LACI launches $6M fund for underrepresented founders
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.