The Raynier Institute & Foundation, a Seattle-based philanthropic organization with Philadelphia roots, has partnered with Drexel University and the University City Science Center to improve access to capital for minority entrepreneurs in the area. The institutions will collaboratively manage a seed fund created by a $500,000 grant from the Foundation, which was founded by an heir of Philadelphia transportation and real estate magnate Peter Widener, and supports programs of high merit for the betterment of humanity.
The Raynier seed fund is intended as a step toward addressing persistent inequality in minority business ownership by providing access to funds, guidance and networks early in the entrepreneurship process. A recent study by a pair of venture capital rating groups suggests that while the disparity in start-up funding has been improving, the fact remains that over the last five years, less than a quarter of new businesses have been started by minority entrepreneurs.
“Inequity around access to capital is well-documented,” said Shintaro Kaido, vice provost for innovation and executive director of Drexel’s Office of Applied Innovation, who will be one of the administrators of the Raynier seed fund at Drexel. “This seed fund, made possible by the Raynier Institute and Foundation to assist underrepresented founders, will be a great asset for Philadelphia to help increase the diversity of its innovation and entrepreneurship ecosystem.”
Investment candidates will come from the Science Center’s commercialization programs, Drexel’s Charles D. Close School of Entrepreneurship and Office of Research & Innovation at Drexel. The Science Center’s Launch Lane and Digital Health Accelerators, Drexel’s Office of Research & Innovation’s technology commercialization programs and the Close School’s Baiada Institute Incubator competition have all demonstrated a commitment to supporting scores of minority founders over the last several years.
”Untapped potential represents significant opportunity,” said Tiffany Wilson, president & CEO of the University City Science Center. “Support from the Raynier Institute & Foundation will enable the Science Center and Drexel to increase support to minority founders and ensure Philadelphia’s innovation community is more representative of Philadelphia’s demographics.
Drexel and the Science Center also partner in supporting these fledgling businesses at their Innovation Center@3401 (ic@3401) incubator space. Since its establishment in 2015, ic@3401’s member companies, 79% of them founded by minority, female or immigrant entrepreneurs, have collectively raised over $90 million, with three exiting to publicly traded companies.
“We know that entrepreneurs need capital to propel their ideas into reality. Seed funding in the initial stages of a new venture is critical not only to survival but also to the ability of the firm to pivot as needed,” said Donna DeCarolis, PhD, founding dean of the Charles D. Close School of Entrepreneurship, who will serve as a co-administrator of the fund with Kaido and Aleister Saunders, PhD, Drexel’s executive vice provost for innovation and research. “This seed fund, targeted at underrepresented entrepreneurs, will accelerate innovation and job creation among minority entrepreneurs in our region. We are grateful to the Raynier Institute & Foundation for their generosity in support of minority entrepreneurs.”
A three-person organizing committee, consisting of representatives from the Science Center, the Close School and Drexel’s Office of Research & Innovation, will collaborate to build a working group that will help evaluate applicants seeking capital and connect them to entrepreneurial support resources. The selection process will utilize a combination of the organizing committee’s expertise, supplemented by key community members with a history of cultivating and supporting minority entrepreneurs. The investments will be managed by Drexel, with all returns to be reinvested in the fund.
“We are pleased that the legacy of Peter Widener will live on in the spirit of future entrepreneurs and help drive Philadelphia into the future,” said Michael Valucci, a member of the Raynier Institute & Foundation Board of Directors.
Since its founding in 1994 by philanthropist James Widener Ray, the Raynier Institute & Foundation has awarded more than $41 million to non-profit organizations, primarily in Seattle and Philadelphia, that serve the areas of animal welfare, arts and culture, education, the environment and health care and human services.