From Nick Barron. Follow him on Twitter @nbarron; email him at nick[AT]borderstan.com.
A challenge faced by many minority entrepreneurs is access to money, and now a DC entrepreneur and his team are working on something they think can help.
The company, BlackStartup.com, is targeting an April launch, and will use crowd funding to try and close the African-American Startup Gap, in which aspiring African-American entrepreneurs lack access to the financial capital they need to start their businesses.
“Our community just doesn’t have the kind of wealth to start their own companies,” CEO Nathan Bennett-Fleming said.
An entrepreneur will submit their company to the site, and the team behind Black Startup will review each proposal before publicly listing it on the site for others to fund.
Once a company’s proposal is visible on the site, anyone can give money to fund it.
The BlackStartup team consists of five, including Fleming. (If Fleming’s name seems familiar to you, it’s because he’s also DC’s Shadow Representative.) All five met as students at Morehouse College in Atlanta, and now reside in different locations.
While they’re looking to raise an initial seed round of investment, BlackStartup has been accepted into two entrepreneurship programs, Venture Creation and a summer fellowship at Yale University.
The company plans to make money by charging a 5 percent fee on each funding transaction, and potentially by offering advertising opportunities on its blog.
Though making money can alone be a taxing goal for a startup, it’s the social mission piece of BlackStartup that could be most challenging.
“At the end of the day, we’re testing our hypothesis,” Bennett-Fleming said. “We think we have a good solution to a systemic problem, but we won’t know until we get it out to our customers.”
It’s important to note the intent of Black Startup isn’t to fund companies looking to raise huge amounts of capital.
“The type of businesses we expect on the site are the kinds of businesses that don’t need a large amount of capital,” Bennett-Fleming said.
Fleming estimates most companies on BlackStartup will try and raise between $8,000 and $10,000. A company will only receive money through the site if it’s able to reach its fundraising goal.
Along with for-profit organizations, Black Startup will also host community-based projects people are looking to fund.
In this way BlackStartup could become a competitor of Kickstarter by offering a demographically focused crowdfunding platform for non-profit endeavors.