Rutgers Business School’s Center for Urban Entrepreneurship and Economic Development received a major grant from the U.S. Economic Development Authority to continue and strengthen its efforts to build Black and Latino-owned tech businesses.
The $300,000 Build to Scale Capital Challenge grant was awarded to the Black and Latino Technology Angel Investment Fund of New Jersey, which CUEED launched last year.
The fund is one of CUEED’s newest initiatives to empower entrepreneurs, strengthen urban communities and create greater inclusion in the innovation sector. It is considered critical to strengthening the work of CUEED’s three-year-old Black and Latino Technology Initiative.
Lyneir Richardson, executive director of the Center for Urban Entrepreneurship and Economic Development, said he views the grant as the EDA’s “vote of confidence” in the Black and Latino Technology Angel Investment Fund.
“The Build to Scale grant completes the desired P-3 trifecta of funding from the public sector, a noteworthy philanthropic organization, and individuals in the private sector,” Richardson said.
“All are committed now, with real money, to make early stage capital available to fuel tech start-ups and growth companies led by Black and Latino entrepreneurs.”
A group of individuals affiliated with Rutgers University and CUEED committed $500,000 to create the angel fund as a way of providing capital to innovative, potentially profitable minority-owned start-ups. CUEED will receive the grant money over three years, $100,000 annually.
“The angel fund seeks to change the fact that less than 1% of all high growth technology start-ups are led by African Americans or Latinos,” CUEED wrote in its EDA grant proposal. “Research has shown that entrepreneurs of color have difficulty getting accepted into top tech startup accelerators and security early-stage growth capital.”
The Black and Latino Technology Initiative, known familiarly as the BLT Initiative, provides Black and Latinx entrepreneurs with mentorship, networking, potential funding and connects them with resources and experts. Its goal is to work with founders of tech startups in an effort to increase their chances of being accepted into an accelerator or in obtaining seed capital to grow their ventures.
CUEED said the Capital Challenge grant will support the expansion of the angel fund by helping to recruit more private sector investors and expanding the ability of entrepreneurs to access early-stage risk capital. It will also fuel the BLT Initiative’s efforts to prepare entrepreneurs for investor presentations and identifying qualified deals, enhancing investor knowledge and facilitating co-investment opportunities with other angel investment funds.
One of the objectives of the BLT Initiative is to assist more diverse entrepreneurs get accepted into accelerator programs so they may attract additional private capital to commercialize their ideas and grow their businesses.
The BLT Initiative is part of CUEED’s award-winning economic development programming. More than 450 diverse small business owners have benefited from the center’s support, including 74% who were Asian, Black, Hispanic and Native America and 62% who were women.
The efforts by the BLT Initiative and the Black and Latino Investment Fund to achieve more inclusion in the innovation sector are complemented by the ongoing research of Jeffrey Robinson, CUEED’s academic director.
Robinson’s federally funded research examines the reasons for the lack of diversity within the U.S. innovative economy examines the reasons for a lack of diversity within the nation’s innovative economy and identifies disparities in how federal funding is allocated to technology entrepreneurs.
In addition to CUEED, the U.S. EDA awarded Build to Scale grants to 51 organizations from 36 states. The organizations include nonprofits, institutions of higher education and entrepreneurship-focused programs.
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