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Illustration: Aïda Amer/Axios

SoftBank COO Marcelo Claure said in a letter to employees early Wednesday that the firm will create a $100 million fund that "will only invest in companies led by founders and entrepreneurs of color."

Why it matters: The Opportunity Growth Fund is one of the first to put significant capital behind companies' statements of empathy and outrage in response to protests over systemic racism in the U.S. typified by the killings of George Floyd, Breonna Taylor and other African Americans by police.

  • It immediately makes SoftBank a leading presence in the impact investing space dedicated to backing businesses owned and operated by people of color.

What they're saying: "The Opportunity Growth Fund will be the biggest fund providing capital to black Americans and people of color," Claure said in the letter. "We believe in this investment strategy, and we believe in these founders."

The big picture: The fund could mark a sea change from talk to action for well-heeled financial institutions.

  • Bank of America announced a $1 billion four-year program to "address economic and racial inequality" that will target people of color by funding initiatives including virus testing, support for minority-owned small businesses and investment for affordable housing.
  • JPMorgan, Citi, Wells Fargo and other major U.S. banks have released statements condemning racism and supporting diversity efforts, but none have yet announced similar projects or investment.

Where it stands: The fund will invest in "companies that use technology to disrupt traditional business models," and will donate an unspecified portion of gains from the fund’s investments to organizations focused on "creating opportunities for people of color."

  • 50% of the gains from the fund's investment will go toward future programs with similar aims.
  • SoftBank said it "will not take a traditional management fee" on the Opportunity Growth Fund.

Yes, but: The fund has not yet identified any companies or dedicated any capital, the spokesperson said.

  • SoftBank is in the midst of a public relations battle after announcing earlier this year it would sell off $41 billion in assets and facing a wave of criticism from investors over money-losing investments in WeWork, Uber and others.

Between the lines: The letter also announced the creation of a diversity and inclusion program, admitting the company needs to "do better at hiring underrepresented groups for open roles at SoftBank and our portfolio companies — especially for leadership and board seats."

The players: Prominent black Silicon Valley executives Stacy Brown-Philpot, CEO of TaskRabbit, and Paul Judge, co-founder of TechSquare Labs and Pindrop, will serve as "founding members" and "fund advisors," a SoftBank spokesperson told Axios.

  • The two will serve on an investment committee with Claure.
  • Investing will be overseen by Shu Nyatta, a managing partner who works on the company's Innovation Fund, and run by managers at SBGI.

The bottom line: "Founders and entrepreneurs of color have so much potential, but they face unfair barriers that white founders don’t face," Claure wrote. "This is our opportunity remove those barriers for a new generation of founders."

Editor's note: This story was corrected to say that Stacy Brown-Philpot and Paul Judge will serve on an investment committee, changing an earlier version that said they would not be involved in investment decisions. The change is based on a clarification from a SoftBank spokesperson.

Go deeper

Axios roundtable on small business

On Thursday, September 24 Axios' Sara Fischer and Dan Primack hosted the first in a series of three virtual roundtables, featuring business leaders, innovators, and policy experts to discuss how small businesses have adapted to the COVID-19 economy, the role of digital tools, and the path forward.

Moderators highlighted a study recently by Connected Commerce Council that showed 93% of small businesses were affected by coronavirus in loss of revenue, loss of customer base, the inability to use brick and mortar facilities, or access to staff. Attendees unpacked small business needs in a time of crisis, the impact of the Paycheck Protection Program, and broader trends in entrepreneurship.

Trevor Parham, founder and director of Oakstop and co-founder of the Oakland Black Business Fund discussed how capital buys small businesses time to make better informed decisions:

  • "A big part of what businesses need is not just the capital and not just the education, but it's the resource of time...A big part of what businesses are lacking at the small business level, especially minority businesses, is they don't have the runway to contemplate what they want to do as their next strategic move where some other businesses might."

Aerica Shimizu Banks, founder at Shiso LLC highlighted the specific needs of Black and minority owned businesses:

  • "The SBA and government agencies are somewhat limited in targeting by race and therefore create race blind policies that have the unintended consequences of sometimes cementing inequity in the distribution of resources and loans."
  • "There is also a strong story of resilience here for business owners of color, for women-owned businesses, that despite these challenges in the midst of this crisis, what we're seeing is that particularly business owners of color have been making the best of this pandemic in converting to digital."

Sery Kim, assistant administrator at the US Small Business Administration, Office of Women's Business Ownership discussed the most common obstacle for women starting their own businesses.

  • "The number one barrier for women being entrepreneurs is not access to capital. It is childcare."

Emilia Dimenco, Women's Business Development Center president and CEO on what small businesses need during economically turbulent periods:

  • "They really need technical assistance. A large corporation would hire a major consulting firm to help them pivot, help them through a major change. A small business can't do that. [They need] quality advisory services, and financial and business acumen."

Thank you Google for sponsoring this event.

Scoop: Gina Haspel threatened to resign over plan to install Kash Patel as CIA deputy

CIA Director Gina Haspel. Photo: Win McNamee/Getty Images

CIA Director Gina Haspel threatened to resign in early December after President Trump cooked up a hasty plan to install loyalist Kash Patel, a former aide to Rep. Devin Nunes (R-Calif.), as her deputy, according to three senior administration officials with direct knowledge of the matter.

Why it matters: The revelation stunned national security officials and almost blew up the leadership of the world's most powerful spy agency. Only a series of coincidences — and last minute interventions from Vice President Mike Pence and White House counsel Pat Cipollone — stopped it.

Updated 3 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: Coronavirus deaths reach 4,000 per day as hospitals remain in crisis mode — CDC warns highly transmissible coronavirus variant could become dominant in U.S. in March.
  2. Politics: Biden says, "We will manage the hell out of" vaccine distribution — Biden taps ex-FDA chief to lead Operation Warp Speed amid rollout of COVID plan — Widow of GOP congressman-elect who died of COVID-19 will run to fill his seat.
  3. Vaccine: Battling Black mistrust of the vaccines"Pharmacy deserts" could become vaccine deserts — Instacart to give $25 to shoppers who get vaccine.
  4. Economy: Unemployment filings explode againFed chair: No interest rate hike coming any time soon —  Inflation rose more than expected in December.
  5. World: WHO team arrives in China to investigate pandemic origins.

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