FOR IMMEDIATE RELEASE
October 4, 2022
ENTREPRENEURS OF COLOR GET A BOOST FROM A NATIONAL PHILANTHROPIC INITIATIVE, ALONGSIDE $10 BILLION FROM TREASURY
Today, Hyphen launched the Fund for Inclusive Entrepreneurship to expand access to capital for small businesses owned by people of color, leveraging $10 billion in ARP funding through Treasury’s State Small Business Credit Initiative
WASHINGTON, DC — Today, at the Freedman’s Bank Forum hosted by the Biden-Harris Administration at the U.S. Department of Treasury, Hyphen announced the launch of The Fund for Inclusive Entrepreneurship (The Fund), a new $100 million national initiative to expand access to capital for small businesses owned by people of color. With lead support from JPMorgan Chase and the W.K. Kellogg Foundation, The Fund will serve as a force multiplier for historic federal resources through direct investment in communities of color, which have historically had limited access to equity and equity-like capital.
Leveraging $10 billion in American Rescue Plan (ARP) funding through the Department of Treasury’s State Small Business Credit Initiative (SSBCI), the Fund will stimulate sustainable economic growth in underserved communities across the United States through a two-stage approach: (1) building capacity among high-impact community lenders, and (2) raising investment capital to invest alongside SSBCI funding. The Fund invites national and community foundations to join this initiative to support entrepreneurs of color in states across the country.
“The State Small Business Credit Initiative has made an historic investment in entrepreneurship and innovation that is structured to ensure communities of color, rural areas, and others that have difficulty accessing capital, are able to get the financing they need to grow and scale. Partnerships between states, private sector, philanthropy, and nonprofits will be critical to the Initiative’s continued success,” said Secretary of the Treasury Janet Yellen.
“Access to financing remains a challenge for business owners of color,” said Elizabeth Blount McCormick, President of Uniglobe Travel Designers. “We need flexible financing that allows us to build and grow our businesses without requiring significant collateral or personal wealth. I'm encouraged by the commitments being made through The Fund for Inclusive Entrepreneurship and look forward to seeing more flexible financing products made available to entrepreneurs of color. This is a first step towards equity for all.”
This latest Hyphen-led public-philanthropic collaboration presents a critical opportunity to directly benefit communities of color, building on the success of the White House Community Violence Intervention Collaborative, which has leveraged more than $300 million in ARP funding to date. Launched in collaboration with Next Street, The Fund also builds on JPMorgan Chase’s $30 billion Racial Equity Commitment and the W.K. Kellogg Foundation’s work on equitable communities.
The Fund will maximize the impact of the ARP by not only empowering entrepreneurs of color to establish and grow their small businesses but also by creating jobs and building wealth to benefit families and communities now and for generations to come.
“With this unique convergence of federal and philanthropic investments, entrepreneurial minds, and a drive towards racial justice, this Fund will transform the ways in which we deliver equity and equity-like capital to small businesses owned by people of color,” said Archana Sahgal, Founder and President of Hyphen.
"In the U.S., people of color have experienced economic exclusion for generations, holding back entire communities from thriving,” said La June Montgomery Tabron, President and CEO of the W.K. Kellogg Foundation. “We have been a proud, early champion of efforts to begin righting those historic wrongs by expanding people of color’s access to capital and confronting discrimination in the marketplace. We are excited by the opportunity the Fund for Inclusive Entrepreneurship provides for us to bring our experience with our grantees and partners to this moment of urgency for small businesses and urge even more in the philanthropic community to join our efforts.”
The Fund’s partners understand that progress begins with innovation and reimagining capital through more inclusive delivery systems. “We want to multiply the impact of SSBCI dollars in historically underserved communities,” said Carolina Jannicelli, Head of Community Impact at JPMorgan Chase. “The Fund for Inclusive Entrepreneurship speaks to our deeply held belief that a more inclusive economy is a stronger economy.”
The Fund will leverage an initial target investment of $15 million in grant capital to catalyze $100 million in equity and equity-like capital for entrepreneurs of color. Philanthropic investments will also unlock government SSBCI capital by ensuring that state governments investing in entrepreneurs of color can meet the minimum federal requirement of securing $1 in private capital for every $1 in SSBCI funding. Foundations interested in joining this initiative are encouraged to contact Hyphen.
Hyphen works to maximize the impact of federal policies for low-income families, communities of color, and other marginalized populations through public-philanthropic collaborations. Its initiatives strengthen public safety, expand economic opportunity and safety-net programs, and ensure that the rebuilding of the nation’s infrastructure leads to equitable outcomes.