During Thursday’s board meeting, the Multnomah County Board of Commissioners unanimously approved entering into an intergovernmental agreement with the Portland Development Commission, or PDC. Through the agreement, the county is set to provide $500,000 to PDC, who will work with the Portland Economic Investment Commission (PEIC), and Elevate Capital to distribute the funds to local businesses.
The action is part of a $3,000,000 project to capitalize and provide guidance to startup businesses that are founded or lead by members of underserved communities, including women and people of color.
“While homeownership is the most common avenue to generate multi-generational wealth...business and commercial property ownership are also critical,” said Kimberly Branam, deputy director of PDC, at the board meeting.
The goal is for 40 percent of businesses to have a black or Latino founder, 40 percent to have one or more female founders and 20 percent to have a founder that represents other minorities.
“When you look at the country, it’s mainly white men who are leading those companies, and when we look locally, it’s the same thing,” said Katherine Krajnak, senior industry liaison for PDC.
In Portland, the whitest city in the United States according to a 2010 census, the need for more diversity in the startup community is clear.
According to a statistic read by Branam, only 2 percent of venture capital firms have an African-American or Latino founder, and only 19 percent have at least one female founder.
“This is such a priority to us because of the significant wealth disparities within our community and nationally,” Branam told the board of commissioners Thursday.
The idea for the inclusive startup fund was developed in the fall of 2014 by PDC.
Around that time, Multnomah County Commissioner Loretta Smith had the same idea.
From there, said Krajnak, “We decided to work together.”
Over the summer, both the PDC and Multnomah County agreed to allot $500,000 each to the fund. The State of Oregon also stepped in to allocate $250,000.
The inclusive startup fund will provide capital to around 30 businesses in the Portland area, additionally offering them mentoring and guidance later down the road.
The final step is raising $1.75 million in private capital to reach the $3 million benchmark.
Elevate expects to finalize fundraising in June 2017.
Next month, Elevate Capital is slated to present their fundraising strategies and their accomplishments so far in aiding startup businesses to the Board of Commissioners.
The board expressed their gratitude to Krajnak and Branam at Thursday’s meeting, thanking them for their commitment to strengthening diversity across Portland.
“This is really something that I don’t think any other local government has done across the country,” said Smith. “We’re recognizing how we can really foster wealth creation within our communities of color and low-income neighborhoods, and as a result we get closer to becoming an even more competitive and equitable place for folks to live and work.”