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Greater Washington Partnership Blueprint Report

Access to Capital Community Wealth Generation & Thriving Entrepreneurship Ecosystems

Our 21st century financial system requires individuals to have a foundational understanding of how to navigate its formal mechanisms, from trusting and using banking services such as savings accounts, to managing personal credit. However, the system also relies on communities’ ability to access capital for personal and commercial purposes. Knowledge of and access to savings and wealth generation vehicles are important for creating an ecosystem where community members and entrepreneurs of any background can attain financial stability, and ultimately create cycles of financial prosperity.

Today, Black, Hispanic, and low-income communities disproportionately lack access to capital, which is key for building generational wealth. Nationally, white families hold eight times and five times more wealth, respectively, than Black and Hispanic families.118 Even among families with college degrees, white families hold 5.5 times and 3.5 times more wealth, respectively, than Black and Hispanic families. When it comes to securing home mortgage financing, borrowers of color face the greatest obstacles to buying a home. Black and Hispanic borrowers are denied mortgages at rates of 27.1% and 21.9%, respectively, compared to 13.6% for white borrowers.119 Furthermore, Black and Hispanic borrowers experience far higher denial rates across a wide range of loan types, including home purchase, home improvement, and refinancing. This inequity in obtaining financing for personal purposes has serious negative long-term consequences for individuals and families and hinders the building of generational wealth.

Inequities in borrowing extend beyond personal capital and into commercial financing. For business owners from historically underserved communities, unequal access to capital is pervasive, impacting small businesses seeking working capital and high-growth startups pitching for venture funding. According to the Federal Reserve, Black and Hispanic- owned businesses received their entire financing request in only 14% and 19% of cases, respectively, compared to

34% for white-owned businesses.120 Furthermore, as of 2020, oCapital Region has experiencednly 1% of venture capital-backed founders were Black and fewer than 2% were Hispanic.121 These discrepancies were exacerbated by the economic turmoil of the COVID-19 pandemic, as businesses run by individuals of color were more negatively impacted by the economic downturn and continue to face greater financial instability than businesses run by white entrepreneurs.122 The result of these financing inequities is a diminished ability for entrepreneurs of color to own and operate enterprises that can generate wealth for their families and communities.

Closing the equity gap requires education for all levels of understanding, from how credit and the banking system work, to making basic investment decisions, to launching companies as a means to long-term wealth generation. It is imperative that society supports underserved communities to better understand wealth-generating mechanisms, while also helping to make these mechanisms more equitable for everyone.

The following solutions explore ideas for fostering a more inclusive and productive environment for individuals, households, small business owners, and startup founders to equitably access financial education and capital. The goal of these recommendations is to help make the Capital Region a place where communities that have historically experienced challenges accessing economic opportunities, can achieve long-term financial prosperity.

Access to Capital
Community Wealth Generation & Thriving Entrepreneurship Ecosystems
  • Advance financial education and resiliency
    Solution 1 Advance financial education and resiliency Increase personal financial foundations and wellbeing within underserved communities

    To begin disrupting generational cycles of financial inequity, initial efforts should focus on equipping communities with foundational resources. These resources should relate to financial education, inclusion, and resiliency, with a long-term goal of wealth creation.

    By focusing on foundational knowledge, private, public, and social sector actors can empower historically underserved communities with the knowledge and understanding of how to navigate the financial system and thrive. Furthermore, cross-sector actors can fuel economic growth as more communities experience upward mobility and increase their demand for goods and services.

    These efforts can be accomplished by:

    • Championing and establishing financial education programs that provide guidance and/or counseling from childhood through adulthood

    • Promoting and investing in wealth-building programs and products including matched savings accounts

    • Considering the piloting and scaling of employee financial stability programs for times of crisis


    Recommendation 1 Financial Education Resources Champion and establish financial education programs that provide guidance and/or counseling from childhood through adulthood

    Financial education programs provide access to critical information and can instill helpful habits around money management, particularly for those with limited prior exposure to financial systems. Due to systemic barriers that have historically shut them out of family-sustaining careers and financial education, Black and Hispanic Americans score 33% and 25% lower, respectively, on average, in financial literacy assessments than their white counterparts.123 Financial education programs can prepare individuals to navigate roadblocks and decrease the likelihood that a person experiences economic distress–potentially helping minimize the 10+ hours per week that nearly 30% of Black and Hispanic Americans spend thinking about and managing personal finance issues.

    Employers should develop and expand upon the financial education resources they provide employees. According to the Consumer Financial Protection Bureau, employers stand to benefit from a return on investment (ROI) upwards of 300% from employer- sponsored financial education, counseling, and advising programs.124 These benefits come in the form of increased employee productivity, engagement, and retention, and reduced employee healthcare costs and absenteeism.

    Expected Impacts

    • Community: Financial education engagement can lead to increases in credit scores, reductions in payment delinquency, and improved physical/mental health, which can reduce healthcare costs for employees/employers125,126

    • Private
      Employers who offer financial counseling can avoid costs related to lost worker productivity and absenteeism; for a company with 10,000 employees, this equates to $3.3M in lost productivity per year with additional yearly losses of $166,000 in absenteeism127

      Employers who offer financial wellness benefits cite higher satisfaction with their total benefits program (61%) than those who do not (44%)128

    Efforts in Progress

    • Regional
      Bright Spots:
      Campaign of Maryland
      a nonprofit that empowers individuals with financial education, coaching, planning, tax preparation, and benefits screenings resources

    • Tzedek
       is a nonprofit that supports the financial health and legal rights of low-income and historically underserved communities by providing education on debt collection processes, credit management, scam avoidance, and more

    • National
      Bright Spots:
      EVERFI is a regionally-based education technology company that partners with companies and schools to teach financial education on topics spanning from personal finance to digital literacy Capital One’s

      & Life Program
      provides free financial planning and well-being resources to participants; resources include 1-on-1 mentoring, financial assessments, and workshops

    Implementation Considerations

    • Organizations should consider tailoring financial education offerings to the communities they serve (e.g., gaming formats for younger employees, multi-lingual offerings, diverse ability accessibility)

    • Financial education programs should extend beyond foundational financial education to include more complex financial topics, such as tax filing, insurance selection, reducing debt, higher education financial aid options, estate planning, and retirement saving

    • Employers can collaborate with financial education and community organizations (e.g., legal aid experts, debt counselors, tax preparers) to provide appropriate resources to their employees

    • Employers should consider conducting anonymous enterprise-wide financial well-being assessments to pinpoint employee financial education needs

    Recommendation 2 Wealth Creation Resources Promote and invest in wealth-building programs and products including matched savings accounts

    The ability to cultivate and maintain individual and household wealth is the cornerstone of creating the financial security needed to weather financial emergencies. Home ownership and stock equity gains are common pathways to wealth creation; however, systemic barriers have made these options less accessible for historically underserved communities. The gap between white and Black wealth across the Capital Region is striking: in Washington, D.C., the average white household has a net worth 81x that of the average Black household.7 In Baltimore, median household income for Black residents is 54% that of white residents, while one-third of households of color have zero net worth.129 And in Richmond, white households earn more than 40% median household income while Black households earn 53% less.130

    The private sector has a unique role to play in expanding employee and customer wealth generation. Employers can consider implementing programs such as employer-matched savings accounts, 401(k) retirement plans, and tuition reimbursement, which all support wealth creation. Further, by expanding initiatives such as community banking programs and digital banking services, the private sector can increase access to long-term wealth-building services, grow its customer base, and increase revenues.

    Expected Impacts

    • Community: Rethinking how individual credit scores are evaluated can open doors to wealth-generating financing for the 54% of Black and 41% of Hispanic individuals who report having no credit or poor-to-fair credit131

      Digital banking services can expand access to equity-building and investment services and offer little-to-no fees

    • Private
      By bringing wealth generation services to historically underserved populations, the private sector can spur additional investment and revenue from households with newfound capital assets

    Efforts in Progress

    • Regional Bright Spot: Wellthi is a regionally-based financial technology company that operates a social banking app that enables groups and communities to save together

    • National Bright Spots: JPMorgan Chase & Co. and Wells Fargo, among other banks, are partaking in Project
      , an Office of the Comptroller of the Currency program aiming to expand borrowing opportunities for individuals lacking credit histories; by focusing on account balances, the program seeks to increase approval chances for credit cards, mortgages, and other products132

    • MoCaFi
      is a mobile banking company that facilitates wealth creation in underserved communities of color by reporting rent payments to credit agencies to improve users’ credit profiles; the company also offers digital wealth-building tools and provides no-fee services

    Implementation Considerations

    • Lending institutions can consider alternatives to traditional credit reviews for assessing credit worthiness, accounting for rent and utilities payment histories where possible

    • It is important to consider disparities in digital access and education when designing digital financial services for underserved communities; actions should be taken to educate users on use cases, benefits, downsides, and security safeguards to help foster uptake of, and trust in, services

    • Instead of building tools/platforms from scratch, private sector organizations can consider partnering with financial technology companies to augment existing offerings

    Recommendation 3 Financial Resiliency Consider piloting and scaling employee financial stability programs for times of crisis

    Shifting employee expectations and global events such as the COVID-19 pandemic provide an opportunity for employers to rethink the role they play in supporting employee financial well-being and resiliency. 64% of Americans report living paycheck-to-paycheck, with 34% of these individuals struggling to pay their bills.133 The Federal Reserve found that more than one quarter of adults in the U.S. are either unable to pay their monthly bills or are one $400 financial setback away from being unable to pay them in full.134 One way to support employees is through Employee Assistance Funds (EAFs) which can provide emergency financial assistance in times of crisis.

    While banks play an important role in providing products and information that foster financial stability, employers are quickly becoming a platform for employee financial wellness. Research shows that workers frequently rely on their employers to offer guidance and resources needed to help them make better personal financial decisions.135 Such guidance and resource support can help prevent individuals from finding themselves in crisis situations to begin with. And while only 51% of employers believe they have a responsibility to help employees improve/maintain their financial wellness, 65% of Gen Z, 61% of Millennial, and 52% of Gen X workers believe their employers should shoulder that responsibility.136

    Expected Impacts

    • Community:
      Financially stable employees contribute earnings back into the local economy, are self-sufficient, and are better positioned to acquire long-term assets like real estate137

      Supporting financial resiliency improves employee personal health and reduces anxiety, allowing for greater worker productivity and retention126

    • Private
      Fostering employee financial resiliency yields a positive return on worker productivity; employees without financial stress are one-fifth as likely to be distracted at work and half as likely to miss work because of financial issues138

    Efforts in Progress

    • National
      Bright Spots:
      Maximus operates an Employee
      Assistance Fund
      which provides short-term assistance with basic living expenses in response to financial hardship caused by disasters or other personal hardships. America’s Charities manages the fund’s administration including final determinations on the amount of relief granted

    • Levi Strauss & Co. launched the Red


      Foundation to provide a financial safety net for employees and retirees experiencing unexpected financial emergencies. In addition to emergency grants, the program offers resources related to credit counseling, debt management, taxes, and information on avoiding predatory services

    Implementation Considerations

    • Employers that launch EAFs can partner with nonprofits to increase the scope of aid provided and lower logistical burdens; employers can receive tax-deductible benefits from such funds

    • Organizations can consider providing legal referrals, access to debt counselors, and education on predatory financial services, including payday loans and car title loansN

    • Employers should seek employee input on new programs or products to ensure they are responsive to employees’ greatest financial health needs as well as global/national economic conditions

  • Support underrepresented entrepreneurs & minority business enterprises
    Solution 2 Support underrepresented entrepreneurs & minority business enterprises Expand financial and social investments in underrepresented entrepreneurs and businesses

    For communities across the country, Main StreetO businesses serve as a bedrock for economic opportunity, employment, and community resiliency and identity. In Washington, D.C. alone, businesses with fewer than 50 employees make up over 95% of all business establishments.139 Furthermore, as a burgeoning innovation hub, the Capital Region is increasingly serving as a launchpad for founders to start, operate, and scale their high-growth businesses.

    Throughout the COVID-19 pandemic, small businesses– particularly those run by people of color–were hit hardest by the economic downturn. 93% of Asian-owned, 86% of Black-owned, and 85% of Hispanic-owned firms reported sales declines in 2020, compared to 79% of white-owned firms.122 By focusing on actions that support Minority Business Enterprises (MBEs)P and diverse entrepreneursQ as they recover, open, and scale business operations, the private sector can ensure that historically underserved communities are empowered with the funding and resources needed to run successful businesses.

    To ensure the viability of its diverse businesses and entrepreneurs, and to continue driving civic engagement and sustainable wealth creation opportunities, the region should focus on the following four key recommendations:

    • Making and fulfilling commitments to increase supplier diversity and provide resources to help businesses access contract opportunities

    • Identifying alternative credit application requirements and/or increasing the availability of no-cost and low-cost capital for MBEs

    • Increasing direct funding and internal capacity-building support for CDFIs and MDIs to facilitate more effective capital deployment in underserved communities

    • Investing directly in diverse entrepreneurs and/or supporting business coaching and network-building initiatives


    Recommendation 1 Supplier Diversity Make and fulfill commitments to increase supplier diversity and provide resources to help businesses access contract opportunities

    From consulting and professional services to materials procurement, organizations contract suppliers up and down the supply chain. However, recent figures estimate that while 85% of Fortune 100 companies have supplier diversity programs, only 10% of their expenditures go toward diverse suppliers.140,R

    In addition to diversifying the supply chain and increasing localization of product sourcing, which helps mitigate supply chain risk, supplier diversity networks foster increased market competition which increases product/service quality and decreases sourcing costs.141 Increased competition for diverse suppliers provides business owners who have been historically barred from market entry access to new customer networks and lines of business, leading to increased wealth generation opportunities. These expanded opportunities for client success stories are crucial for future customer acquisition and for securing additional investment.

    Expected Impacts

    • Community: Increased supplier diversity commitments create a more robust supply chain that circulates dollars back into the local economy

      For diverse business owners, more supplier contracts, technical skill-building, and coaching/mentorship can enable business growth and create inroads for expanded family/community wealth

    • Private
      Companies with long-term supplier diversity programs generate 133% greater return on investment than companies who source from their traditional suppliers142

      Companies with supplier diversity programs spend 20% less on overall procurement costs–every $1M spent on diverse supplier procurement generates $3.6M in revenue142

    Efforts in Progress

    • Partnership Bright Spot: As part of the Partnership’s March 2022 $4.7B


      alongside Vice President Kamala Harris, Secretary of Commerce Gina Raimondo, and SBAS Administrator Isabella Guzman, Partnership organizations committed $2.6B to prioritized procurement spend with Capital Region underrepresented communities and MBEs. Additionally, the Partnership hosts a quarterly Supplier Diversity Leadership Roundtable series that convenes procurement leaders to share learnings, playbooks, and best practices

    • Regional Bright Spot: Exelon
      Diverse Business Empowerment

      is Exelon’s flagship program supporting supplier diversity. In 2020, the program invested $2.7B in total diversity-certified supplier expenditures–a 13% increase from 2019–which drove $3.4B in incremental supplier revenues and $990M in incremental tax revenues while supporting over 19,000 jobs143

    • National Bright Spot: AstraZeneca launched a Lead in Sustainability Accelerator for Black women-owned businesses with the Women’s

    Implementation Considerations

    • Organizations should assess and consider revising internal procurement protocols/requirements to streamline or remove practices that create barriers for MBEs (e.g., “preferred” supplier designations, insurance provisions, procurement contract bundling)

    • Employers can institute supplier diversity metrics in performance
      evaluations of business unit leaders
      and budget owners to incentivize prioritization of diverse supplier contracts

    • Organizations can partner with supplier diversity groups and certification agencies (e.g., co-sponsoring accelerator and mentorship programs) to expand and deepen MBE supplier relationships

    • Businesses should consider investing in mentorship/coaching efforts; programs should support diverse suppliers with their unique pain points (e.g., certification, Request for Proposal processes)

    • Private sector organizations can collaborate with MBE enterprise partners in go-to-market alliances to complement one another’s services; such alliances can support MBEs in quickly scaling operations

    Recommendation 2 Borrower Accessibility Identify alternative credit application requirements and/or increase the availability of no-cost and low-cost capital for MBEs

    For many entrepreneurs, expanding business operations typically requires borrowing from financial institutions. However, small business entrepreneurs of color are approved for loans at lower rates than their white counterparts. Even when financing is provided, entrepreneurs of color tend to receive smaller loans than requested and face higher interest rates.145 These discrepancies can often be attributed to lending practices that prioritize credit scores and available credit limits instead of payment histories.146 Complicating the matter is the fact that many small businesses do not separate personal and business credit expenses: nearly half of small business owners use personal credit cards for business and nearly half do not know they have a business credit score.147 Consequentially, personal credit profiles often leak into business credit assessments. Further, viable MBEs that may seek smaller amounts of capital are frequently overlooked by lenders who prioritize businesses seeking larger loans due to lower transaction costs.146This practice can put otherwise qualified MBEs in a position where they cannot secure capital to operate or expand their businesses.

    According to the Federal Reserve, Black and Hispanic-owned businesses received
    their entire financing request in only14% and 19%
    of cases, respectively, compared to 34% for white-owned businesses

    In addition to increasing availability of direct no-cost and low-cost capital for diverse entrepreneurs, various actors across the private sector can address these disparities by considering alternative data in credit worthiness assessments. Alternative data can include rent, utility, and telecom payment histories, as well as personal cash flows. Some organizations have already begun engaging non-traditional credit checks to make no-cost and low-cost capital more accessible for the 45 million Americans lacking a credit score and for the 31% of Black, 28% of AAPI, and 26% of Latinx business owners who lacked business banking pre-pandemic.148,149

    Expected Impacts

    • Community:
      Consumers experienced an average credit score increase of nearly 60 points when rent payments were included in their credit file; 9% of these consumers went from unscorable to scorable and 12% of consumers shifted to a higher score tier150

    • Private
      Including cash flow data in small business owner credit profiles can provide more complete credit data, reduce transaction costs, and quicken the processing of small business lending151

      Expanding lending to a broader group of potential borrowers seeking capital can be an opportunity to extend financial services/products into unbanked and underbanked communities

    Efforts in Progress

    • National Bright Spots: LendingClub, the country’s largest online credit marketplace, partnered with

      Opportunity Fund, a leading CDFI lender, and

      Funding Circle, a leading small business loan platform, to increase small business owner access to affordable credit options152

      The Capital
      Access Lab
      , launched by the Kauffman Foundation and ImpactAssets, is a pilot initiative that provides risk capital to new investment models that do not resemble traditional venture capital or lending in underserved communities

    Implementation Considerations

    • Alternatives to traditional lending models can include revenue-based financing,T equipment financing,U and peer-to-peer lendingV

    • Private sector organizations can consider joining partnerships with credit reporting agencies to share information on consumer payment histories to inform credit reports153

    • Private sector organizations should be mindful of alternative data usage transparency, data privacy risks, and underwriting models that correlate data with protected characteristics (e.g., race, gender)148

    Recommendation 3 Funding & Capacity-Building for Community Development Financial Institutions (CDFIS) & Minority Depository Institutions (MDIS) Increase direct funding and internal capacity-building support for CDFIs and MDIs to facilitate more effective capital deployment in underserved communities

    CDFIs and MDIs often have deep understandings of the communities they operate in; these financial institutions have a mission and mandate to provide capital and technical assistance to populations that have been historically underserved. As a result, CDFIs and MDIs provide impactful lending programs for communities to access affordable financial capital.154

    According to the Federal Reserve, more than 75% of CDFIs indicate they are unable to provide all the services they would like to offer on a sustained basis; the largest reported barriers to providing these services are staffing (68%) and capital (58%).155 Organizations should consider establishing or strengthening relationships with CDFIs and MDIs to support them financially and through capacity-building technical support, including professional mentorships, technology assistance, or staff secondments. In doing so, the private sector can better equip these institutions to connect underserved communities to financial capital.

    Expected Impacts

    • Community: Providing capital in historically underserved communities creates pathways for starting businesses, investing in home ownership, and creating generational wealth

      Building CDFI/MDI capacity allows for more effective capital deployment in historically underserved areas and supports increases in financial education, business training/mentorship, and strengthened relationships between community lenders and borrowers

    • Private
      Every $1 investment in CDFIs catalyzes $8 more in private sector investment, according to the U.S. Treasury Department156

    Efforts in Progress

    • Partnership Bright Spot: As part of the Partnership’s March 2022 $4.7B
      to Shared Prosperity
      , alongside Vice President Kamala Harris, Secretary of Commerce Gina Raimondo, and SBA Administrator Isabella Guzman, Partnership organizations directed $619M to CDFIs and MDIs

    • National Bright Spots: Kaiser Permanente made a joint $60M investment with
      LISC–each contributing $30M–along with an additional $40M contribution in grants to support low-cost financing for underserved entrepreneurs in the wake of the COVID-19 economic crisis157

    • The
      Opportunity Finance Network (OFN) is a national network of 350 CDFIs that amplifies the voice and impact of CDFIs nationwide, while also serving as a fund-of-funds manager/intermediary with roughly $1B of assets under management

    Implementation Considerations

    • Businesses can finance CDFIs/MDIs through co-investments, charitable grants to build equity capital, equity equivalents (EQ2s) that function as long-term debt instruments, and stock-issued equity capital158

    • Capacity-building support can be technical or non-technical in nature, and includes providing financial training, developing loan- processing systems, refining underwriting standards, providing administrative services, and assisting with fundraising158

    • Where possible, funding for CDFIs/MDIs should explore innovative lending strategies and partnership models to ensure communities most in need of capital and micro entrepreneurs are receiving it

    • Organizations that plan to support CDFIs must work closely with them to ensure reporting and other administrative requirements are not causing undue burden

    Recommendation 4 Funding & Capacity Building for Diverse Entrepreneurs Invest directly in diverse entrepreneurs and/or support business coaching and network building initiatives

    Diverse entrepreneurs–from micro entrepreneurs to Main Street business owners to startup founders–have historically faced greater barriers in accessing business support programs that offer mentorship, resources, and networking opportunities. Without longer-term capacity-building and access to professional networks, diverse entrepreneurs are excluded from learning opportunities such as coaching from experienced entrepreneurs, introductions to funders, and other types of long-term support. Cross-sector organizations can take action to support the entire spectrum of capital and resource needs of diverse businesses of all sizes and types.

    Social capital is of paramount importance to growing a small business–more than 83% of entrepreneurs cannot access traditional loans or venture capital.159 In 2021, Black and Hispanic founders received only 3.5% of total U.S. venture funding–up from an average of 2.5% over the previous five years.160 Further, Black entrepreneurs start their businesses, on average, with $35,000 of capital, compared to $107,000 for white entrepreneurs, meaning Black founders take on more debt and have less to invest in their business.161 While diverse founders often find it difficult to access entrepreneurship resources and networks, lack of diversity is pervasive on the investment side as well–only 7% of venture capital leaders are Black or Hispanic.162 The private sector can continue promoting capacity-building, technical expertise, and network expansion initiatives to support diverse business owners/founders while also leading efforts to diversify the investment landscape itself.

    Expected Impacts

    • Community:
      Main Street businesses reinvest nearly 50% of revenue into the local economy and community, compared to 14% from large chains163

      Nationally, 19.7 million additional jobs would be created and an $5.9T in additional revenue would be generated if the number of Black businesses matched the population size, if employees per firm matched that of non-Black businesses, and if the revenue of those firms matched revenue of non-Black businesses164

      Four million new jobs and $981B in revenue would be generated if the average revenue of all firms owned by women of color matched that of businesses owned by white women165

      Business coaching can support business survival; 70% of mentored businesses survive longer than five years compared to 35% for non-mentored businesses166

    • Private
      Early-stage investments in Black and Hispanic founders can increase annual growth of diverse startups by 20% and create 170,000 tech job openings nationwide167

      67% of businesses experience increases in productivity due to mentorship, and 55% of businesses feel that mentoring positively affects profit168

    Efforts in Progress

    • Regional Bright Spots: The
      JWC Foundation
      is a Richmond- based entrepreneurship hub of 160+ members that connects Black business owners to networks and resources that support business growth, including industry-specific events, a mentorship network, collaboration space, and financing opportunities

      The Clark
      Construction Strategic Partnership Program (SPP)
      focuses on increasing the ability for small, Black/Hispanic/AAPI, women, and veteran-owned businesses to position themselves for large-scale construction contracts across eight markets, including Washington, D.C. and Baltimore. At the time of publication, the company has invested $1.2B in contracts in the program’s 1,200+ alumni169

    • Halcyon is a local nonprofit that supports impact-driven startups with non-dilutive funding, residence, coaching, and consulting resources. To date, Halcyon has supported over 300 companies that have collectively raised $350M+ and created over 3,000 jobs. 40% of its companies are DMV-based, 59% of its founders are female, and 69% have a founder of color

    Implementation Considerations

    • Businesses can partner with ecosystem drivers (e.g., nonprofits, entrepreneurship organizations, industry coalitions) to better support entrepreneurs / micro entrepreneurs and promote expansion of spaces where they collaborate, ideate, and network including: incubators, accelerators, and makerspaces (e.g., wet labs, test kitchens, 3D printing workshops)

    • Capacity-building efforts and investments can include coaching, trainings, workshops, scaling programs, and advocacy tools (e.g., resources to transition from tenant to landlord)

    • Organizations can consider sponsoring diverse entrepreneurs and micro entrepreneurs seeking to pursue executive education programs to build their professional credentials, skillsets, and networks

    • Organizations seeking to support diverse entrepreneurs and businesses must recognize the large variance of needs that exist for companies of different sizes and at different levels of maturity

  • Support entrepreneurship ecosystem connectedness
    Solution 3 Support entrepreneurship ecosystem connectedness Enhance coordination and allocation of regional resources

    Successful entrepreneurship ecosystems seamlessly connect intellectual, creative, and financial capital and infrastructure to enable entrepreneurs to test, launch, and scale their companies. For high-growth entrepreneurs who are not embedded in traditional networks, understanding and navigating the complex web of ecosystem resources and networks can be challenging; this is especially true for diverse business owners.

    Highlighting existing resources and better connecting business owners and founders to these resources will enable the Capital Region to continue growing, attracting, and retaining high-growth businesses which will further attract investment, jobs, taxpayers, and wealth creation opportunities.

    To continue creating a more inclusive ecosystem where all high-growth entrepreneurs can build, launch, and scale successful companies, leaders across the region should focus on the following key areas:

    • Assessing, aggregating, and promoting the landscape of public/private resources including funding, programs, physical spaces, and networks that exist across the region

    • Supporting efforts that identify and catalyze existing and potential high-growth industry clusters

    • Exploring public/private co-investment strategies to de-risk and incentivize private investment in key industries


    Recommendation 1 Entrepreneurship Ecosystem Mapping Assess, aggregate, and promote landscape of public/ private resources including funding, programs, physical spaces, and networks that exist across the region

    At present, local entrepreneurs face challenges understanding the region’s existing landscape of funding, resources, and networks. While Washington, D.C.’s startup ecosystem ranks number eleven globally and scores highest on “Market Reach” and “Talent,” its lowest performing indicators are “Connectedness” and “Knowledge.”170,X Without a singular source to find and promote existing resources available to the region’s 1,300+ startups, the region will face challenges attracting and retaining founders and funders– especially among underrepresented groups.

    By mapping the region’s startup ecosystem resources–such as angel, venture, or grant funding, accelerators and incubators, founder and developer networks, and other entrepreneurship tools–the business community can elevate the Capital Region’s status as a leading entrepreneurship hub. In doing so, businesses can ensure that regionally-based startups can reach their full growth potential and that the region can attract future investment and new entrepreneurs. While multiple resource and network mapping efforts are currently in-flight at the sub-regional level, actors across the region should take steps to connect and align these efforts to minimize duplication at the super regional level.

    Expected Impacts

    • Community: Mapping and better connecting startup resources can foster an ecosystem that attracts investment and startup relocations which increase regional innovation, expand the talent pool, create jobs, and increase wealth generation

    • Private
      Understanding the entrepreneurial ecosystem can support the analysis of potential investments in diverse businesses, including an assessment of diverse suppliers

      Mapping and better connecting the entrepreneurship ecosystem can facilitate investment/venture dealmaking, company fundraising, and successful startup exits

    Efforts in Progress

    • Regional Bright Spots: The Maryland
      Entrepreneur Hub
      provides 2,000+ resources for entrepreneurs to identify funding, networks, maker spaces, and more across the state

      DC Startup Week is a community of 10,000+ of the region’s entrepreneurs. Throughout the year, the organization facilitates learning and information-sharing events, culminating in a yearly convention

    • National Bright Spots: StartupSac
      is a nonprofit dedicated to accelerating Sacramento’s innovation ecosystem; it has mapped out the region’s entrepreneurship ecosystem to better connect its resources and talent. Partnership member Ernst & Young (EY) is a sponsor of the organization

    • Entrepreneur
      Quarterly (EQ)
      maintains a comprehensive Startup Ecosystem Map to diagram resources, spaces, funding sources, and networks across Greater St. Louis

    Implementation Considerations

    • Opportunity exists to build on and consolidate existing resources and localized mapping efforts for entrepreneurs at the super regional level

    • An effective ecosystem map will highlight the diversity of available capital and network resources that exist across the region to help connect diverse founders to the appropriate tools

    Recommendation 2 High Growth Industry Clusters Support efforts that identify and catalyze existing and potential high growth industry clusters

    Clusters are concentrations of interrelated organizations of a particular industry in a geographic area.171 They are influenced by local assets and the presence of complementary institutions and infrastructure that help optimize productivity and operational efficiency, facilitate commercialization, and stimulate innovation. In the Capital Region, industry clusters related to biotechnology, cybersecurity, and education technology have helped diversify the region’s economy. These existing clusters, along with emerging clusters such as pharmaceuticals and clean energy, employ a sizable population, attract investment, and foster an innovation-oriented ecosystem.

    Private sector players can help nurture the region’s most promising industries for growth by collaborating with cross-sector partners, including academic institutions and think tanks, who have a deep understanding of the regional economic landscape. Through collaboration, the region can foster a more diversified and competitive economy capable of weathering future economic downturns.

    Expected Impacts

    • Community: Identifying regional high-growth industries can guide cluster development, increase regional investment, and connect diverse talent to high-wage careers.

      Diversifying regional industries enhances economic resiliency – mitigating the severity and duration of economic shocks – by spreading out the region’s economic dependence for growth and stability across multiple industries172

    • Private Sector: Regional industry diversification increases long-term economic productivity and stability for businesses of all sizes by allowing them to complement one another’s growth and innovate together172

    Efforts in Progress

    • Regional Bright Spots: More than 70% of United States active pharmaceutical ingredients (API) manufacturing facilities are located overseas, which creates a large risk to the medical supply chain.173 The Alliance
      for Building Better Medicine
      , led by

      , is building a globally competitive manufacturing accelerator and ecosystem in the Richmond-Petersburg metro area. The Alliance is leading the county’s efforts of reshoring manufacturing of APIs while catalyzing inclusive economic growth and connecting diverse pharmaceutical talent throughout the region

    • The James Webb Space
      project is the most sophisticated telescope launched into space on record; its success highlights the robustness of the region’s aeronautical/space industry cluster. Primarily managed by NASA’s Goddard Space Flight Center (GSFC), project partners include Partnership organizations Northrop Grumman, Johns Hopkins University, and the University of Maryland. Other regionally-based partners include Lockheed Martin, the Space Telescope Science Institute (STScI), and other cross-sector players from across the globe

    Implementation Considerations

    • By prioritizing cluster-based economic development strategies in high-growth industries, private, public, and social sector organizations can share and exchange resources, including physical infrastructure, best practices for talent attraction and retention, and funder networks174

    • Organizations can use mapping analysis of high-growth industries as a starting point for cultivating and directing investment to diverse founders

    Recommendation 3 Public-Private Funding Models Explore public/private co-investment strategies to de-risk and incentivize private investment in key industries

    Strategically blending public and private funding can catalyze additional investment and spur new economic opportunities. By leveraging public capital, blended finance models can mitigate the perceived risk associated with private investment in emerging industries and among historically underserved entrepreneurs.175 Emerging industries often have an unproven track record and longer return horizons, while underserved entrepreneurs may have limited social networks that hinder their ability to source funding, particularly in the early stages.

    Private sector leaders can more proactively engage with public and social sector actors to identify co-investment opportunities to unlock catalytic capital. Public-private financing models can increase the aggregate number of bankable projects, expand funding availability for underrepresented markets, involve new investors and skillsets in market-ready projects, and free up public capital deployment for other development projects.

    Expected Impacts

    • Community: Public-private funding can expand the capital available for nascent industries and historically underserved entrepreneurs that might otherwise be denied due to perceived risk175

      Positive economic impacts and wealth creation driven by increased employment and investment from newly funded ventures.

      Improved resource allocation from public dollars being spread to a greater number of initiatives175

    • Private
      Minimized lending risk and expanded pool of industries/entrepreneurs seeking funding175

    Efforts in Progress

    • National Bright Spots: Empire
      State Development’s New York Ventures
      program has dedicated $100M of direct investment in diverse entrepreneurs alongside private investors in Seed and Series A rounds. The public fund focuses on high-growth companies working in emergent fields, such as life sciences, climate technology, agriculture technology, and Artificial Intelligence

    • The California
      Rebuilding Fund
      is a blended financing structure that launched from the California
      Small Enterprise Taskforce
      , a consortium of legal, financial, and nonprofit professionals that came together to support small businesses during the COVID-19 pandemic. The fund is composed of cross-sector actors who harness public, private, philanthropic, and foundation monies for direct investment–via a network of CDFIs–into historically underserved businesses

    • Smart
      is a region-wide smart city initiative co-led by the City of Columbus and the Columbus Partnership, a nonprofit civic alliance composed of the region’s 75 largest private sector employers. Collectively, private sector partners committed to investing $90M in an Acceleration
      if Smart Columbus was selected as the winner of the 2016 U.S. Department of Transportation Smart City Challenge. The Acceleration Fund was a key reason Smart Columbus won the Challenge and the organization is currently working towards its goal of galvanizing $1B in smart city investments throughout the Columbus region, focusing on mobility initiatives that enhance the connectivity, sustainability, safety, and economic prospects of the region

    Implementation Considerations

    • Funders should consider additional investment opportunities to bolster and build capacity for the supporting ecosystem actors (e.g., CDFIs/MDIs, nonprofits, industry groups)

    • Cross-sector actors should adapt financing terms (e.g., length, interest rates, funding vehicle) and approaches to the local context to best meet the funding needs of emerging industries and historically underserved entrepreneurs

Case Study: JPMorgan Chase

JPMorgan Chase Commits $350M to Grow Black, Latin, and Women-owned Small Businesses

In February 2021, JPMorgan Chase & Co. (JPMC) committed $350M to grow underserved small businesses as part of its $30B commitment to expand economic opportunity in underserved communities by harnessing its business, policy, data, and philanthropic expertise.

JPMC’s commitment seeks to reduce capital access barriers and economically empower underserved communities of color through:

Low-Cost Loans and Equity Investments

More than 40% of the commitment will be low-cost loans and equity investments, including a $42.5M investment to expand the Entrepreneurs of Color Fund, in conjunction with the Local Initiatives Support Corporation (LISC) and a network of CDFIs

Policy Solutions

Releasing data-driven policy solutions through JPMC’s PolicyCenter to improve SBA programs, including Community Advantage and Small Business Investment Company (SBIC) programs


Building capacity for diverse-led nonprofits, including the signature Ascend program, to provide underserved entrepreneurs with business education, consulting services, and partnerships with regional and statewide corporate partners

Case Study: Upsurge Baltimore

UpSurge Baltimore is a nonprofit accelerator focused on making Baltimore the country’s first EquitechV city and a place where founders from all backgrounds, sectors, and stages can successfully launch an enterprise. It is also an investment engine that partners with organizations to make Baltimore a global platform for attracting knowledge-economy companies, quality jobs, and pathways to prosperity.

UpSurge Baltimore executes its mission by:

  1. Anchoring in a singular Equitech ecosystem vision: UpSurge aligns voices from across Baltimore’s entrepreneurship ecosystem on a common vision
  2. Focusing on Baltimore founders and companies: UpSurge supports locally based founders in overcoming their obstacles, and fostering a local network of partners, peers, mentors, and customers
  3. Attracting companies, capital, and talent: UpSurge engages in direct outreach to companies and investors; supporting joint accelerators to attract high-potential startups to Baltimore

The organization works with an ecosystem of cross-sector partners, including Partnership organizations such as Johns Hopkins University and T. Rowe Price.

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