Forging a more inclusive economy by investing in high-growth, diverse businesses
Despite the potential for diverse businesses to be powerful economic catalysts for historically underserved communities, many face persistent, structural inequities and barriers that prevent them from growing their businesses, including lack of access to capital, mentorship, training, expertise, networks and markets.
Access to capital has long been the primary impediment to the growth of diverse businesses, particularly access to competitively priced capital. To that end, the Entrepreneurs Equity Fund will work to accelerate the growth of emerging, high-potential, diverse-owned businesses by making direct equity investments and increasing access to non-predatory sources of capital, including revenue-based financing and low-cost working capital.
The majority of the Fund’s initial allocation of $100 million will be dedicated to direct equity investments and increasing access to non-predatory capital. However, recognizing that all businesses need more than just capital to grow, the Entrepreneurs Equity Fund will also underwrite philanthropic grants designed to improve the operating environment for underrepresented entrepreneurs and diverse-owned businesses by supporting them with training, executive mentoring, data collection, research and policy development.
“America’s future rests on our entrepreneurial fire. But in recent years, the spark within many entrepreneurs has struggled to find the oxygen to burn bright. The causes are many: predatory practices, lack of access to capital and social networks, the need for learning and community, and the systemic failures that lead many to not even try. For too many people today, the American dream feels out of reach. I find this to be unacceptable, which is why we are launching this fund to invest in diverse businesses that have unfairly been excluded from opportunity for too long despite their enormous potential to help rebuild our country.” - Howard Schultz, Schultz Family Foundation co-founder and Starbucks interim CEO.
“Every person, regardless of race or background, deserves an equal opportunity to realize their dreams. Unfortunately, in America the color of your skin and where you grew up are the most reliable predictors of economic success. We believe that investing in underrepresented entrepreneurs and diverse-owned businesses will be an efficient and effective means for forging amore inclusive economy, reducing the wealth and employment gaps, and strengthening our democracy.” -Tyra A. Mariani, president of the Schultz Family Foundation.
“There are a growing number of innovative, growth-oriented, diverse-owned businesses poised to join the middle market. But for too many of them, capital is out of reach because too often capital flows to the best relationships, not the best deals. By supporting these companies, we believe that they will not only outperform in terms of financial returns but lead the way in creating positive social outcomes, jobs, and wealth in historically underserved communities.” - David Hinson, managing director and head of the Entrepreneurs Equity Fund.