McKeever “Mac” Conwell vividly remembers when he learned the importance of networking — and that moment has led him down a road that recently had him working with two companies founded by formerly incarcerated people.
Back in 2011, Conwell, a software engineer, was confident about his new product, an online platform for crowdfunded gift-giving, but he and his business partner needed more capital. At a startup event in Washington, D.C., Conwell heard an audience member ask a panel of venture capitalists: What can I do right now to convince you to write me a check? One panelist, Conwell recalls, admitted that showing up to that event wasn’t going to cut it. Instead, the venture capitalist said, he’d be most enticed if someone in the questioner’s trusted network introduced them.
“From that moment, I said, OK, now I need to figure out how do I find people that know investors,” says Conwell.
He went back to Baltimore, and kept on attending startup and entrepreneurship events around town. He set out to follow up and have lunch with every person who gave him a business card. “I didn’t always know why. I didn’t always know who they were,” he says. “I wasn’t thinking too much around it, it was just something I did.”
Pretty soon, the daunting world of raising startup capital became something more like a small town for Conwell. As he continued attending events, people he had met earlier and lunched with would see him, and introduce him to other people they knew around the room. “I started building up my network really quickly without even realizing that’s what I was doing,” says Conwell.
That network got him the capital for his first venture, and more for a second venture. Nowadays, Conwell is the one on stage giving presentations as an investor himself, in his capacity as the deal team coordinator at TEDCO, a Maryland state-affiliated startup assistance and seed investor organization that recently launched a new Minority Business Pre-Seed Fund.
The new fund is designed to address the needs of minority entrepreneurs in Maryland, who often lack access to the earliest stage of startup capital often called the “friends and family” round.
When you consider white median household wealth is $141,900, while black median household wealth is $11,000 and Latino median household wealth is $13,700, it’s not hard to imagine why there is such a lack of “friends and family” capital for most entrepreneurs of color. And yet, there is evidence that entrepreneurship can reduce racial wealth disparities. So entrepreneurs of color get stuck in a bind — starting and growing minority-owned businesses can reduce the wealth gap, but they face barriers to business startup and growth because of racial wealth gaps.
Over the course of four quarterly rounds over the next year, the new Minority Business Pre-Seed fund will award up to 10 African-American entrepreneurs with an investment up to $40,000 each to test business assumptions and build prototypes for initial market testing. Half the capital will come from TEDCO, and the other half from the Harbor Bank Community Development Corporation.
Conwell says he brought in Harbor Bank CDC on account of his philosophy around startups networking and building key relationships. “Companies that get awarded out of the fund get a business account at the bank, and as you move forward if you eventually need a small business loan, you…