How DC’s Improving Access to Capital For Underrepresented Entrepreneurs
Through The Inclusive Innovation Fund
I closed out 2017 with a prediction for the Washinton, DC startup ecosystem in 2018. I stated:
My expectation is that DC will start prioritizing people over infrastructure in 2018. As the seed and early stage market cools down and VCs move up the stack, we will see new players step in to invest in entrepreneurs — the people who will build the next wave of hugely successful DC startups. Much like Tedco in Maryland and CIT in Virginia, I’m hoping it’s DC government. And if they are to be successful, DC will require active, coordinated collaboration and investment of time and capital across the ecosystem of non-profits, corporates, government, and academic institutions and individuals. A healthy ecosystem is a diverse ecosystem — in people, thought and actions.
It looks like the universe is conspiring to help DC bring my prediction into fruition. This week, Mayor Bowser’s Administration issued a Request for Information (RFI) seeking input on the design of and approach for an Inclusive Innovation Fund, a new program that aims to increase access to capital for District entrepreneurs, particularly for underrepresented entrepreneurs, such as people of color and women. The investment fund will be privately managed and led by the Office of the Deputy Mayor for Planning and Economic Development.
DC has been making strides to create more equitable development over the past few years for founders. In November 2016, the District released Pathways to Inclusion, a roadmap for making Washington, DC’s tech and innovation economy the most inclusive in the nation. A survey of entrepreneurs conducted for the report showed that access to capital was the most frequently cited barrier to inclusiveness for minority entrepreneurs, followed by: implicit bias, access to networks, and access to talent enabling programs. It also revealed 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 and friends, their personal savings, and credit cards.
“Access to capital is critical to starting and growing businesses in the District, and underrepresented entrepreneurs — including people of color, women, and LGBTQ residents — often face particularly high barriers during the early stages. Our goal with this fund is to break down some of those barriers and get more residents on pathways to the middle class,” Mayor Bowser said in a statement.
Although not entirely clear, DC intends to provide risk capital to enable an investment professional partner that shares the Bowser Administration’s vision for inclusive innovation to build out a program that makes a lasting and substantial improvement to the entrepreneurial ecosystem. As someone who has experience working with diverse founders, supporting entrepreneurs and investors in DC, raising funds and investing in high-growth companies, I look forward to contributing ideas on the design and approach of the new program.
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