The Plight of the DC Tech Entrepreneur: Entrepreneurs from low-wealth communities in Washington, D.C. have particularly limited access to resources. Income equality is worse in Washington, D.C. than any other state in the nation: The top 10% of earners make at least 6 times than the bottom 10%.
Yet DC ranks as #1 for best tech city for women for the third consecutive year, with females making up 41 percent of D.C.’s tech workers — well above the national average of about 26 percent and higher than all other cities in the personal finance website’s top 15. It also has more women in computer- and math-related positions than most other U.S. cities.
Of the $56.8B poured in 4,520 VC deals across the US in 2016, DC represents 4.6% of this total dollar amount, up 26% from last year. The jump in dollars came in 176 deals, 10 fewer than the year before, distorted by a $1.6B Q4 investment in OneWeb. So why is it that we aren’t seeing more companies from DC raising institutional funding to scale their innovations?
We found that there are tech-based entrepreneurs in DC but they struggle to raise capital and lack the disposable income individually and among family and friends to bootstrap their companies to the viability needed to warrant VC funding. Generally in a given ecosystem, angel investors are willing to take risks on very early businesses and founders. What we found in the DC ecosystem is that while there are angel investors who are interested in connecting with under resourced founders, they do not have a systematic way of connecting with companies outside of their angel networks and have varying levels of knowledge to independently evaluate investment readiness even if accessibility was not an issue.
In order to invest in more innovative solutions, we need to focus on new tools and support resources that allow the market to more effectively support overlooked and undervalued companies. These companies are not developing effectively due to a lack of access to early-stage capital and the resources to promote growth and scale. Through our last eight years of operation, supporting and investing in entrepreneurs around the world, Village Capital has learned there is an acute need to focus on connecting entrepreneurs, even earlier in the pipeline, with capital within their city, before preparing for national scale.
Village Capital Pathways launched as a pilot in DC to support under-represented founders building high-growth ventures. We understand that startups from overlooked regions and with diverse founders struggle to secure investment funding. This program will connect selected founders to local capital and resources to scale their businesses.
This will happen in a number of ways:
Exposure to our Venture Investment Readiness Awareness Level (VIRAL) Curriculum
Selected companies will be supported by our VIRAL curriculum, where they will learn how to set and surpass milestones in order to begin validating their ventures with investors to best position them to obtain the capital they need most. Over the course of three months, we will support selected startups with tailored engagements with potential strategic partners and investors, and deep collaboration within the cohort.
Facilitate Connections to Angel Investors and local Entrepreneur Support Organizations
Startups often rely on friends, families and angel investors as their first source of capital to scale high-growth companies. We will facilitate these relationships through:
- Dedicated support from Melissa Bradley, Founder/Director of Project 500. She will act as the main point of contact for each company and facilitate tailored engagements to meet the needs of the cohort.
- Pre-committed angel investors and mentors who are looking to partner with selected companies
- Formal and informal interactions with these stakeholders through one-on-one meetings, business development sessions and an investor dinner where entrepreneurs will be able to highlight their milestone achievements
- Startup Heat Map, a roadmap for monetary and in-kind resources in each city for every funding level
We will also provide resources for building your business including:
Amazon Web Services: 2 years of AWS credits (up to $5000)
Kiva Zip: Automatically qualify for a 10,000 interest-free Kiva Zip Loan
Hubspot for Startups: 90% scholarship on all paid HubSpot software for 12 months