The New Jersey Economic Development Authority has issued a Request for Information, seeking input on ways to increase access to capital for Black- and Latinx-led startups.
The EDA feels the RFI will help the organization fully understand the scope and nature of the challenges Black and Latinx business owners and entrepreneurs face when attempting to access public and private capital.
The deadline to submit ideas is July 29. The RFI is available here: www.njeda.com/Bidding-Opportunities-General/Economic-Transformation-RFIs.
Tim Sullivan, the CEO of the EDA, said the RFI shows the organization’s commitment.
“Our commitment to creating a diverse and inclusive innovation ecosystem where entrepreneurs can flourish long predates COVID-19 and has become more important than ever in the wake of the pandemic,” he said. “We welcome any and all creative ideas on ways to create equitable opportunities and help overlooked communities overcome longstanding hurdles to accessing investment dollars.”
The RFI seeks input from a diverse range of stakeholders, including fund managers, angel investors, venture capitalists, small business owners, researchers and practitioners involved in entrepreneurship work, industry and trade groups, and other states’ governments.
Questions included in the RFI address Black and Latinx businesses’ needs and solicit suggestions for how to best structure solutions, including attracting existing seed funds to New Jersey or creating a new seed fund with a specific focus on such businesses. One potential solution the NJEDA is considering is a diversity seed fund that would focus on driving capital to Black- and Latinx-owned enterprises.
Michelle Bodden, the EDA’s chief diversity and inclusion officer, said access to capital is key.
“The need to attract capital transcends racial lines, yet, far too often, Black and Latinx entrepreneurs find themselves at a disadvantage when seeking funding from investors,” she said. “Through this RFI, we are looking for ways to change that narrative and level the playing field for all founders, regardless of race or color.”
According to a survey by Diversity VC and Rate My Investor, nationwide less than 1% of all venture capital investments go to Black-owned firms and less than 2% of investments go to Latinx-owned companies.
This not only limits opportunities for members of these populations, but creates massive opportunity costs by depriving economies and industries of the wide array of perspectives and experiences members of underserved populations could contribute.
RFI responses must be submitted in writing no later than 11:59 p.m. July 29 to RFI-ExpandingSeedCapital@njeda.com. The subject line of the email should read “RFI Response-2020-RFI-099: Expanding Seed Capital to Black and Latinx Entrepreneurs.”