Tim Sullivan, the CEO of the New Jersey Economic Development Authority, spend some time Wednesday night discussing the proposed $10 million Black and Latino Seed Fund program, an initiative that Gov. Phil Murphy feels will help get capital to a group of entrepreneurs that historically has been overlooked.
The program — which is part of the yet-to-be-approved budget — certainly would be welcomed by those in the Black and Latino community.
The bigger takeaway from the Instagram Live discussion, “Removing Barriers for Diverse Entrepreneurs,” may have been the discussion of the programs that already exist.
Lauren Maillian, CEO of digitalundivided, which co-sponsored the event, detailed a number of initiatives from her group, a nonprofit, social startup that leverages data and advocacy to catalyze economic growth for Black and Latina entrepreneurs in innovation and technology, including:
- START 2021, a three-week virtual program for Black and Latina women founders at the idea stage of their entrepreneurial journey;
- BIG Pre-Accelerator, a fast-paced pre-accelerator program for high-potential, pre-revenue Black and Latina women-led startups;
- Do You Fellowship, which positions high-potential, innovative Black & Latina founders for growth by providing them with funding, professional development and access to exclusive mentorship and resources.
“Responsibility falls on all players in the innovation ecosystem to break down the barriers that far too often impede the path to success for entrepreneurs of color,” Maillian said. “It’s important to keep having conversations like we had last night and to continue connecting diverse entrepreneurs with critical resources like the programming spearheaded by NJEDA and digitalundivided.
“Working together, we will encourage innovation in New Jersey and have a lasting impact on the nation’s economy.”
And, while Sullivan said the EDA certainly hopes the Black and Latina Seed Fund becomes a reality, it has a number of programs already in place, too, including:
- The Angel Investor Tax Credit Program, which encourages investment in women- and minority-led businesses;
- The NJ Ignite program, which supports startups led by women and entrepreneurs of color that are considering moving to a New Jersey collaborative workspace;
- The Film and Digital Media Tax Credit Program for productions with an approved diversity plan;
- The diversity bonus to the NJEDA’s own venture investment plan, and an increased investment cap for investments in certified woman- or minority-owned businesses under the New Jersey Innovation Evergreen Fund, created under the Economic Recovery Act of 2020.
“Reclaiming New Jersey’s position as the nation’s leader in innovation hinges on welcoming all entrepreneurs with original ideas to pursue their dreams,” Sullivan said. “Under Gov. Murphy’s leadership, we’re working with our partners in the public and private sectors to close funding gaps that exist for far too many entrepreneurs of color and ensure that founders have the resources they need to succeed.”
Of course, there’s a need for more.
The innovation economy is facing a nationwide diversity crisis. According to Crunchbase, American companies raised a record-setting $150 billion in venture capital funding in 2020, but less than 1% of this went to Black-owned companies. The numbers are even worse for women. According to digitalundivided’s ProjectDiane, Black and Latina women received just 0.64% of total venture capital investment between 2018 and 2019.
That’s where the proposed Black and Latino Seed Fund program comes in.
The concept for the fund came from a Request for Information issued by the EDA last year to solicit input on ways to increase access to capital for Black- and Latino-led startups.
The RFI sought 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.
The next step? Getting it approved.