VHCDC

Our Goal: $1,000,000

Current Total:

$146,445

What's New

NON-PROFIT LAUNCHES FUND TO ASSIST MINORITY BUSINESSES

Date Published: Nov 19, 2009

In the wake of an economic downturn that has kept many investors from financing even the most highly developed start-ups, Virginia Housing and Community Development Corporation (VHCDC), a non-profit 501(c)3 organization, has formed a community development venture capital fund aimed squarely at investing in the minority business community, the MBE Empowerment Fund.

MBE Empowerment Fund, founded by Virginia Housing and Community Development Corporation, a 501(c)3 tax-exempt organization, is a community development venture capital fund created to provide long-term equity, near equity, and debt investments in minority business enterprises. The Fund addresses the funding gap experienced by ventures that do not meet the minimum investment criteria and minimum revenue requirements of most venture capital firms.

The MBE Empowerment Fund will offer more than just financing. It aims to envelop disadvantaged, minority-owned businesses with financial, management and technical assistance, while providing access to broader financial resources and a network of professional service providers that may increase the business’ chance for success.

On November 20, 2009, VHCDC launched a region-wide campaign to seed the MBE Empowerment Fund. VHCDC seeks to raise $5 million to create a pool of funds that may be used to make equity investments in the most promising minority-led ventures in its region. VHCDC is asking individuals and small, women, and minority business owners to support the Fund by making a small, tax-deductible contribution to create a permanent, community-supported revolving investment fund that provides long-term financing for minority-owned, women-owned, ex-offender-owned, and disabled-veteran-owned small businesses. Individuals are asked to gift $25, while small businesses and local municipalities are asked to contribute $100 and $250, respectively. VHCDC seeks to begin evaluating potential investments during its MBE Capital Call Conference & Venture Forum, scheduled for February 15, 2010 in Richmond, Virginia (See www.mbecapitalcall.com for details).

According to VHCDC Board President, James Taylor, “VHCDC has studied numerous Federal, State, and local programs and incentives designed to stimulate business creation and growth among minority- and women-owned businesses. In the realm of access to capital, there is a majority consensus these programs are too narrowly focused, promoting debt financing over equity capital, which typically encumbers the business’ ability to compete. It is ironic that these programs target communities with large populations of low-income residents with little to no equity or access to investment capital. It is precisely these communities that deserve more diverse capital resources.”

In a recent article posted on the CNN website, Federal Reserve Chairman Ben Bernanke acknowledged that lending remains “very tight” for businesses that rely on banks for their financing. In a speech at the Economic Club of New York, Bernanke stated, “The fraction of small businesses reporting difficulty in obtaining credit is near a record high, and many of these businesses expect credit conditions to tighten further” (www.cnn.com).

Business expert Janet Atwell of all experts.com cited that the percentage of new businesses staying open after one year is 35% and 20% after two years. The success of MBE Empowerment fund would help trend down the failure rate. The Fund seeks to partner with local, regional, and national providers of business technical services and local, state, and federal resources to provide in-kind, pro-bono products and services. The focus will continue to be on cultivating, nurturing and sustaining a grass-roots donor-base that shares MBE Empowerment Fund’s objective to support minority entrepreneurs who possess the passion, skills, and courage to pursue the American dream.

For more information about the MBE Empowerment Fund, make a contribution, or sponsorship opportunities, please visit www.mbeempowermentfund.org