It is a long established fact that the venture capital industry is continuing to struggle with racial diversity. Women and businesses owned by people of color are far behind in accessing capital to fund their startups and small businesses. TechTown Detroit is taking the lead through its Catalyst Angel Program to train accredited investors, including successful founders, executives and high-net-worth individuals, on how to become angel investors. The drive to increase the number of Black, Latinx and women investors correlates directly with the broader rise in the number of people investing in startups led by women and people of color.
The goal of TechTown’s Catalyst Angel Program is to recruit and train 200 accredited individuals from Michigan and the Great Lakes region who are underrepresented in the angel investor community and activate their potential as investors. The Catalyst Angel Program is a partnership between TechTown Detroit, Angel Capital Association (ACA), Ann Arbor Spark (AAS) and Venture Well and is made possible by a grant from the U.S. Economic Development Administration.
The program helps emerging angel investors in the Great Lakes region who identify as Black, Latinx and/or women acquire knowledge about investing, engage in curated courses through partner organizations and connect with other investors in local and national angel communities.
The advantages of angel investing include contributing to job growth in the community by investing in startup companies locally and nationally; learning about angel investing as an asset class; mentoring startup founders and engaging with, and learning from, other angel investors and processes.
“The Catalyst Angel Program will boost metro Detroit’s innovation-driven economic development by increasing diversity in Michigan and the Great Lakes region’s angel investing community,” said TechTown Capital Strategist Dawn Batts. “By activating more angel investors who identify as people of color and women, the program will unlock more capital in the community and increase the number of diverse perspectives in investment decision-making roles. Research has shown that a diverse investment team is more likely to invest in diverse founders.”
The Angel Capital Association estimates that only 1.3% of angel investors are Black. It is not much better in the world of venture capital (VC) where, according to the National Venture Capital Association, VC firms reported 4% Black investment professionals (compared to 3% in 2018), and 4% Hispanic or Latino investment professionals (down from 5% in 2018).
Batts added that TechTown, ACA, VentureWell and AAS would work together to resolve recurring gaps in funding for Michigan’s early-stage tech ecosystem.
“The Catalyst Angel Program will allow Michigan and the Great Lakes region to serve as a living laboratory to prove that intentional interventions on the supply side of the capital equation can have a lasting and profound impact on the region, the entrepreneurs they serve and the economies in which they reside,” said Batts.
To be considered for the Catalyst Angel Program, applicants must be an accredited investor, have two years or less of angel investing experience, reside in Michigan, Illinois, Indiana, Minnesota, Ohio or Wisconsin, self-identify as Black, Latinx and/or a woman and commit to completing Angel Capital Association courses.
The Catalyst Angel Program accepts participants on a rolling basis through March 31, 2024. Individuals who meet the criteria for the program can submit an interest form now at https://techtowndet.org/CatalystAngelProgram. TechTown Detroit also holds quarterly information sessions that provide an opportunity for program participants and potential participants to meet each other and the organizations spearheading the Catalyst Angel Program. Interested participants can register for the information session at techtowndetroit.org.