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Startups The PISLA Beat

The Plug In South LA Beat: Covid-19 Exacerbates the Financing Gap

The financing gap between Black-owned and white-owned businesses in the United States has long been enormous. Now an article in Vogue Business shows that the pandemic is making the divide worse.

Although some Black-owned businesses saw a bump in sales following the BLM protests nationwide, startup founders of color continue encountering systemic issues around access to investment.

“Covid-19 has refocused public attention to the challenges that have long afflicted Black entrepreneurs in the US and especially their struggle in accessing capital,” news editor Annachiara Biondi wrote. “Aside from bank loans, Black-owned businesses are also less likely to receive venture capital and investment from angel investors, with Black entrepreneurs receiving less than 1% of VC capital.”

Biondi spoke with a number of startup founders who have come up against these hurdles, including Mented Cosmetics co-founder KJ Miller. “[Funding] is difficult for everyone, but it’s doubly difficult when there are so few people who look like you sitting across that table in the venture capital world,” she said.

For this Plug In South LA Beat, our regular curation of must-read innovation and tech news, we’re taking a closer look at the imbalance — and how Covid-19 could actually become a catalyst for positive changes:

Lacking Financial Support, Black-Owned Businesses Are Suffering

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Startups The PISLA Beat

The Plug In South LA Beat: Women of Color Start Early-Stage VC Fund

For the first time, women of color are leading a venture capital fund. Started by five top investors, the fund focuses on founders, ecosystems, products, and services with significant opportunity for growth that traditional VCs historically overlook.

Noramay Cadena, Daphne Dufresne, Juliana Garaizar, Karen Kerr, and Lorine Pendleton are the Portfolia Rising America Fund lead investors. They’re looking for early and growth-stage companies in the US led by people of color, LGBTQ founders, or both, Pendleton told Mary Kathleen Flynn for a Q&A with Mergers & Acquisitions.

“Our first investment was in MoCaFi, a Newark, New Jersey-based fintech startup founded by African-American entrepreneur and former JPMorgan Chase commercial banking executive Wole Coaxum,” Pendleton said. “Our second investment, which we have not publicly announced yet, is a Series C in a women’s tele-medicine network with holistic care provided in 20-plus specialties and 30 languages.”

In today’s Plug In South LA Beat, our regular curation of must-read innovation and tech news, we’re finding out how this pioneering VC fund could help drive innovation where it’s needed most:

Led by 5 Women of Color, Portfolia Rising America Fund Backs Mobile Banking and Women’s Telemedicine Startups

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The Plug In South LA Beat: Black Execs Invest in Broadband Access

The Covid-19 crisis has exposed broadband deserts throughout America. Now, two Black executives are working to increase access in rural and urban areas by launching an infrastructure impact fund.

Black Enterprise reported that Morris Clark and Otis Ellis, both former executives at S&P 500 companies, started the new Epiphany Community Impact Fund.

“We are focusing on the full spectrum of infrastructure shortcomings that have resulted from a systemic lack of investment in underserved communities,” Clark and Ellis told the news outlet. “We are currently considering opportunities in broadband access and reliability, as well as transportation and education infrastructure.”

This edition of the Plug In South LA Beat, our curation of must-read innovation and tech news, delves into the state of high-speed internet access in America and how targeted investment could make a difference:

Black Execs Launch Infrastructure Impact Fund to Erase Broadband Deserts in Rural and Urban Areas

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Startups The PISLA Beat

The Plug In South LA Beat: Protests Boost Black-Owned Businesses

Black Lives Matter protests are boosting sales for Black-owned businesses in Los Angeles and across the country, according to recent news articles. Restaurants and shops in particular are experiencing higher demand.

A Google document that lists 300 Black-owned restaurants in LA helped drive a big bump, LAist found. Danielle Mullen, who owns Semicolon Bookstore in Chicago, told Black Enterprise that she went from selling 3,000 books in a week to 50,000. OneUnited, America’s largest Black-owned bank, received more than 40,000 new accounts over the past month, Dalvin Brown wrote in USA Today.

“Lists of local retailers, artisans, and manufacturers have been circulating on Instagram, Facebook, and Twitter, helping Black-owned businesses raise their profile at a time when the coronavirus pandemic has ravaged the economy,” the Associated Press reported, adding that Google searches for “Black owned businesses near me” reached a record high in the US.

For today’s regular curation of must-read innovation and tech news, the Plug In South LA Beat, we’re taking a closer look at what this tech-driven interest actually means for the business owners:

Sales Are Climbing at Many Black-Owned Businesses in Wake of Racial Protests

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Startups The PISLA Beat

The Plug In South LA Beat: Why the Tech Industry Still Lacks Diversity

Many Silicon Valley tech companies released statements recently in solidarity with the Black Lives Matter movement, but their continued lack of Black and Latinx workers tells another story.

“The industry, which prides itself on agility, has failed to move the needle on workplace diversity,” Sam Dean and Johana Bhuiyan wrote in the Los Angeles Times on Wednesday.

In today’s Plug In South LA Beat, our regular curation of must-read innovation and tech news, we’re seeking answers.

“Tech’s approach to diversity the last few years has been like filling the bathtub with the drain open,” Freada Kapor Klein, a founding partner at the venture capital firm Kapor Capital, told the journalists. Greycroft investor Brentt Baltimore, who will be speaking at Urban Tech Connect 2020 in September, also weighed in.

Here’s what the industry stats reveal:

Why Are Black and Latino People Still Kept Out of the Tech Industry?

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Startups The PISLA Beat

The Plug In South LA Beat: This Black Female Founder Paves the Way

Crystal Etienne, founder and CEO of Ruby Love, used to dread pitching. But, as she explained in a recent Q&A, she started looking at the process differently.

“I think it’s such an awkward moment for any, or most, founders,” Etienne told Crunchbase for their Female Founder Series. “It wasn’t until I stopped looking at it as pitching and started looking at it as me telling the story of this great company and opportune market that I started to feel completely comfortable.”

That approach paid off. Her period wearables products company, which launched as PantyProp in 2015 and later rebranded as Ruby Love, secured $15 million Series A funding last year from the global investment fund the Craftory.

For this Plug In South LA Beat, our regular curation of must-read innovation and tech news, we’re finding out how Etienne is paving the way for next-gen entrepreneurs:

Fundraising Success Through Authentic Storytelling: Ruby Love CEO & Founder Crystal Etienne Describes Her Journey

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Startups The PISLA Beat

The Plug In South LA Beat: Inside Planet FWD’s $2.7M Seed Funding

Julia Collins sees a growing consumer demand for climate-friendly foods — and wants to meet it. Her climate-focused snack startup Planet FWD recently announced $2.7 million in seed funding.

That seed round led by BBG Ventures with additional participation from a number of other investors was unique. Collins told TechCrunch that 99.5% of the funds came from people of color and/or women.

In this Plug In South LA Beat, our regular curation of innovation and tech news, we’re learning more about Collins’ approach. “When it came to the regenerative food landscape, nothing had been codified or mapped yet,” she said.

Find out how she went from a “little spreadsheet” to building a regenerative food platform and climate-friendly snack brand:

Zume Co-Founder Goes from Pizza to Climate-Friendly Food with $2.7 Million in Funding

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Startups The PISLA Beat

The Plug In South LA Beat: Black Animators Bridge Cultures

D’ART Shtajio, a 2-D animation studio in Tokyo, is the first in Japan created by Black animators. For today’s Plug In South LA Beat, our regular curation of must-read innovation and tech news, we’re getting to know these pioneering creatives.

As AfroTech’s Njera Perkins explains, Black background artists Arthell and Darnell Isom founded D’ART Shtajio with animator Henry Thurlow.

“The three animators created their studio infusing American culture with Japanese anime, and in the process have worked on some huge anime projects,” Perkins wrote.

Keep reading to find out how D’ART Shtajio is creating more visibility for animators of color in the industry — and why comic book insiders say the studio is attracting fans’ attention:

D’ART Shtajio is Japan’s First Major Anime Studio Owned by Black Animators

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The Plug In South LA Beat: $100 Million Fund for Founders of Color

As calls for change grow louder, we’re seeing new sources of funding open up that could help tip the scales. Today’s Plug In South LA Beat, our curation of must-read innovation and technology news, takes a closer look at SoftBank’s recent announcement.

SoftBank COO Marcelo Claure sent a letter to employees saying that the firm will create a $100 million fund that only invests in companies led by “founders and entrepreneurs of color,” Axios markets editor Dion Rabouin reported.

“The Opportunity Growth Fund is one of the first to put significant capital behind companies’ statements of empathy and outrage in response to protests over systemic racism in the U.S. typified by the killings of George Floyd, Breonna Taylor and other African Americans by police,” Rabouin wrote.

Find out where the fund stands, who’s involved, and why this capital matters:

SoftBank to Launch $100M Fund Backing Companies Led by People of Color

SoftBank Reveals $100M Fund To Invest In ‘Founders Of Color’

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Startups The PISLA Beat

The Plug In South LA Beat: Black Woman’s Tech Firm Makes History

Sevetri Wilson recently made history with an $8 million series A funding round for her software-as-a-service company Resilia. The round represented one of the largest investments for an enterprise software company headed by an African American female founder, Resilia reported.

For this Plug In South LA Beat, our curation of must-read innovation and technology news, we’re drawing inspiration from Resilia founder and CEO Wilson, whose New Orleans-based company works to democratize innovation for the nonprofit industry by bridging gaps between those deploying capital and those on the receiving end.

“I wasn’t in the venture world and I didn’t come up in San Francisco. So you could imagine going out to raise money, and you’re not a technical founder, and you’re black, and you’re from the South. I had a lot of ‘ands’ with me,” Wilson told Black Enterprise executive managing editor Alisa Gumbs.

Continue reading to find out how she pivoted to start Resilia:

Black Women Rock at Raising Capital: Sevetri Wilson’s NOLA Startup Raises $8 Million