The New Jersey Economic Development Authority (NJEDA) issued a reminder today that it is seeking input on ways to increase access to capital for Black- and Latinx-led startups. The deadline to submit ideas in response to the NJEDA’s Request for Information (RFI) is Wednesday, July 29th, 2020. The RFI is available at https://www.njeda.com/Bidding-Opportunities-General/Economic-Transformation-RFIs.
The RFI will help the NJEDA fully understand the scope and nature of the challenges Black and Latinx business owners and entrepreneurs face when attempting to access public and private capital. According to a survey by Diversity VC and Rate My Investor, nationwide less than one percent of all venture capital investments go to Black-owned firms and less than two percent of investments go to Latinx-owned companies. This not only limits opportunities for members of these populations, but also creates massive opportunity costs by depriving economies and industries of the wide array of perspectives and experiences members of underserved populations could contribute.
“Our commitment to creating a diverse and inclusive innovation ecosystem where entrepreneurs can flourish long predates COVID-19 and has become more important than ever in the wake of the pandemic,” said NJEDA Chief Executive Officer Tim Sullivan. “We welcome any and all creative ideas on ways to create equitable opportunities and help overlooked communities overcome longstanding hurdles to accessing investment dollars.”
The RFI seeks input from a diverse range of stakeholders, including fund managers, angel investors, venture capitalists, small-business owners, researchers and practitioners involved in entrepreneurship work, industry and trade groups, and other states’ governments. Questions included in the RFI address Black and Latinx businesses’ needs and solicit suggestions for how to best structure solutions, including attracting existing seed funds to New Jersey or creating a new seed fund with a specific focus on such businesses. One potential solution the NJEDA is considering is a diversity seed fund that would focus on driving capital to Black- and Latinx-owned enterprises.
“The need to attract capital transcends racial lines, yet far too often, Black and Latinx entrepreneurs find themselves at a disadvantage when seeking funding from investors,” said Michelle Bodden, NJEDA’s Chief Diversity & Inclusion Officer. “Through this RFI, we are looking for ways to change that narrative and level the playing field for ALL founders, regardless of race or color.”
RFI responses must be submitted in writing no later than 11:59 PM EST on July 29, 2020 to RFI-ExpandingSeedCapital@njeda.com. The subject line of the email should read “RFI Response-2020-RFI-099: Expanding Seed Capital to Black and Latinx Entrepreneurs.”
To read Governor Murphy’s full economic plan, please visit: https://nj.gov/economicplan