GRAND RAPIDS — Start Garden Inc. says it’s gaining traction on an effort launched two years ago that put more emphasis on diversity.
Through greater outreach and networking into Grand Rapids-area neighborhoods, the business incubator has been able to attract far more female and minority entrepreneurs to participate in events. They include the monthly 5x5 Night that awards $5,000 for startups to take an idea to the next level, or the Start Garden 100 that awards $20,000 to entrepreneurs at an annual Demo Day where 100 finalists pitch their ideas to a panel of judges.
Now Start Garden seeks to take another step toward diversifying its client base and bringing aboard more entrepreneurs who are minorities.
The nonprofit Start Garden set a goal over the next two years to host six minority-owned tech startups at its business incubator at 40 Pearl St. NW in downtown Grand Rapids.
“Getting out of the basement and working alongside other entrepreneurs has tremendous impact on a new startup. We’re here to be the on-ramp into that community and, eventually, new wealth creation in minority communities of our city,” Start Garden co-director Jorge Gonzalez told MiBiz.
A Start Garden survey showed that fewer than 8 percent of tech startups in Grand Rapids are owned by women, African Americans or Hispanics. That’s despite minorities making up more than 36 percent of the local population.
The Start Garden survey also found that owners of tech startups are overwhelmingly male, at 86 percent, and white, 81 percent, according to co-director Paul Moore.
To create greater diversity and inclusivity, Start Garden needed to act more intentionally and reach out to “marginalized” neighborhoods as much as possible to connect with minorities who have an innovation or idea for a business “to make sure they know we exist,” Moore said.
“It’s just being active and getting out and finding out what people are working on,” he said. “We’re targeting populations that have felt excluded, from particularly the tech startup scene in Grand Rapids.”
As a result, minorities and women consistently represent nearly half of participants in 5x5 Night, where previously participants were predominantly white and male, Moore said.
“Now we want to see if we can bring that same thing into the tech community that’s at 40 Pearl,” he said.
In the 2018 Start Garden 100 competition, 46 percent of the 812 people submitting entries were women, 29 percent of participants were African American and 10 percent were Hispanic.
The event was how Ariana Waller got involved in the Start Garden incubator.
Waller had an idea for a website to resell pre-owned or surplus cosmetics that went unused at salons. She entered Start Garden 100 in 2018 and made the cut of 100 finalists who each received $1,000 to flesh out their ideas. Waller then was named one of the 10 winners last July who received $20,000 and entry into the business incubator.
The subsidized space, networking and mentorship Start Garden provides have proven invaluable for Waller, who operates her company via the website shopadorra.com. She subsequently formed a technology consulting company, Wallway Technologies LLC, that she also operates from the business incubator.
“This kind of breaks down the barriers of access to entry when we’re talking about opportunity,” said Waller, an African American woman who gives Start Garden credit for reaching out to minority entrepreneurs and emphasizing diversity.
Waller, who moved to Grand Rapids three years ago from Atlanta with her husband, Omar, talks about attending events and technology conferences where “usually I’m the only black female in the room.”
“I’m just excited that there’s an organization out here like Start Garden that gets the issue and (says), ‘Here’s a solution and here’s how we’re going to consistently drive it to success,’” she said. “They’re going to make a large impact over time.”
Start Garden takes the next step toward greater diversity under a new contract approved in February to manage the SmartZone for the City of Grand Rapids.
The contract put in place new goals for fostering local tech startups and included metrics-based outcomes. Those targets include adding 10 new tech startups annually to the SmartZone service area, with six of those companies over two years owned by minorities or women, and providing service to 15 startups a year through the Pearl Street business incubator.
“As an organization, the City is committed to helping to build a more inclusive community. Working together, we can make sure Grand Rapids is a great place for startups to launch and grow,” Kara Wood, the city’s managing director of economic development services, said in a statement.
By reaching out more to the minority community, Start Garden can increase the pool of would-be entrepreneurs to serve in the business incubator, who in turn can learn from one another as they nurture their businesses.
“It’s pretty straight forward. We’re always trying to create a high density of people that are starting things. That’s why we have a space, that’s why we do events, that’s why we do programming,” Moore said. “There’s a lot more resiliency when people are trying to start companies in a ‘community.’”
Creating greater diversity has been an issue not just for the business incubator in Grand Rapids but also for a far broader continuum of entrepreneurship, particularly in the venture capital sector that funds tech startups.
An annual research report by the Michigan Venture Capital Association shows the portion of VC-backed companies led by female CEOs in 2018 was the same 10 percent it was in 2015. The number of VC-backed companies led by racial minorities was just 13 percent in 2018, although that’s up from 9 percent in 2015, according to annual MVCA reports.
Still, there has been progress in diversity on other fronts.
Sixteen companies led by a CEO from an underrepresented group accounted for $53 million, or 13.7 percent, of the $385 million in venture capital invested in 61 startups in Michigan in 2018. That compares to just 2.8 percent of the $282 million put into 74 startups in 2015, the year after the Ann Arbor-based MVCA began publicly reporting diversity data in its annual report.