A new program aims to provide early-stage funding for Washington state tech startups founded by entrepreneurs who are Black, women, refugees or from other historically marginalized communities.
The new endeavor, the Equitable Innovations Accelerator, will support ten tech startups with up to $100,000 in philanthropically-funded grants, programming and access to mentorship. The accelerator is a joint program from the Washington State Department of Commerce and Find Ventures.
“Access to first financing rounds is difficult for a brand-new start-up founder, especially if they are Black, Latinx, Indigenous, people of color, women, LGBTQIA+ or non-binary. Accessing start-up funding verges on impossible for those without connections to mentors, investors, talent and resources,” said Find Ventures co-founder Elizabeth Scallon in a press release. “Find Ventures wants to change that paradigm.”
Scallon, previously head of WeWork Labs for Northern California and the Pacific Northwest who is now working at Amazon, founded Find Ventures last year with Justin Brotman, son of Costco co-founder Jeffrey Brotman. The fund provides “non-dilutive” awards that do not require startups to give up equity or ownership. Founders are encouraged to sign a non-binding pledge that they will in turn support the fund when they reach sustainable revenue or Series B financing.
The new awards will be distributed through the accelerator program and funded by private donors; that funding is still being secured. The Washington State Technology Industry Association will also support the accelerator’s programming.
Only 1.2% of venture capital invested in U.S. startups through the first half of 2021 went to Black startup entrepreneurs, according to Crunchbase. And that’s a higher proportion than for any previous year: in 2020 that number was a mere 0.6%.
Startups with female-only founders raised just 2.2% of VC funding through the first eight months of 2021, a 5-year-low, Crunchbase also reported.
The commerce department will provide funding for the development and operations of the initiative as part of a “Safe Start” grant from the U.S. Economic Development Administration.
“Find Ventures and the Washington State Department of Commerce share a vision and passion to create a world where all entrepreneurs have an opportunity to build companies and a confident shot at solving our greatest challenges, especially those who have struggled to access traditional sources of capital,” said commerce director Lisa Brown in a statement.
Other commerce department initiatives with an emphasis on under-represented communities include the Small Business Flex Fund, backed by $30 million from the department and $40 million from several banks. The fund has provided low-interest loans of up to $150,000 to more than 110 small businesses since its inception this summer.
In addition, the department’s Small Business Resiliency Network connects small businesses with technical and business assistance, and it will soon launch the Washington Opportunity Network to connect pandemic-affected businesses to support. Application information events for the new accelerator program are on Dec. 6 and Jan 14.
