Tech accelerator receives $1 million grant and plans to increase investment in black startups –

Plug In Ventures, a Black-owned tech accelerator, has secured a brand new $1 million grant from the California Office of the Small Business Advocate (CalOSBA). Plug In Ventures will receive $250,000 annually for 4 years. The funding goals to empower Black and Brown early-stage startups in Southern California by supporting a more inclusive entrepreneurial ecosystem through access to capital, mentoring, resources and educational programs.

CEO and Founder Derek Smith says financing will concentrate on supporting diverse business owners in South Los Angeles and surrounding cities and neighborhoods. The grant can be used to enhance his company’s accelerator program and support recent founders beyond this system. This will include tailoring services aimed toward preparing Black entrepreneurs for VC opportunities and connecting them with potential equity investors.

“Our goal will be to equip them with the skills and resources needed to develop business models and ideas to support the venture, especially in the field of software technology,” he says BLACK ENTERPRISES.

Generally, tech startup accelerators are run by experienced entrepreneurs who help early-stage tech firms connect with investors, improve their products, and refine their business plans. Capital injection is essential. Funding for Black founders has declined steadily in the three years since George Floyd’s murder in 2020. It’s been a banner yr of funding, with promised commitments from tech firms. Yet last yr, just 0.48% of all VC dollars were raised by Black founders, based on the research company Crunchbase. This implies that roughly only $661 million of the $136 billion went to black businesses.

Smith founded his South Los Angeles-based company in 2014 with a primary concentrate on supporting Black startups. Since 2019, firms in his company’s ecosystem have raised over $22 million in VC funding in areas including climate/sustainability, the creator economy and sportswear.

But now Smith wants the variety of firms his company helps secure investment to grow conservatively by 10% to 20% by 2025 and expand into recent sectors corresponding to automation, healthcare and digital. Plug In Ventures currently works with over 30 firms, including roughly 20 owned by Black entrepreneurs.

Smith explains that his company has until now provided all of its labor freed from charge to help its founders prosper. But this spring, it’s switching to an equity-based model with the goal of owning 5% to 7% of the shares, which is able to allow founders to participate in the accelerator.

“We also intend to facilitate follow-on investments directly and through our investor community,” he says.

Smith expects his company’s revenue to grow conservatively by 30% to 40% this yr, although he didn’t provide exact amounts. He expects the expansion to come from an increase in the corporate’s programming base and recent financing sources, in addition to expansion into recent markets corresponding to Atlanta and New York this yr.

“With a renewed flow of venture capital into Black and Brown entrepreneurs, the work we do to support these enterprises is now more important than ever,” he explains.