A new Inclusive Innovation Fund is set to invest in developing Washington, D.C. businesses owned by minority entrepreneurs, Mayor Muriel Bowser (D) announced Sept. 5.
The fund, which is being organized in partnership with The Marathon Foundation, is meant to benefit people of color, women, members of the LGBTQ community, individuals with disabilities, and members of other minority communities.
TMF is set to begin investing in companies by mid-2019, planning on raising private capital for the fund over the next few months, according to a Sept. 5 news release. Although TMF will manage the new investment fund and the process of acquiring capital, the city has endowed $1.5 million in seed funding to initiate the program. In addition to raising capital, TMF will be tasked with orchestrating the actual investments in local startups.
A local, D.C.-based organization which focuses on helping entrepreneurs gain access to capital, TMF is led by Vernon Lee Jr. and Duane McKnight, experienced investment professionals. The foundation seeks to form strategic relationships consisting of access to capital and opportunities for developing talent, according to the TMF website.
The fund is a step in the process of expanding economic opportunity to D.C. residents, especially those in underrepresented communities, Bowser said.
“This partnership will break down financial barriers and move us one step closer to ensuring all Washingtonians, including underrepresented entrepreneurs, are able to share in our city’s continued prosperity,” Bowser said in the Sept. 5 news release.
The announcement comes as the newest part of the Bowser Administration’s overarching inclusive innovation strategy entitled Pathways to Inclusion. Released in November 2016, Pathways to Inclusion reiterated Bowser’s commitment to making Washington, D.C., a hub for innovation and technology on the East Coast and a global model for prosperity through diversity.
Since the beginning of her term, Bowser has prioritized the technology sector as a driver for future growth, a push that has been seen in numerous instances, including the city’s bid last year to host a new second headquarters for Amazon.
Businesses eligible for fund money and assistance must be under the majority ownership of an individual or individuals from underrepresented groups and be in the pre-seed, seed or pre-Series A stages, which refer to young companies who have not entered or just begun entering the first round of venture capital funding, according to the Sept. 5 news release. In addition, the fund will direct its investments toward businesses that have the opportunity to scale.
The design of the fund was developed by the Office of the Deputy Mayor for Planning and Economic Development, which put out a Request for Information in February. The call for input from Washington, D.C. citizens received over 30 responses which guided the Bowser Administration’s approach in creating the fund. In April, the city began its search for a potential partner.
The fund is the next step in creating more economic opportunities for lower-income households in the District, Bowser said.
“Together, we will build on our progress in making Washington, DC the capital of inclusive innovation and create more pathways to the middle class for District residents,” Bowser said in the Sept. 5 news release.
The Office of the Mayor and The Marathon Fund did not respond to requests for comments.