Only 1 percent of all venture capital-funded founders are Black, less than half of 1 percent are Latinx and only 8 percent are women of any demographic group. Delaware’s revamped Startup302 pitch competition will focus on these underrepresented founders to tackle such funding inequities and strengthen the regional startup community.
According to Ariel Gruswitz, director of innovation at Startup302 sponsor Delaware Prosperity Partnership (DPP), technology-enabled startups with at least one founding team member from an underrepresented group may apply. To complement the profile of Delaware’s landscape, she said, those working in bioscience, chemistry, advanced materials, agriculture, financial/business services and the up-and-coming esports industry are especially encouraged to participate.
“Innovation thrives when diverse perspectives are fostered and included,” Gruswitz said. “Startup302 aims to improve access and equity across the First State’s innovation ecosystem.”
Garry Johnson III, founder of the First Founder’s Accelerator and a member of the Startup 302 Steering Committee, agreed.
“Delaware has a unique opportunity to position itself as a leader of inclusive and equitable innovation,” Johnson said, “and I’m excited to contribute to collaborative efforts like these that attract diverse communities of founders to the region.”
Growing a Diverse and Inclusive Startup Community in Delaware
Within the startup venture capital community, underrepresented founders are those in whom the venture capital industry, as a whole, underinvests relative to their demographic’s percent of overall United States population. Underrepresented founders include women, as well as people of color, including African Americans, Latin Americans and those of Native American descent. Underrepresented founders often face hurdles when pursuing angel investment and traditional bank financing, too. Furthermore, only about 5 percent of all venture capital investors are Black or Latinx.
Before seeking venture capital, angel or bank backing, startups usually engage in a round of “family and friends” fundraising. Founders who receive initial support from their immediate communities can signal to investors that their idea has merit. However, underrepresented founders are often unable to turn to those closest to them for such foundational investment.
“Regardless of funding type, underrepresented founders have historically faced many challenges accessing the capital necessary to launch, scale and succeed in business,” Gruswitz said. “Bias – whether explicit or implicit and whether systemic, institutional and/or unconscious – is the primary issue, and cultural and communication differences contribute as well.”
The DPP team is grateful to partner with Johnson, venture capital advisor Pedro Moore and representatives of the Delaware Sustainable Chemistry Alliance (DESCA), the University of Delaware Horn Entrepreneurship Program and Delaware State University’s College of Business on the Startup302 Steering Committee.
“DESCA is thrilled to be a part of this intentional effort to grow a diverse and inclusive startup community,” said DESCA Executive Director Dora Cheatham. “This type of resource collaboration is vital to building a thriving innovation and entrepreneurial ecosystem.”
Dan Freeman, founding director of Horn Entrepreneurship, said his program was just as eager to contribute to Startup302. In addition, he looks forward to awarding a Blue Hen Prize to the top UD-affiliated startup.
Lillie Crawford, director of the Delaware Center for Enterprise Development (DCED) at DSU’s College of Business, added that “DCED is also thrilled to support Startup 302, knowing that this event is another means to foster innovation, ideation and entrepreneurship among DSU students and the underserved community members DCED serves.”
Prizes for Startup302 winners will include more than $150,000 in prize money. Other benefits include access to mentors and valuable connections within the startup ecosystem, including introductions to potential investors.
Sign Up for Startup302 Virtual Info Session on December 10th
A virtual informational session, hosted by members of the Startup302 Steering Committee, will take place at noon on Dec. 10. Further details and registration are at bit.ly/Startup302info.
Application deadline for Startup302 is Feb. 14. There is no cost to enter, thanks to sponsorship by the State of Delaware and other sponsors. The finals of the competition will take place virtually in April.
For more information and to apply, visit startup302.org. Questions may be addressed to Noah Olson, DPP innovation support manager, at nolson ( @ ) choosedelaware dot com or 302-576-6589.