Although we’re told business isn’t personal, the reality is that business is built on relationships.
In other words, it’s not what you know, it’s who you know. And if the numbers tell us anything, it’s that socially and economically disadvantaged entrepreneurs need more chances to connect to new networks that have the resources to push their businesses forward.
Less than 2.2 percent of venture capital funding goes to female founders across a meager 4.4 percent of total overall investments. Only 1 percent goes to African-American founders and another 1 percent goes to Hispanic founders.
In an effort to eliminate funding bias and close the investment gap, Maryland-based economic developer TEDCO—which provides entrepreneurs with the resources, funding and connections to grow their companies—created the Builder Fund.
The Builder Fund is a unique, cohort-based program that offers operational guidance and financial support to Maryland startups founded by socially or economically disadvantaged entrepreneurs. TEDCO’s definition is broad: anyone that can prove why they don’t have access to mainstream funding has an opportunity to compete to join the program. Often that includes women, African-Americans, Hispanics, veterans and other groups.
To be clear, it’s not an accelerator. Recognizing that relationships were an essential component lacking in disadvantaged entrepreneurs’ access to funding, the Builder Fund assembles a vetted C-suite to help founders operate and prepare their startups for seed-stage investments. They don’t just advise, they actually get their hands dirty and work with the company as if it was their own.
It’s a new approach to inclusivity, and one that TEDCO thinks will catch on: that relationship-building directly tied to operational performance will lead to more conclusive steps forward toward addressing this challenge.
“Having an experienced team around me is the biggest perk of the Builder Fund,” said Andrea Pais, current cohort participant, and founder and CEO of Novel Microdevices, which makes a handheld molecular diagnostic tool. “I did a pretty good job researching how to put together a business plan, but there are small nuances you don’t know to put into your plan. There’s only so much you can Google.”
Pais, who is originally from India but came to the U.S. for grad school, was grateful for access to to TEDCO’s experts, whose backgrounds include marketing, finance, data analytics and leadership.
“Getting those crucial nuances into the plan, which fully convey our value proposition to investors, is what is most useful,” she said.
The 24-week program includes a cohort of five companies selected for their “readiness to win” an investment. Although they share the C-suite, each company receives an individualized plan of action. Working hand-in-hand with the executives, they set and work towards meeting milestones that will prepare them to engage and attract seed-stage investors. The C-suite not only helps them become competitive, it provides access to an essential network of investors they otherwise might never meet.
Another cohort participant, Steven Meyers, noted the importance of relationships he connected with through the program. Meyers, an African-American veteran of the U.S. military, is President and CEO of Rockville, Md–based eMedical Sentry, a remote chronic care patient monitoring service.
“You’re working with people who can see how you work, what your goals are, what your temperament is,” he said. “If they understand that you have the capability, they can be your advocate and help you get funding.”
Furthering its support of the entrepreneurial journey, TEDCO also hosts a weekly speaker series, open to the public, for the first 12 weeks of the Builder Fund program. Anyone with an interest in entrepreneurship is invited to attend the free events, which educate and extend valuable networking opportunities to engage with speakers, investors and TEDCO representatives.
The series provides in-depth coverage and tactical expertise across three core facets of entrepreneurship:
- The Mindset: Understanding how the entrepreneur game works and how to get on board, seeing both the big picture and the details, learning about value creation;
- The How: Driving and tracking performance, creating lean startup messages for validating market fit, and everything from marketing to growth-hacking to pricing strategies; and
- The Presentation: Communicating a compelling, performance-based story tailored to what investors are looking for.
Though this season’s speaker series is already underway, there are plenty of sessions left and the public is encouraged to attend Wednesdays from 3-5 p.m. at Betamore City Garage in Baltimore.
To learn more about the Builder Fund and how to apply, click here.