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Philly’s BIPOC Entrepreneurs Get New Promises To Fund Businesses And Correct An Historic Deficit

Erin Arvedlund The Philadelphia Inquirer

WWR Article Summary (tl;dr) As Erin Arvedlund reports, "Amid the heightened focus on social equity issues, nearly a dozen new investment funds have launched in the Philadelphia region, aspiring to raise at least $300 million or more for BIPOC business owners."


Kimberly Wilson, a Black woman who struggled to get white doctors to take her symptoms seriously after a 2017 fibroids diagnosis, founded digital start-up HUED a year later to enable Black and Latino patients to find culturally sensitive medical care.

Wilson is a model for what many in the region hope to encourage: a Black female entrepreneur who's raised venture capital in Philadelphia to build a business.

Up until the killing of George Floyd and ensuing protests, Black, Indigenous, and people of color (BIPOC) founders and entrepreneurs started businesses at a high rate but were often starved for capital. Amid the heightened focus on social equity issues, nearly a dozen new investment funds have launched in the Philadelphia region, aspiring to raise at least $300 million or more for BIPOC business owners.

The need is acute. Among five major East Coast cities, Philadelphia had the lowest number of businesses per 1,000 residents in 2017, according to a report released last year by the Center City District and Central Philadelphia Development Corp. Philadelphia also had the lowest number of Black-owned firms in relation to Black residents, and large racial disparities in business ownership.

Some of the new funds focus heavily on real estate, while others nurture tech start-ups.

One flagship project: Mosaic Development Partners, an African-American-led developer for the Philadelphia Navy Yard's next phase, is building a $2.6 billion, multiyear development. Just breaking ground, the Navy Yard effort has promised to subcontract $1 billion worth of work to companies run by people of color.

So will the promise of this moment turn into a movement? Or will it fizzle and revert to the mean? There's an uptick in interest, say a wide range of entrepreneurs and funders. But there's still a lot of catching up to do and a lot of Philly skepticism to overcome.

"Until we get more women and people of color writing checks, I'm not sure," said Tanya Morris, founder of MomYourBusiness, an accelerator for women of color.

Some deals are already happening. Private-equity firm Osage Partners of Bala Cynwyd joined Female Founders Fund and tennis player Serena Williams' venture fund to raise a $1.6 million for HUED. Other funders included Northwestern Mutual, Black Founders Matter and angel investor Halle Tecco.

"We funded HUED because the problem the company is attempting to solve is massive and one that was laid bare during the pandemic, " said Osage partner Emily Foote.

Another BIPOC-owned firm getting seed money is EmployeeCycle, a Philadelphia start-up backed by private equity and venture capital, including support from the Comcast NBCUniversal Lift Lab Accelerator fund. Started by Bruce Marable, a graduate of Central High School and West Chester University, EmployeeCycle puts a company's human resources onto an online dashboard to track a company's most important metrics.

"I'm a founder of color, and I can say that this year, there are a lot of investment funds focused on BIPOC founders. We're nowhere near equality, to the point where it should be, but there's definitely more capital being put to work by VC firms into BIPOC owners," said Marable. His human resource analytics company has raised $1 million in its latest round.

"I've seen a big percentage uptick [in BIPOC founder interest], however that's probably from almost zero," he added.

Other BIPOC entrepreneurs have a similar take. "If you look at recent data around who gets funding, the truth is we still have a long way to go to level the playing field for BIPOC founders," said Yong Kim, founder of Wonolo, a staffing platform that matches jobs and employers. He recently moved his family from Silicon Valley to Philadelphia.

"I am proud to have a diverse set of investors who are mission-driven and who are eager to support me as an Asian American and immigrant founder," said Kim, whose Philadelphia customers include Nordstrom. "That gives me hope that investors overall are expanding their thinking around who should get capital."

BIPOC Entrepreneurs A key study this year examined barriers to capital: the Philadelphia Equitable Entrepreneurship Ecosystem Assessment and Strategy, issued in May, found that BIPOC communities have higher rates of start-ups compared to whites, but far more frequently lack capital.

A Federal Reserve Bank of New York study found that BIPOC-owned firms were disproportionately harmed during the pandemic. The number of all small business owners fell by 22% from February to April 2020 — the largest drop on record. Black businesses declined most sharply, suffering a 41% drop, due to weaker finances and bank relationships, and the uneven reach of government aid, the study said. Latinx business owners fell by 32%, while Asian business owners dropped by 26%. The number of white business owners fell by 17%.

BIPOC founders often lack a network of family and friends for capital or credit lines with banks. So many take on debt instead.

"The main barrier to capital for minority enterprises is their balance sheets — little cash and receivables — along with low assets" to qualify for loans, said Della Clark, executive director of the Enterprise Center. "Most already have [too much] debt."

Similar trends hold in real estate. So Black and brown developers started The Collective, a group of seven African American developers aiming to raise their own $100 million investment fund by year-end, tapping banks and private real estate investors. The developers include Tayyib Smith of Smith & Roller and Leslie Smallwood-Lewis of Mosaic Partners.

"At a national level, what The Collective's doing is unique," because it's all African American developers working together, said Karine Blanc, the group's Director of Investments. She says Philly has historically been similar to Newark, N.J., where "there are opportunities for developers of color, but very little capital for their projects."

Groups like ImpactPHL are also in demand for introducing prospective investors and entrepreneurs, said its executive director Cory Donovan. While they don't yet have solid data on deals, "this summer has been an explosion of funds looking to put money to work," Donovan said. "People want to invest locally, but they don't have the time or expertise to make direct investments in start-ups. We help them do that."

In Philadelphia, here are some existing players and new entrants:

Plain Sight Capital Sylvester Mobley, founder of venture capital firm Plain Sight Capital, said he's aiming for a $50 million fund. He announced a first round in January of $15 million . Currently,Mobley said he's the only BIPOC venture capital firm in the city.

"We don't talk about BIPOC founders enough who are starting up scalable, high growth technology companies," Mobley said, pointing to Gopuff the fast-growing delivery firm, as a local success story he would like to see replicated by BIPOC founders. In the last year, Gopuff's valuation reached $15 billion as it expanded across Europe and to 1,000 cities in the U.S.

"Tech start-ups are the largest driver of wealth in the city, but we're not supporting the largest demographic in the city to get them into tech," Mobley said.

Ben Franklin Tech Partners / PACT Ben Franklin Technology Partners Southeastern Pennsylvania has invested $6.1 million so far in its fiscal 2021. Of that, about one-third, or 31 companies, are BIPOC-led, and 42% are led by women. Its most recent diversity investment was on Jan 5, 2021, when Avisi Technologies raised $988,000. Cofounded by Rui Jing and Brandon Kao, the biotechnology start-up works on nanotech defenses against blindness.

Ben Franklin also partnered with the Philadelphia Alliance for Capital and Technologies, or PACT, and will open up its mentorship program to all BIPOC entrepreneurs, not just its members, said Jason Bannon at Ben Franklin. To find a free business mentor, visit PACT's website:

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