Chicago tech nonprofit P33 received $3 million from the federal Minority Business Development Agency (MBDA) on Friday.
The funding will be used to grow its TechRise Expansion Initiative, which supports underserved founders as they go from an idea to scaling a business.
The MBDA funding comes through its Capital Readiness Program, which is deploying a $125 million technical assistance program to help underserved entrepreneurs grow and scale their businesses. P33 was one of 43 awardees and the only organization in Illinois to be selected.
At a press conference held on Friday morning, U.S. Rep. Danny K. Davis, whose 7th District has seen more private equity investment than all but two other districts across the nation, said that every small business he's talked to, the main problem he hears about the most is access to cash.
And it's even more difficult for underrepresented and minority founders.
For Stella Ashaolu, founder and CEO of WeSolv, a platform that connects enterprise companies to more diverse talent, to say that scaling a tech company and raising venture capital as a Black woman founder has been difficult would be "an understatement."
"Lack of access to capital, lack of access to networks and lack of representations are just some of the barriers we face," she said at the press conference.
Black women in particular get only 0.35% of venture funding, according to Ashaolu.
Ashaolu participated in programs like TechRise as a young founder, and the $25,000 she won from a TechRise pitch competition is part of the reason her business is where it is today.
"It was not just the money. It was helpful to get connected to the network, resources and the validation. I'm proud to say I am one of the few Black women that have raised over $1 million of venture capital," she said.
Prioritizing startup diversity in Chicago
Desiree Vargas Wrigley, a two-time startup founder in Chicago and chief innovation office at P33, said the organization is focused on making Chicago a "tier 1 innovation hub" and has deployed $2.5 million to founders so far.
"These founders have gone on to raise over $70 million in follow on funding — a 30x return on investment in two years," she said. "Until a couple of years ago, I was one of two Latinas that have raised over a million dollars."
In fact, in 2019, Wrigley said only $9 million went to underserved founders among the billions that startups across the city raised. Since then the city has come a long way, with P33 founders raising $60 million last year along with around a 6x increase in the amount of capital going to underrepresented founders, according to Wrigley.
The numbers are even stronger in the early-stage, with 15% of venture going to underrepresented founders.
