Owners of NBA’s Brooklyn Nets launch accelerator program for diverse startups
The program is called BK-XL, and will invest up to $500,000 in 12 startups led by diverse founders.
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Clara Wu Tsai, co-owner of the Brooklyn Nets, recently announced the launch of a large business accelerator program for diverse startup founders.
Called BK-XL, the accelerator will invest up to $500,000 to 12 startups led by founders of diverse backgrounds.
Wu Tsai told The Associated Press that capital is among the biggest impediments to wealth-building for diverse entrepreneurs.
“We thought that investing in this segment was how we could create wealth, not only for the entrepreneurs, but also through all the different jobs that they are going to create,” said Wu Tsai.
According to figures from Crunchbase, only 2.4% of all U.S. venture capital raised between 2015 to 2020 was allocated to startups with Black or Latino founders.
Increasing investments of venture capital in startups run by diverse founders became a priority for many during the wake of the police murder of George Floyd.
It was highlighted when funding to Black entrepreneurs quadrupled in the first half of 2021 to $1.8 billion. However, investments to diverse founders of color have dropped precipitately since.
BK-XL is the latest effort Wu Tsai and her husband, Joe Tsai, is making to help change that, particularly in the Brooklyn area.
Each effort is done with the goal of improving economic mobility for people of color through donations and investments.
“It will be a mix of grants, loans and investments into this borough which I think ultimately is going to result in strengthening the community and the building up of people,” Wu Tsai said.
In 2021, the Tsais launched the “EXCELerate” initiative through its Social Justice Fund to provide no-interest loans to Black-owned small businesses in Brooklyn that needed help recovering from the COVID-19 pandemic shutdowns.
Wu Tsai noted that the investments made through BK-XL will help businesses that are ready to expand.
For startups selected for the BK-XL program, the first $125,000 investment will be in return for 7% equity in the startups, which will be split between the Social Justice Fund and Visible Hands, an investment platform.
“The partnership here is something I’m really excited about,” said Daniel Acheampong, general partner at Visible Hands.
In addition to capital access, founders selected for the program will receive free office space and a 10-week immersion program on building successful businesses with mentorship help from a number of partners.
Applications can be submitted starting Dec. 5. The requirements are the startups must be led by a diverse person of color and based in Brooklyn.
According to Wu Tsai, any profits from investments into the BK-XL startups will be re-invested into Brooklyn businesses.
“I think the best proof of our belief in Brooklyn and Black businesses is by investing in them and showing the world that these are good investments,” she added.