A new accelerator called bETA — BIPOC Entrepreneurship Through Acquisition — is launching to give aspiring BIPOC entrepreneurs in Rhode Island the knowledge, tools and access to capital they need to acquire and run an already existing and successful small business.
The New Majority Capital Foundation is introducing the eight-week program. According to New Majority Capital co-founder Darryl Lindie, there is a major opportunity to change the landscape of business ownership and close the racial and gender wealth gap in Rhode Island and the U.S. more broadly. He said bETA is designed specifically to address those gaps.
Lindie said over the next 20 years, approximately 12 million small-business owners will be looking to transition away from their businesses. With only about 15 percent of owners having a succession plan in place, that leaves a large chunk of some $10 trillion in assets floating in limbo.
"Entrepreneurship through acquisition (ETA) is a path for women and minorities to acquire these businesses from owners who wish to sell," Lindie said. "New Majority Capital seeks to educate and assist women and BIPOC communities on the ETA process."
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bETA is a collaborative process including NMCF, Initiative for a Competitive Inner City, Babson College, CCRI Division of Workforce Partnerships and funding from the Papitto Opportunity Connection. That funding, Lindie said, will be used to support 30 spots in the free program.
The course itself comprises three in-person workshop modules and five weekly virtual sessions spread over an eight-week period. bETA participants who successfully complete the accelerator are eligible for pre-acquisition financing of up to $40,000 at zero percent, provided by New Majority Capital to cover out-of-pocket startup costs.
Other perks include access to premier SBA lenders, an introduction to traditional search fund investors who typically will fund 1-2 years of a company’s expenses, and a stipend of $3,500 to select participants who demonstrate progress towards acquiring a business.
Lindie said New Majority Capital also plans to launch its own revenue-based financing fund in 2023 to provide 100% of the acquisition financing or provide a 50% match to a partner bank’s 50% financing.
"Transitioning these businesses would be a win for local economies as well as the individuals acquiring businesses, as the companies will remain open, jobs will be preserved, and underserved individuals and communities will accumulate more wealth," he said.
The announcement of NMCF's new accelerator comes on the heels of New Majority Capital’s announcement of its seed round from community investors. Late last year, NMC kicked off fundraising on WeFunder, which is open to non-accredited and accredited investors using Reg-CF.
Currently, the fund has moved past $500,000, and Lindie said the company is keeping it open for "selective mission-aligned investors."
Lindie said the company is also launching the New Majority Capital Acquisition Fund with the intention to provide 100% acquisition financing for BIPOC and women entrepreneurs.
"This will use an innovative revenue based financing fund model to allow for non-extractive/entrepreneu- friendly, flexible and patient investments but with attractive risk-adjusted returns," he said.
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