Across industries, a lack of funding for women or minority-led startups seems to be a common problem. For example, Project Diane found that Black women founders in tech are consistently underfunded. Investment bank Morgan Stanley aims to combat funding inequity through its Multicultural Innovation Lab.
The accelerator program is designed to help women and minority-led companies in the post-seed to Series B funding rounds. On Monday, Morgan Stanley announced the ten startups selected as apart of the Multicultural Innovation Lab’s third cohort.
Some of the startups selected include LookLive, SmartGurlz, and Jenzy. It’s a big deal for businesses to be selected, because they receive access to a list of Morgan Stanley resources and networks. Morgan Stanley also invests into each cohort member.
In a press release, Co-Head of the Multicultural Innovation Lab Alice Vilma said:
“There is a compelling business case for investing in startups led by women and multicultural founders, yet, as found in our recent report, there is a large market inefficiency to accelerate businesses led by these founders. We are working to directly address this funding gap, one cohort at a time.”
Vilma is referring to a report that Morgan Stanley released back in December showing that investors do not see diversity as a priority. The report also showed that most investors do not believe there is a funding gap. About eight in ten investors say that underrepresented entrepreneurs receive the right amount of capital or more than their business models deserve.
“Women and people of color have long faced barriers starting their own businesses and raising capital to fund them. Some barriers have been structural, others cultural, but all have been costly — and often in ways we’ll never be able to quantify,” James Gorman, Chairman and CEO, said in the report’s introduction.
Now in its third year of the New Multicultural Innovation Lab, Morgan Stanley hopes to show the importance of funding founders to various backgrounds.