indianapolis when he was only 11 years old. Thompson moved to his grandmother’s in order to escape the growing violence in Cabrini-Green. He joined McDonald’s in 1990 as an engineer designing food transport and cooking systems after working six years at defence contractor Northrup Grumman.

Thompson built a steady but fluid career, occupying one top position after the other at McDonald’s and eventually becoming its CEO in 2012. His rise to the top was largely due to the support of senior Black directors already at McDonald’s. They encouraged him to join an accelerator development program in operations, which meant he had to work in McDonald’s restaurants and learn how the company worked across the U.S., according to Unleash.

By 2006, he was the president of McDonald’s U.S. and Canada before moving into a global role as COO and then CEO in 2012.

His first four months at the helm of the fast-food giant saw its sales decline in a decade but picked up after he spent a year on the job. He recorded some massive success, including a higher stock price. Nonetheless, he “grappled with the economic slowdown and an investor base unaccustomed to disappointment,” according to Chicago Tribune.

“There are several things we’ve done quite well, despite the fact that it’s a difficult global economy, and probably one of the worst we’ve seen collectively around the globe at the same time,” Thompson told Chicago Tribune in June 2013. “We’re maintaining and even growing our market share, which is one of the things we strive to do, particularly in tighter times for consumers and discretionary spending.”