Funding / POC in Tech / Venture capital / Women in tech

The Enterprise Center is raising a $50M growth capital fund for women- and minority-owned businesses

The West Philadelphia org has seen $14 million committed by area banks, companies and other institutions so far.

The Enterprise Center President Della Clark announcing the new fund. (Photo courtesy of The Enterprise Center) is one of 20+ news organizations producing Broke in Philly, a collaborative reporting project on solutions to poverty and the city’s push toward economic justice.

The Enterprise Center, the West Philadelphia-based nonprofit offering business education and capital resources, is officially launching its fund to support investments in women- and minority-owned businesses. Called the Innovate Capital Growth Fund and aiming to cap at $50 million, the plans for the fund were first announced over two years ago.

The fund is categorized as a Small Business Investment Company (SBIC), which means it’s a privately owned company licensed and regulated by the US Small Business Administration that invests in small businesses in the form of debt and equity.

The federal SBIC program has worked for a long time, The Enterprise Center President Della Clark said at an April 11 event sharing details on the fund. But the benefits haven’t always “flowed” to minority and women-owned businesses.

“This is due primarily to structural inequities and a lack of access to generational wealth, especially for business owners of color,” she said, per a statement. “Our fund is aimed directly at this problem, providing capital for these businesses to scale operations and unlock generational wealth for themselves.”

The Enterprise Center reports that it has seen $14 million in commitment from area banks, companies and other institutions so far.

Della Clark. (Courtesy photo)

Acronym alert: The West Philly org also operates the Philadelphia MBDA Business Center via the US Department of Commerce’s Minority Business Development Agency (MBDA). The launch of the Innovate Capital Growth Fund means it’s the first time an org like The Enterprise Center will house both an SBIC and a Community Development Financial Institution, or CDFI.

Miguel Estién, the acting national director for the MBDA, said he’s excited to see The Enterprise Center become the first SBIC within its network.

“This is a historic achievement for a woman-led, minority venture capital fund — a type of financing not easily obtainable for many minority businesses,” Estién said.

It’s far from the first time we’ve heard how hard it is for women-led businesses or business owned by people of color to access capital. Last month, Black and Mobile cofounder David Cabello told it’s why his startup is pursuing equity crowdfunding over traditional venture capital.

“It’s hard to find trustworthy investors, it never really goes as planned, so we’re doing equity crowdfunding,” he said. “I can raise more with giving less of us. I can set the rules.”

The Innovate Capital Growth Fund will target growth equity investments exclusively in minority- or women-owned businesses throughout the Mid-Atlantic region with revenues between $2 million and $20 million. Per its website, the fund will be “industry agnostic,” but defines its “preferred industries” as business services, healthcare services, niche manufacturing, consumer products, infrastructure services, technology and software, and value-added distribution.

Clark will serve as managing partner of the fund. She is joined by Managing Partner Bob Palmer, formerly a managing director of CMS Mezzanine, and Managing Partner Blessy Thomas who brings her experience in working on growth strategies with major corporations.

Institutional investors that have contributed to the $14 million raised so far include Bank of America, CHOP, Customers Bank, Darco Capital LP, Delaware Valley Regional Economic Development Fund, Firstrust Bank, Forman Family Foundation, Halloran Philanthropies, Independence Blue Cross, NewSpring Capital, Spring Point Partners, Republic Bank, Univest Bank & Trust, University of Pennsylvania and The Enterprise Center.

“We hope that other institutional investors will join us as the fund seeks to raise $50 million to address the capital gap faced by numerous minority and women-owned businesses in the region,” Clark said.

Companies: Enterprise Center
Series: Philadelphia Journalism Collaborative

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