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LACI launches $6M fund for underrepresented founders

Illustration of a Black woman stepping up stairs made of stacks of cash.

Illustration: Aïda Amer/Axios

The Los Angeles Cleantech Incubator is launching a green-loan program for Black, brown and female founders of early-stage startups.

Why it matters: The program is funded through a $6 million pool of capital and is a step toward increasing funding to this group of founders, where VC money is in short supply.

  • Startups with a founder who identified as Latino received 2% of startup venture funding last year, according to Crunchbase. That was the same amount that went to female founders, Bloomberg reported.
  • Venture funding for Black-led startups was 3% of the 2020 total, according to Reuters.

What's happening: The LACI Cleantech Debt Fund will offer loans of $25,000 to $250,000.

  • It will aim to back about 100 early-stage startups over five years.
  • Unlike traditional bank loans, the fund won't require personal collateral or credit scores in underwriting.

Of note: Sobrato Philanthropies and Homecoming Capital are anchor investors.

  • The Wells Fargo Foundation provided a grant to cover initial operating costs and loan loss reserves.
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