Mayor’s office seeks advice for how to incubate new minority-owned startups
Mayor Muriel Bowser issued a Request for Information (RFI) earlier this month seeking insight from investment professionals on the design and approach of the Inclusive Innovation Fund.
The Inclusive Innovation Fund is a new program that aims to increase access to capital for entrepreneurs in D.C., particularly underrepresented entrepreneurs such as women and people of color.
Access to capital is one of the biggest barriers to minority entrepreneurs, according to Pathways to Inclusion, a report released in November 2016. The report found that less than half of minority entrepreneurs surveyed had managed to obtain funding for their companies. None received venture-capital investment, half received angel investments or philanthropic gifts, and half relied on family, friends, personal savings or credit cards.
“I think that one of the barriers is that people tend to invest in companies that look like themselves,” said Chanda Washington, with the office of the Deputy Mayor of Planning and Economic Development. “So, one of the challenges is the number of investors that are people of color or LGBTQ or women, the numbers are already low.”
The technology industry is one example of where a lack of diversity among investors and owners makes it difficult for minorities to break into the field, according to Sharon Carney, economic strategy director with the Office of the Deputy Mayor for Economic Development.
“I think that across the country we are seeing that the tech industry is not always reflective of the full diversity of our country,” Carney said. “It’s overwhelmingly white and male. It’s not always welcoming of people who may not fit that description.”
Carney added that it is difficult to amass social capital for many underrepresented entrepreneurs and the Inclusive Innovation Fund hopes to help entrepreneurs build stronger relationships with investors and companies.
The RFI is designed to work with private investors and incubators to gather information about how best to create an inclusive fund for minority entrepreneurs. Carney said that steps will be taken once the responses to the RFI are collected, and the Inclusive Innovation Fund will move forward in its goal of providing more capital to minority entrepreneurs.
The Inclusive Innovation Fund strives to be the first of its kind, working to create a more inclusive entrepreneurial ecosystem in the District, according to Washington. “We want to figure out the best possible solution to addressing this challenge,” she said.