(Photo by Stephen Babcock)
Like the entrepreneurs it helps, TEDCO spent time collecting feedback over the last year. And it wasn’t always pretty.
Maryland’s quasi-public organization, which helps early-stage companies grow and create jobs in the state, brought in an outside group to look at how TEDCO operated. One piece of data that stuck out was the fact that African Americans weren’t applying for TEDCO funding in the same numbers as other demographic groups, even though those who did apply received funding at the same rate, said McKeever Conwell, who was hired by TEDCO last year as a deal-team coordinator. So the organization convened listening sessions at Morgan State and Bowie State to find out why.
One message that was delivered concerned the earliest stages of funding for a startup.
“The thing that comes up anytime you talk to African American entrepreneurs is, ‘We don’t have access to friends and family capital,'” Conwell, who is known as Mac around the Baltimore startup community, said last week at Invested Impact’s Investing in Urban Innovators Summit at Impact Hub.
— Invested Impact (@InvestedImpact) February 15, 2017
To address this gap, TEDCO is launching a $400,000 fund. It’s a partnership with Harbor Bank CDC, the Baltimore-based, Black-owned bank that’s also making a push to help provide capital for African-American entrepreneurs (and is in the process of developing a coworking space).
TEDCO’s Minority Business Pre-Seed Fund is seeking to help 10 Maryland entrepreneurs who are in the idea phase.
Conwell, who is leading the fund, said it starts accepting applications on March 1, and TEDCO is planning a pair of info sessions on Feb. 22 at TEDCO headquarters in Columbia and on March 1 at Harbor Bank in Baltimore. The fund is considered a pilot, with the possibility of expansion to other underrepresented groups.
But it’s not just about money. TEDCO is also looking to redouble its outreach to the African-American community, and provide mentorship to the entrepreneurs that are selected.
That approach of helping entrepreneurs on a person-to-person level is also part of another recent update to TEDCO’s offering.
Entrepreneurs in the region knew TEDCO’s more staid offerings: the Technology Commercialization Fund and the Cybersecurity Investment Funds. Now startups seeking early-stage funding can apply for something new: the Seed Investment Fund.
The money from those individual funds still exists behind the scenes, but after getting feedback, TEDCO staff opted to simplify the name and shorten the application after getting feedback.
With this change, TEDCO is no longer offering an additional $100,000 in follow-on funding for startups that receive funding, said Executive Vice President Stephen Auvil. That funding was initially announced in 2015. Around that time, TEDCO also brought the Maryland Venture Fund under its purview. With that resource for later rounds of funding under its roof, Auvil said TEDCO’s leadership made the decision to use more money for seed funding.
It also meant a new team, with Brian Corbett as Seed Investment Fund Director, Conwell joining as deal-team coordinator. Angela Singleton, who spent four years as TEDCO’s rural business innovation initiative, was promoted as a portfolio manager with the deal team. In an interview, Conwell and Singleton talked about how the changes to the application and structure are designed to help the team have more face time with the companies, along with making it easier. Conwell, who hasn’t demurred from speaking publicly about the challenges of building a business (as well as the upside), said part of his job is saying no to companies that aren’t a good fit.
“I know what that feels like to get the no, so I try to be sensitive to that,” he said. But he also helps companies “understand that it’s all the no’s and advice you get that make you better,” he said.
Before the companies pitch to TEDCO’s investment team, they also now look at the market for their product and hone their pitch. They’re also looking to help connect startups to other organizations that can provide help.
“It’s to streamline the process, but also to play a customer service role to companies,” Singleton said. “We want to make sure that all applicants and all Maryland companies get the most supportive experience from TEDCO that we can possibly provide. “