Brooklyn, which has outpaced the rest of the city in adding tech jobs and is home to technology-reliant companies like Etsy and Kickstarter, is pulling in more money for research, development and innovation — and a large chunk is coming from the owners of the Brooklyn Nets.
This week BK-XL, a Brooklyn-based early-stage accelerator for companies started by minority entrepreneurs, began taking applications for investments of as much as $500,000. BK-XL was set up by Clara Wu Tsai, a philanthropist who with her husband, Joseph Tsai, owns Barclays Center and the Nets. She said she envisioned “an entrepreneurial hub that will be inspired and powered by location and diversity, much like Brooklyn itself.”
BK-XL will take applications through Jan. 20 before choosing 12 companies to receive initial investments of $125,000 each, in return for a 7 percent equity stake. The companies will also be eligible for additional investments of $375,000 apiece if they stay in Brooklyn for at least a year and meet their growth targets.
“When we think about the economic landscape and the opportunity to support BIPOC founders, Brooklyn is an amazing place to do that,” said Daniel Acheampong, a co-founder and general partner in Visible Hands, a venture capital firm that joined with the Tsais’ Social Justice Fund in BK-XL. She and her husband. Joseph Tsai, a co-founder of the Chinese e-commerce giant Alibaba Group, also own the New York Liberty basketball team.
“Just numbers-wise, the Black community makes up 22 percent of the city’s population, but only 3 and a half percent of New York City businesses are owned by Black entrepreneurs,” Acheampong said. “This shows there’s a gap where we should be investing in BIPOC projects.”
BK-XL says the talent pool of people of color in the technology sector is stronger in New York than in other major markets. It says that Black and Hispanic workers make up 21 percent of tech employees in the city, more than double the share in the San Francisco Bay Area or in Boston.
But Acheampong said that few minority entrepreneurs who start companies get help from accelerator programs, which typically provide financing and mentoring for start-ups for set periods. Wu Tsai said that Brooklyn “has typically lacked the kind of institutional investments needed to build a community of successful venture-backed companies, especially in communities of color.”
BK-XL will have office space in Industry City, the 16-building complex in Sunset Park that is home to new tech and biotech companies. The 12 companies will also have space there during a 10-week immersion program with BK-XL, which could help the entrepreneurs make connections for future business.
*This is an article from The New York Times published on December 6th, 2022; See the original article here.
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