(Photo by Philly by Drone)
The City of Philadelphia announced today a new component to its StartupPHL initiative: The Venture Program, a round of grants to back founders from socially or economically disadvantaged backgrounds.
The new component, which replaces the Call for Ideas program, will let Philly-based tech entrepreneurs vie for grants of up to $25,000 to fund ideas or initiatives that comply with five objectives determined by the Department of Commerce:
- Increasing employment in Philadelphia
- Educating potential entrepreneurs
- Promoting inclusion of all communities in the innovation economy
- Driving economic development in neighborhoods outside of the central business district
- Disrupting generational poverty through sustainable opportunities
“We know that talented entrepreneurs come from all walks of life, but opportunity is not equally distributed,” said Commerce Director Harold Epps. “That is why we need to reinforce our commitment to equitable growth. This initial round of the StartupPHL Venture Program will elevate entrepreneurs who have the ideas and the tools to grow tech-based businesses in Philadelphia.”
The application process for the program is now live, and the deadline to apply is May 5.
StartupPHL, launched in 2012 under Mayor Michael Nutter, is the City’s push to encourage startup growth in Philadelphia. The project entailed the backing of local tech companies, in partnership with VC firm First Round Capital, and a grants program titled Call for Ideas. Now, the investment component is onto its second fund, with Ben Franklin Technology Partners leading the investing, and its Call for Ideas program has been replaced with this new Venture Program.
Francisco Garcia, the City’s director of business development for innovation and technology, told Technical.ly the Venture Program has been in the works for about a year.
“Historically, the Call for Ideas have gone to nonprofits,” Garcia said. “That’s a great approach for engaging people but at the end of the day I feel we at the Department of Commerce should be supporting businesses. The focus on disadvantaged entrepreneurs is not as old but was inspired by some of the work we did with the Northstar Conference, by feedback from entrepreneurs and other programs around the country.”
This time around, while nonprofits are welcome to apply, they must prove how their projects are leading to the growth of the types of businesses and entrepreneurs that are the focus of the grant, City spokesperson Lauren Cox said.
The model of the grant program is interesting in that it could help solve for what is often a catch-22 of sorts for founders from underrepresented backgrounds: Venture capitalists often want to see founders have been able to raise money from friends or family before entering deals, but founders from disadvantaged backgrounds struggle to find sufficient wealth in their networks.
Upending that status quo has been the main investment thesis behind Los Angeles-based venture firm Backstage Capital, which has a local accelerator with half a dozen companies led by diverse founders.
What kind of projects will get back? Broadly speaking, Garcia said the companies that apply to the program should be solving problems using tech.
“We want that to be broad, because we want to identify founders that may have gone unnoticed before, and we also want to reach other neighborhoods,” said Garcia, likely in a reference to Center City’s clustering of resources.-30-
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