NYCEDC Commits $10 Million to Invest Alongside VC Partners over Five Year Period
Deputy Mayor Alicia Glen and New York City Economic Development Corporation (NYCEDC) has released a Request for Proposals (“RFP”) in an effort to address the disparities related to raising capital experienced by women entrepreneurs, especially in the tech industry. WE Venture will seek out venture capital partners who not only acknowledge the disparities these entrepreneurs face but also demonstrate a track record of raising and deploying capital to companies owned by these often-marginalized groups.
The City of New York will create a Venture Capital Investment Consortium in partnership with selected firms. The consortium will be a part of Women Entrepreneurs NYC, which has worked with over 5,000 women to start and scale their businesses. WE NYC is an initiative based out of the NYC Department of Small Business Services (SBS) that provides free courses on credit, financing, leadership, and legal services, in addition to mentoring services, networking events, and workshops tailored for women and by women across the five boroughs.
WE Venture is the latest in a series of WE Fund financial products, which include crowd-funded loans in partnership with global nonprofit Kiva, as well as larger low-interest loans provided by local Community Development Financial Institutions.
In addition, the City’s Women.NYC portal offers a comprehensive suite of programs to help women succeed. The website is a one-stop-shop that provides information, resources, and tools on key topics such as finding a job, starting and running a business, getting legal help, accessing health services, raising a child/family, money management and more.
“We’re focused on keeping NYC the best city in the country for women entrepreneurs – and we’re putting our money behind it,” said Deputy Mayor for Housing and Economic Development Alicia Glen. “It’s no secret that women and minority entrepreneurs play a critical role in cultivating our City’s vitality and economic development, yet they still face many barriers in obtaining capital for their businesses. With WE Venture, we’re investing with venture capital partners who share our vision to close the funding gap, create quality jobs, and maintain successful businesses here in New York City.”
“The city’s tech startup industry continues to grow, with $8 billion in venture capital funding invested in NYC-based startups since 2009,” said NYCEDC President and CEO James Patchett.” However, there is still a long way to go to bridge the gap in funding for underrepresented startup companies. WE Venture will provide resources and support to women entrepreneurs, ensuring they have access to the capital and tools they need to thrive and create high-quality jobs for New Yorkers of all backgrounds.”
Assemblymember Ron Kim said, "This RFP represents a unique chance to address the gap in business opportunities for undeserved New Yorkers, especially women and people of color working in the tech sector. We are one of the most diverse places in the world, but for many of our communities a fair shot at the American Dream still feels just out of reach. I applaud Deputy Mayor Alicia Glen and the New York City Economic Development Corporation for their consistent efforts to provide more opportunities to marginalized, working-class entrepreneurs."
“If New York is going to continue to be the flagbearer of forward-thinking entrepreneurship, we must be sure to uplift and support the innovations of women entrepreneurs," said Council Member Peter Koo. "We NYC will go far to level the playing field for women and provide new opportunities for quality jobs. Thank you to NYCEDC for looking to bring parity on our city’s burgeoning tech industry.”
“While access to capital is a challenge for most small businesses, women entrepreneurs face even greater barriers to securing reliable, affordable capital compared to their male counterparts,” saidGregg Bishop, Commissioner of the NYC Department of Small Business Services. “The WE Venture plan is an opportunity for New York City’s venture capitalists to join the City in remedying this gender gap by making capital more accessible to women entrepreneurs across the five boroughs.”
Over the past decade, venture capital firms across the United States have steadily made an increasing number of investments in tech companies. In 2017, VCs invested $84.2 billion, up 16 percent from 2016 and over 100 percent from the previous ten years. In spite of the substantial increase in venture capital investing, women and underrepresented minorities reflect a fraction of the recipients receiving funding across the various stages of their growth and development. Women make up nearly half of the workforce in the United States and are 36 percent of small business owners; however, only 12 percent of venture capital funding goes to startups with at least one-woman founder.
NYCEDC, by way of WE Venture, seeks to create a VC consortium that aims to facilitate investments in companies owned by underrepresented groups in NYC. NYCEDC sees an opportunity to invest alongside engaged VC Partners who not only seek financial returns, but also share the City’s vision to serve as the top choice for diverse entrepreneurs in tech.
Proposals for the City of New York Venture Capital Investment Consortium are due October 26, 2018by 4pm ET. The RFP can be downloaded here. An information session will be held on Thursday, September 20, 2018 at NYCEDC. Those who wish to attend should RSVP by email to VCC@nycedc.com no later than 5:00 p.m. on Wednesday, September 19, 2018. The specific location and directions to the information session will be emailed to those who RSVP for the information session.
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