Washington, DC – Today, to kick off DC Startup Week, Mayor Muriel Bowser, the Office of the Deputy Mayor for Planning and Economic Development (DMPED), and 1863 Ventures opened applications for the nearly $2 million investment round of the Inclusive Innovation Equity Impact Fund (IIEIF). The initiative, which launched last year, aims to address the variance in capital access for businesses that seldom receive early-stage funding through conventional financing. The inaugural class of IIEIF investments funded 15 enterprises across sectors, including financial services, arts and education, food and beverage, waste management, wellness, and hair care. 1863 Ventures serves as the fund manager for the IIEIF to administer and distribute investments to successful applicants.
“We know that small businesses are going to play a big role in our city’s comeback – and we want Black-owned businesses leading the way,” said Mayor Bowser. “With the Inclusive Innovation Equity Impact Fund we are able to give local entrepreneurs a fair shot at turning their ideas into businesses. Now, we want to spread the word that applications are open and we have nearly $2 million available.”
Eligible businesses are defined as “Equity Impact Enterprises” that have $2 million or less in annual revenue and certify that its business is unable to obtain conventional financing or is a business enterprise that cannot reasonably be expected to qualify for financing under the standards of commercial lending. In addition, the business must be a resident-owned business and a small business enterprise that can demonstrate that it is at least 51 percent owned by an individual who is – or a majority number of individuals who are – economically disadvantaged or has been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities.
“DC has the highest percentage of Black-owned businesses in the nation,” said Deputy Mayor for Planning and Economic Development John Falcicchio. “This track-record of success will continue with the third round of investments through the Inclusive Innovation Equity Impact Fund.”
The Mayor’s FY23 budget includes key investments to support small businesses and entrepreneurs, including:
- Bridge Fund 3.0 ($8 million) to continue enabling arts and entertainment venues to reopen and recover post-pandemic.
- Commercial Property Acquisition Fund ($4 million) to support with down payment assistance for Equity Impact Enterprise-eligible businesses of up to $750,000 or 25% of the sale price, whichever is less, for the acquisition of commercial property in the District.
- Inclusive Innovation Equity Impact Fund ($2 million) to support Equity Impact Enterprises-eligible businesses with training and investment in the form of revenue or equity-based financing.
- Small and Medium Business Growth Program ($3.4 million) to provide new growth focused investments for DC small businesses. The community benefit includes asset building, creating job opportunities, enabling residents with greater opportunities to spend locally, and helping generate positive economic multiplier effects.
- DC Community Anchor Partnership ($500,000) to help local “anchor institutions” place-based entities, including hospitals, universities, and utility companies, use their procurement power to better support the growth of local, DC-based minority-owned business enterprises (MBEs).
“IIEIF is a catalyst for equitable economic growth, and it is a privilege to manage the fund for a second year. We are proud of the IIEIF investees as they showcase the dynamism of industry and innovation in D.C.,” said Melissa Bradley, Founder and Managing Partner of 1863 Ventures. “For many small businesses, challenges that existed prior to the pandemic, such as business fees, taxes, and rent, have become more burdensome. IIEIF funds will be used to offset rising costs to help emerging entrepreneurs grow, scale, and create jobs and increase the capital revolving in our communities. We are excited to steward this next funding effort to support Equity Impact Enterprises that are historically underserved and overlooked businesses in the city.”
Applications for the Inclusive Innovation Equity Impact Fund open today, Monday, September 12, 2022. For more information and to apply, please visit 1863.smapply.io/prog/iieif_2022. The application deadline is January 31, 2023.
“I think one of the key benefits of being adequately capitalized through the fund is being able to stick to a plan and see it through without the need to pivot because of funding shortages. We have been able to recruit new talent and establish our marketing plan for the fourth quarter,” said K.J. Hughes, the Founding Partner of Manifest, a multifaceted grooming, retail, and café experience in Adams Morgan and investee from the inaugural fund disbursement. “We support our community through hiring. We’ve been able to hire returning citizens and provide proper training and development that will help both the employee and the business grow together.”
For more information on additional business funding opportunities and initiatives, visit obviouslydc.com.