Techstars announced a new accelerator program powered by J.P. Morgan that will invest more than $80 million in diverse entrepreneurs and founders across the country.
Techstars and J.P. Morgan began partnering in 2021 to develop this program focused on advancing equitable access to funding in major economic centers. In the first half of 2021, Black entrepreneurs received just 1.2 percent of U.S. venture capital funding.
How Techstars use the new investment?
Additional data show that Latino founders raised only 2 percent of U.S. venture capital investments in 2021. This partnership seeks to help bridge the racial and ethnic wealth divide through Techstars’ unique startup accelerators that provide access to capital, one-on-one mentorship, and customized programming for early-stage entrepreneurs.
“The data and experience show founders from diverse communities and backgrounds represent an untapped market with tremendous financial upside for investors, the entrepreneurs, and the communities they operate in,” says Mäelle Gavet, CEO of Techstars.
“With J.P. Morgan, our goal is to be more intentional in the way our programs attract, support and invest in Black, Latino and other underrepresented founders.”
“Together with Techstars our goal is to improve access to the capital and other resources needed by underrepresented entrepreneurs to start, fund, and scale their businesses,” said Kristin Kallergis Rowland, global head of alternative investments at J.P. Morgan Private Bank.
What does Techstars initiative look like?
With 27% of Techstars’ existing portfolio company CEOs identifying as Black, Hispanic and Latino, Indigenous American, American Indian or Alaska Native, Other Pacific Islander, Middle East/North African, this partnership is designed to create support for diverse founders of high-growth startups to generate greater income, stronger influence, and wealth creation.
Tiffany Lewis, head of diverse manager strategy at J.P. Morgan had these remarks.
“The multi-year program will focus on entrepreneurs and founders that have been overlooked by traditional venture capital sources. This new commitment will advance the shift toward more equitable economic opportunities through access to financial services, mentorship, quality education and training, and promoting inclusive business practices.”
Over the next 3 years, the funds will be distributed to over 400 companies through 37 Techstars programs in 9 U.S. cities. The first 5 cities; Atlanta, Chicago, Detroit, Miami, and Washington D.C. launch today with a call for applications from entrepreneurs.
The Los Angeles, New Orleans, New York and Oakland programs will launch in 2023. All 9 of these high-growth technology ecosystems were selected for strategic reasons including the prominence of the diverse make-up of their populations which each program seeks to reflect.
Are there any success stories of the Techstars initiative?
Each of the three-month programs will support founders like Jasmine Jones who went through Techstars’ Kansas City Accelerator edition in 2020.
Co-founder of Techstars’ Cherry Blossom Intimates, Jasmine describes her Techstars experience as opening doors of possibilities with no limit to success. “I met over 90 mentors who helped me to refine my business, build my cap table, and raise $1.25m in 30 days.”
“What made me excited to be a part of the Techstars program is that it opens doors to new possibilities and business potential. The network is invaluable,” Jones said.
Cherry Blossom Intimates is an accredited medical facility boutique. Jasmine also launched Myya, a direct to consumer post-mastectomy brand that accepts insurance and connects patients to certified fitters for post-mastectomy bra and prosthesis fittings from home.
Measuring impact and ensuring accountability within this multi-city U.S. program is paramount, as these small steps forward can help narrow the gap in the racial wealth divide. While the programs are open to founders of all backgrounds, their recruitment efforts will have a focus on Black, and Hispanic founders or those who identify as ethnically diverse.
Progress will be tracked regularly and shared with senior leadership across both organizations. These efforts will further allow for maximum program impact and aim to bring an enhanced equity and inclusion lens to the wider investment community.