Starbucks' Schultz creates $100M diverse biz fund
The family foundation created by Starbucks founder Howard Schultz and his wife plans to invest $100 million in a fund targeted toward “diverse businesses as vehicles for fostering a more inclusive economy,” the organization announced early Tuesday.
- The Entrepreneurs Equity Fund (EEF) will provide money to business creators from marginalized communities, making direct investments in diverse businesses and boosting access to capital.
Why it matters: Traditionally, business startups led by Black and Latino entrepreneurs have had a difficult time raising funds. While the problem has improved in recent years, founders of color obtain a slim fraction of the estimated hundreds of billions in available equity financing.
- On Tuesday, Cosmetics giant Ulta Beauty also announced an accelerator initiative for brands founded by people of color.
Given that diverse businesses have “the potential to be a powerful way to increase economic and social outcomes for historically disadvantaged communities,” the EEF also plans to dole out grants to boost mentorship, training and research for the founders it funds.
What they’re saying: “America’s future rests on our entrepreneurial fire. But in recent years, the spark within many entrepreneurs has struggled to find the oxygen to burn bright,” Schultz said in a statement.
- “The causes are many: predatory practices, lack of access to capital and social networks, the need for learning and community, and the systemic failures that lead some to not even try,” he added.
Thought bubble: Schultz, who returned to the helm of Starbucks in April after the sudden retirement of Kevin Johnson, is planning to relinquish the top job sooner rather than later.