The Enterprise Center launches a fund to invest in minority-owned enterprises Business

Della Clark, president of The Enterprise Center, is committed to raising $ 50 million for this Innovate Capital Growth Fund to address the capital shortfalls faced by many minority and women’s businesses in the Mid-Atlantic region.

After the launch of the fund, TEC became the first business center of a minority business development agency in the country, which has under one roof both the Community Financial Development Institution (CDFI) and the Small Business Investment Company (SBIC).

“The SBIC program from the SBA (Small Business Administration) was founded in 1958 and has become one of the most successful federal programs for small businesses in the United States,” said Clark, a founding partner of Innovate Capital. “But these benefits did not always apply to minority and women’s businesses. This is primarily due to structural inequalities and lack of access to the wealth of generations, especially for color business owners. Our fund focuses directly on this issue, providing capital for these businesses to scale operations and unlock generations of wealth for themselves. ”

The fund is run by Clark, Bob Palmer, former managing director of CMS Mezzanine and Blessie Thomas, who has more than 15 years of experience in finance and marketing. This initiative will take shares in the companies involved, rather than issuing grants or loans.

Clark also stressed the need for small businesses to get contracts during the launch event at TEC headquarters in West Philadelphia.

“We need to make sure these businesses have predictable profits – a predictable opportunity for them to pay off on their investments, and we will help them grow the top line of their balance sheet and lower profitability,” Clark said.

TEC officials were joined by representatives of the SBA, the Minority Business Development Agency (MBDA), local elected officials and heads of some of the region’s largest corporate and financial institutions to mark the historic moment.

“MBDA is committed to hard work so that businesses can raise equity. This is a historic achievement for a women-led venture capital fund – a type of funding that is difficult to obtain for many minority businesses, ”said Miguel Estien, Acting MBDA National Director. “We are excited to see that the Philadelphia MBDA Business Center has become the first SBIC in our network. We hope that this fund creates a plan and will serve as a catalyst for other minority investment funds to obtain SBIC licenses. ”

Bailey DeVries, assistant administrator of the SBA’s Office of Investment and Innovation, discussed how funds such as Innovation Capital have the ability to support companies by providing capital.

She said the SBA had provided more than $ 1.1 trillion in financial assistance to small businesses due to the impact of COVID-19.

“Many of us know that many of the businesses that needed capital the most were left behind or didn’t get capital as quickly as they needed to, and were often in black and brown communities across the country,” DeVries said. .

“We have an opportunity to deal with this and make sure that this situation does not happen again in the future. But we need to strengthen our public banking system, and strengthen relationships and networks to access other types of capital or patient capital, like what Innovate is doing here today – to provide that access to the full capital stack, ”she said. in this way, these businesses can withstand and have a strong balance to withstand the storm. “

The fund is targeted at small businesses with profits of $ 2 million to $ 20 million, which have record revenue growth, a strong management team and identified opportunities for growth.

The fund’s current commitments of about $ 14 million come from some of the region’s largest companies, institutions and banks and private investment groups, including Bank of America, Philadelphia Children’s Hospital, Customers Bank, Delaware Valley Regional Economic Development Fund, Firstrust Bank, Forman Family Foundation , Independence Blue Cross, FS Investments, NewSpring Capital, Spring Point Partners, Republic Bank, Univest Bank & Trust and TEC. Independence, FS Investments and Bank of America have allocated $ 1 million each for these efforts.

“We need to do more to create a level playing field, to fully unleash the potential of minority businesses, and as a result strengthen our regional economy,” said Steve Ferra, senior vice president of public relations for Independence.

“Our business and civil society need to come together to make more capital available to these companies, so Independence was one of the first to take a step forward and invest in the Innovate Capital Growth Fund through the Independence Blue Cross Fund,” he said.

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