Portsmouth, VA (BlackNews.com) - 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, a division of 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, ventures that are too risky for traditional lenders and don't meet the 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-deductable 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 allexperts.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 its website www.mbeempowermentfund.org or call Markita Van de Riet at 757-671-8333 ext 104.
ABOUT VHCDC
Virginia Housing and Community Development Corporation is a community development corporation based in Portsmouth, Virginia. It is organized as a non-profit 501(c)3 charitable organization. The empowerment-based mission of VHCDC is being realized through its support of entrepreneurship and its innovative approach to making a difference, both here in Hampton Roads and throughout our nation. VHCDC is working to promote and support entrepreneurship, to advance entrepreneurship education and training, to promote entrepreneurship-friendly policies, to connect disadvantaged small businesses to capital and credit, and to facilitate the commercialization of new technologies and services by small, women, and minority-owned businesses which have great promise for improving the economic welfare of our region. |
SMALL BIZ CENTER