As the tech and startup industry continues to make efforts to address racial inequalities, especially when it comes to venture capital access, local tech organization P33 is revealing a new fund dedicated to supporting Chicago’s Black and Latinx startup founders.
Tech Rise, officially announced Thursday, is a diversity initiative that focuses on expanding access to capital and fostering more community for entrepreneurs of color created by P33, 1871 and Verizon. The initiative includes a $5 million fund supported by corporate and institutional philanthropy. To help lead P33’s diversity efforts, the organization hired Desiree Vargas Wrigley, a local Latinx serial entrepreneur.
The funds will be dispersed in the form of grants to Black and Latinx founders that win weekly pitch competitions over the next three years hosted by P33. Grants will range from $10,000-$50,000, and local venture capitalists and other tech leaders are slated to judge the competitions. The idea is that VCs will be exposed to more founders of color to invest in down the line and the first competition is scheduled for March.
Tech Rise is designed for idea-stage and early-stage startups founded by minority founders. Because many Black and Latinx founders have trouble raising what’s commonly referred to as the “friends and family” round, P33 aims for Tech Rise to help fill in the gaps.
“Let’s make Chicago your friends and family,” Vargas Wrigley said.
Tech Rise will also connect participating startups with other local seed-stage and Series A startup founders to help founders build meaningful networks, and break down capital barriers in the future. Only 1.9% of venture capital goes to founders of color in Chicago, according to data compiled by P33.
“Not only are we under-indexing nationally, but we’re severely under-indexing when you consider the fact that about 30% of our city is Black and another 29% is Latinx,” Vargas Wrigley said. “We are the most racially-distributed city in the country and yet our venture capital funding is so anemic to our Black and Latinx founders.”
Vargas Wrigley is the founder of GiveForward, one of the first crowdfunding sites, and Pearachute, a children activity marketplace. GiveForward was acquired by YouCaring in 2017, and Pearachute is still operating. Between the two companies, Vargas Wrigley raised nearly $12 million in venture capital.
Verizon is also the sponsor of 1871’s BLK•Tech accelerator, which was announced earlier this month. P33, founded in 2018, has grown to 15 employees.
