Underrepresented Entrepreneurs Gain Access to Capital via Amazon’s new $150M Fund

Women and minority entrepreneurs continue to face headwinds in gaining access to capital at critical points in their startup ventures.?Amazon is recognizing that challenge with the launch of its latest initiative?Amazon Catalytic Capital?that focuses on underrepresented entrepreneurs that includes Black, Latino, Indigenous, women, and LGBTQIA+ founders.?

In the coming year the $150 million pre-seed/seed stage fund will support venture capital (VC) funds, accelerators, incubators, and venture studios that fund entrepreneurs from underrepresented backgrounds.?While the fund will support 10 venture capital funds encompassing over 200 companies, Amazon believes their initiative will have a multiplying effect within these targeted communities. Their hope is that other investors will be inspired to follow their initiative.?

Peter Krawiec, Amazon’s senior vice president of worldwide corporate development, expresses Amazon’s enthusiasm for the support the company will give to underrepresented entrepreneurs.

“We’ve seen incredibly innovative ideas from underrepresented entrepreneurs—from companies offering inclusive health services for women, to startups helping companies mitigate climate impact for underserved communities—and we’re convinced that an inclusive investment strategy leads to better returns and innovation. We want to ensure that these companies and their founders have the same access to capital as anyone else.”

The impetus for this initiative comes from the data?Pitchbook?highlighted from?Crunchbase News. Women founders received 2% of U.S. venture capital funding in 2021, while Black-founded and Latino-founded startups attracted only 1% and 2% of U.S. venture capital funding respectively last year.

This gap impacts underrepresented entrepreneurs in other areas, missing out on the benefits of mentoring, sponsor support and high level networking opportunities. With this initiative Amazon will fill this gap.?Amazon executives will mentor the ventures entering portfolios, while also providing access to resources and technical strategy. Startups will be positioned to identify partnership and product collaboration opportunities that are often critical for early adoption into the market.

Historically, underrepresented founders have had less access to startup venture capital that presents great challenges for their efforts to bring ideas to fruition. Studies consistently show that Black, Latino, women, and LGBTQIA+ startup founders are underrepresented across the total number of funded startups.

Most noteworthy is that when given the opportunity “diverse and inclusive teams are 75% more likely to see ideas become products and 70% more likely to serve new categories”.?This success rate bolsters actions for businesses such as Amazon to promote inclusiveness in the entrepreneurial community, and specifically offer greater access to capital to underrepresented entrepreneurs.

Amazon Catalytic Capital provided initial funding to the following organizations:?Collide Capital,?Elevate Future Fund,?Share Ventures, and?Techstars Rising Stars Fund.

The result to date of investors supporting by Amazon’s VC funds is hundreds of underrepresented startup founders gaining timely access to capital.?This leads to job creation and economic growth in historically underserved communities.

Hamet Watt, managing partner at Share Ventures, shares his thoughts about participating in the program supporting underrepresented entrepreneurs, reflecting the thoughts of those who were also selected.

“Our collaboration with the team at Amazon was born out of our shared passion for innovation in key areas that improve the human experience at scale. We are aligned with Amazon’s customer obsession and grateful to be learning and collaborating with them to build a portfolio of game changing companies.”

Read about:?Black Entrepreneurs Gain Access to $150 Million Amazon Fund with Launch of its Accelerator Program