The Ewing Marion Kauffman Foundation has announced the initial funds and firms selected to participate in an initiative aimed at providing early-stage capital to underserved entrepreneurs.
Launched in 2019 with $3 million from the Kauffman Foundation and $500,000 from the Rockefeller Foundation, the Capital Access Lab will provide risk capital to entrepreneurs who lack access to traditional bank loans and venture capital funds. Selected from a pipeline of more than a hundred potential funds and firms — 55 percent of them led by women and 41 percent led by people of color — in thirty-two states, the funders selected to participate in the initiative are 1863 Ventures, a business development program that invests in member enterprises committed to revenue growth, job creation, and community impact; Anzu Partners, an investment firm that funds industrial and life science technology companies in the manufacturing, materials, modeling, and measurement space; Capacity Capital, which invests in building the capacity of businesses, with a focus on revenues over valuation; Collab Capital, an Atlanta-based firm that targets African-American founders and investors; and Indie.vc, which provides seed funding to entrepreneurs through its scout program, prioritizing businesses unlikely to scale fast enough to attract the attention of traditional VC funds. Collectively, the five funds and firms have already invested $3 million in the initiative, catalyzing at least $5 million in additional investment capital.
According to the Kauffman Foundation, a Black entrepreneur is three times less likely to be approved for a bank loan than a white entrepreneur, a man is 60 percent more likely to secure funding than a woman when pitching the same business, and nearly 80 percent of all VC funding in the first quarter of 2018 was concentrated in San Francisco, Silicon Valley, New England, the New York City metro area, and L.A./Orange County.
"Your gender, where you live, or the color of your skin should not determine whether you can start a business," said Philip Gaskin, the foundation's vice president of entrepreneurship. "The Capital Access Lab is non-traditional by design because the status quo for how people secure capital is no longer an option. We were thrilled to see such a diverse pipeline of funds show interest in the lab in its first year, and we are certain that this model will help even more entrepreneurs access the capital they need to focus on growth, profitability, and building a sustainable community."