Small logo Subscribe to leading news on impact investing. Learn More
The Brief Originals Dealflow Signals The Impact Alpha Impact Voices Podcasts Agents of Impact Open
What's Next Capital on the Frontier Measure Better Investing in Racial Equity Beyond Trade-offs Impact en las Americas New Revivalists
Local and Inclusive Climate Finance Catalytic Capital Frontier Finance Best Practices Geographies
Slack Conference Calls Events Contribute
The Archive ImpactSpace The Accelerator Selection Tool Network Map
About Us FAQ Calendar Pricing and Payment Policy Privacy Policy Terms of Service Agreement Contact Us
Locavesting Entrepreneurship Gender Smart Return on Inclusion Good Jobs Creative economy Opportunity Zones Investing in place Housing New Schooled Well Being People on the Move Faith and investing Inclusive Fintech
Clean Energy Farmer Finance Soil Wealth Conservation Finance Financing Fish
Innovative Finance
Personal Finance Impact Management
Africa Asia Europe Latin America Middle East Oceania/Australia China Canada India United Kingdom United States
Subscribe
Features
Series
Themes
Community
Data
Subscribe Log In
More

At least five ideas for broadening access to capital for entrepreneurs



ImpactAlpha, June 5 – A tweet about barriers to access to capital for entrepreneurs sparked an outpouring of ideas for removing them. The Kauffman Foundation’s Victor Huang shared a post about the foundation’s recent report on removing barriers to access to capital for entrepreneurs. Soody Tronson, of wearable nursing system startup Presque, nudged Huang for solutions.

“Victor, we know there’s an access problem,” she tweeted. “The issue isn’t more reports on the dismal state of affairs, it’s how do we get access and making it happen.” So Huang put the question to his followers: “What’s your biggest idea to help expand capital access for entrepreneurs?”

Entrepreneurs and investors weighed in.

1. Inclusive fund incubator. “Underwrite the development of new funds created by first time women and POC fund managers, and then capitalize them as anchor investors, loan guarantors and syndicators,” said Sphaera’s Astrid Scholz. “If every capital innovator I know had $100K, access to legal & technical expertise & their first $1M committed, we could mobilize billions. Think of it as an Inclusive Fund Incubator.”

2. Overcoming bias. “I would love to see capital embrace more of the blinding and rigor recommended for overcoming bias in hiring,” says Milk Run’s Rob Galanakis. He says diverse VC firms like Backstage Capital have no trouble finding and funding, but most companies are not at all diverse and need more than good intentions. Galanakis says we need more models like data-driven growth capital investor Clearbanc, where funding is objectively determined. He adds, “How short and to the point could you make diligence? How can we get to 2 weeks from intro to close, even on small amounts? The shorter and simpler, the less bias. Random disbursement on one end, current behavior on the other.”

3. Social capital. “In order to be able to get money they need broader access to the social capital networks where decision makers and influencers in the capital stack are,” said Pensole Academy’s Stephen Green.

4. Business networks. “Entrepreneurs also have to create new, 21st-century chambers of commerce like Biz for a Better PDX,” said Zebras Unite’s Mara Zepeda.

5. Kelsoism, suggested University of Colorado Boulder professor Nathan Schneider. A self-financing mechanism through community ownership.

You might also like...