ForbesA Billionaire Investor Steps Up As VC Dollars For Black Founders Disappear
November 16, 2022
Brooklyn-based Accelerator to Invest up to $500,000 in Each Company Selected
Social Justice Fund to Partner with Visible Hands to Identify Prospective Startups
Brooklyn, NY; November 7, 2022 – Clara Wu Tsai, founder of the Social Justice Fund and owner of the Brooklyn Nets, New York Liberty, and Barclays Center, announced today the launch of BK-XL, a new Brooklyn-based early-stage startup accelerator for BIPOC founders. BK-XL is the largest accelerator for BIPOC founders by potential investment size per company.
Twelve startups founded by BIPOC leaders will be selected for BK-XL’s inaugural 2023 cohort and receive up to $500,000, which includes an initial investment of $125,000 (in return for seven percent equity) and an additional investment of $375,000 via an uncapped SAFE (upon meeting certain growth benchmarks and maintaining operations in Brooklyn for at least one year). In operating BK-XL, the Social Justice Fund is partnering with Visible Hands, a trusted investment platform and accelerator for early stage, overlooked founders.
In addition to receiving funding from BK-XL, selected founders will participate in a ten-week immersion program in Brooklyn during which they’ll receive office space along with ongoing mentorship and support from investors and operators at Blue Pool Capital, Visible Hands, BSE Global, the Brooklyn Nets, Barclays Center, and other partnering organizations. BK-XL and its network of partners will continue to support the selected companies after the completion of the accelerator program.
“Our intention is to identify the most innovative BIPOC founders and provide them with the funding and network support they need to build scalable and sustainable businesses,” said Clara Wu Tsai. “With BK-XL, we’re bringing the best and brightest BIPOC talent to Brooklyn and giving them the same level of investment and access to resources that others have enjoyed for decades.”
Only 2.4 percent of all U.S. venture capital raised from 2015 to 2020 was allocated to companies with Black or Latinx founders, according to Crunchbase. And, while funding for Black startups nearly tripled from 2020 to 2021, in the wake of George Floyd’s murder, that funding is already nearly back down to pre-2020 levels so far this year.
This issue is particularly acute in New York City: while the Black community makes up 22 percent of the city’s population, only 3.5 percent of NYC businesses are owned by Black entrepreneurs. Meanwhile, the BIPOC talent pool within the tech sector is stronger in New York City than in other major markets, with Black and Hispanic workers making up 21 percent of its tech sector, compared to less than 10 percent in the San Francisco Bay area and in Boston.
“Very few BIPOC founders are currently served by the major accelerator programs,” said Daniel Acheampong of Visible Hands. “We know these individuals are out there and that they bring uniquely valuable experiences and perspectives to the businesses they create. With Clara and the Social Justice Fund’s support, BK-XL will put fuel on the fire of Visible Hands’ efforts to identify and support BIPOC founders so they can transform their vision into businesses that will prosper and benefit the larger community, especially in Brooklyn.”
Applications for BK-XL will open on December 5, 2022, with a close date of January 20, 2023. Selected companies will be notified by early March of 2023 and the program is expected to begin in mid-April of 2023 and run until late June of 2023. More information on the timeline and application process is available at www.bk-xl.com.