URA launching new social impact pilot programs to encourage minority entrepreneurship, business expansion
Last updated 3/22/2022 at 7:58am
The Urban Redevelopment Authority of Pittsburgh (URA) has adopted program guidelines for two new social impact pilot programs aimed at encouraging minority entrepreneurship and business expansion.
URA Ventures and the Minority and Women-owned Business Enterprise (MWBE) Developer Equity Fund programs hope to achieve this by providing risk capital to minority and women-owned businesses and founders. The URA is hoping to raise $5 million in capital to fund these programs using a combination of URA, American Rescue Plan Act (ARPA), and other public and private funding sources.
"The City of Pittsburgh holds tremendous economic opportunity," said Mayor Ed Gainey. "But we need to work together to ensure that this opportunity is equitable and that it empowers MWBE entrepreneurs that for too long have been left behind. If we are going to grow our city then we need to grow and invest in our minority businesses."
Pittsburgh suffers from low rates of Black entrepreneurship and business ownership. One recent data point describes Pittsburgh as having the lowest rate of Black-owned businesses among the 50 largest metros in the United States.
"Many MWBE businesses and founders have difficulty accessing risk capital and liquidity to expand businesses and sponsor real estate development projects," said URA Chief Strategy Officer Thomas Link. "The URA has a long, successful history of investing directly in small businesses and supporting MWBE businesses through debt and investment products such as the Micro-Enterprise Loan Fund, the Minority Business Recovery and Growth Loan Fund, and other tools. URA Ventures and the MWBE Developer Equity Fund pilot programs seek to build upon this foundation to provide additional liquidity and risk capital to Pittsburgh's MWBE business community through a suite of programs."
URA Ventures is an early-stage, diversity focused fund seeking to invest in companies located within Pittsburgh. The program's objective is to change the face of entrepreneurship by making strategic investments, and by accelerating access and availability of capital to historically disadvantaged small businesses, while creating quality jobs and spurring economic growth in the City of Pittsburgh.
URA Ventures will deploy three programs: Main Street Ventures, Pittsburgh Entrepreneur Fund 2.0, and Venture Co-Investment, seeking to generate investment and returns from venture-backed and high-growth potential firms. This will allow higher risk portfolio investments in smaller, long-term-growth main street businesses where impact is weighted more than economic return.
The URA is looking to allocate $3 million+ for the program with the goal of impacting 41 businesses and creating more than 80 jobs.
The $2 million MWBE Developer Equity Fund will provide direct equity investments in MWBE-sponsored real estate development ventures through a shared risk/reward structure that hopes to strengthen the development sponsor and provide return on investment to the URA.
"This investment is designed to provide a multitude of benefits," said URA Executive Director Greg Flisram. "From lowering barriers to entry and increasing access to capital to supporting MWBE-led small businesses and job creation, these programs encourage quality, locally controlled, wealth building and economic stability opportunities for Pittsburgh communities, particularly those located in an Avenues of Hope corridor."
The programs will be funded by a combination of Community Development Block Grant (CDBG) funds, URA revenue sources, and other URA, local, state, and/or federal sources as appropriate.
"The URA is taking significant steps to seed and operate pilot investment programs to address deep inequities and gaps in availability of capital for MWBE businesses," said Mr. Link. "We are eager to talk to our private, public, and philanthropic partners to work with us to advance in both funding and support."
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