Clara Wu Tsai is setting up a new program for Brooklyn entrepreneurs looking to accelerate their companies’ growth, Glenn Gamboa of the Associated Press reports Monday.
Named BK-XL, the accelerator will invest up to $500,000 to 12 startups led by Black, Indigenous and other minority founders in 2023, per the AP.
“Capital is one of the biggest impediments to wealth-building, particularly for BIPOC entrepreneurs,” Wu Tsai, the Nets and Liberty co-owner told Gamboa in an interview. “We thought that investing in this segment was how we could create wealth, not only for the entrepreneurs, but also through all the different jobs that they are going to create.”
The AP story on the program notes:
According to Crunchbase, only 2.4% of all U.S. venture capital raised between 2015 to 2020 was allocated to startups with Black or Latinx founders. Funding to Black entrepreneurs quadrupled in the first half of 2021 to $1.8 billion. However, investments to minority founders this year have dropped steeply.
“It will be a mix of grants, loans and investments into this borough which I think ultimately is going to result in strengthening the community and the building up of people,” Wu Tsai said.
The program is part of the Tsais commitment to the underserved businesses in Brooklyn. It started with the George Floyd protests filled the Barclays Center entrance plaza in 2020. BK-XL is part of the couple’s $50 million commitment to the Brooklyn “Social Justice Fund.” Last year, the Social Justice Fund launched the “EXCELerate” initiative that provided no-interest loans to Black-owned small businesses in Brooklyn that needed help recovering from the COVID-19 pandemic shutdowns.
In discussing the difference, Wu Tsai said the investments through BK-XL will help new businesses that are ready to expand.
For the startups chosen for the BK-XL program, the first $125,000 investment will be in return for 7% equity in the startups, split between Wu Tsai’s Social Justice Fund and the investment platform Visible Hands, a platform for “overlooked founders launching and scaling high-growth startups.”
BK-XL will begin taking applications on Dec. 5. Acheampong said any kind of BIPOC-led startup can apply, as long as they will be based in Brooklyn. However, there will be a preference for businesses that are in fields where the Tsais have experience – including e-commerce, since Tsai co-founded the Chinese tech giant Alibaba, and sports media.
AP reports that founders selected for the program will receive free office space and a 10-week immersion program on building successful businesses, with mentorship help from Visible Hands, Tsai’s investment firm Blue Pool Capital, and other partners.
“We want to show that investing in Black businesses makes money,” she said. “We want to show it’s good business.
“I think that you should just play with all the different arrows that you have in your backpack,” Wu Tsai said. “There’s so many levers. There’s not just one way to impact a community. I think you’re much more effective if you can use different methods to reach different people who need it.”
Although the timing of the announcement might strike some as a way to take some heat off the Nets current controversy involving Kyrie Irving’s promotion of an antisemitic video, Wu Tsai has a long record of social activism. She was among the founding partners — and a big financial contributor — of the Meek Mill-inspired REFORM Alliance. She and Joe in fact will be honored on Wednesday by the Municipal Arts Society for their work in philanthropy.
- Brooklyn Nets owners start program for minority-led startups - Glenn Gamboa - AP