Sixteen District businesses received a portion of a $1.25 million fund from the D.C. government, designed to address the capital gap that exists for small enterprises who don’t have easy access to conventional funding, city officials announced on May 2.
D.C. Mayor Muriel Bowser, Deputy Mayor of Planning and Economic Development John Falcicchio and his staffers along with officials of 1863 Ventures, announced the recipients of the first round of the $1.25 million Inclusive Innovative Equity Impact Fund (IIEIF) at Manifest, an enterprise based in Ward 1 that combines a barbershop, coffee shop, retail outlet and a speakeasy.
KJ Hughes serves as the founder and has two partners, Brian Merritt and Susan Morgan, to help him run the business. Hughes, who used to work as the business manager for former San Diego Chargers linebacker Shawne Merriman, expressed his gratitude to the Bowser administration after the announcement.
“It is amazing that the mayor is willing to do this,” Hughes said. “The D.C. government is willing to invest in you and your ideas. In order to fund a business, you have to do a number of things whether it is to pull up your bootstraps and fund it yourself or beg, borrow and steal for the money. This is definitely a benefit for anyone who needs capital.”
To qualify for the IIEIF, businesses must generate $2 million or less in annual revenue and certify that they cannot secure conventional financing, like a bank loan, —such as a bank loan—or count as a firm that cannot reasonably qualify for financing with commercial lenders. The business must also be owned by a District resident with at least 51% possessed by a person of color or someone who could be considered economically disadvantaged.
Increasing access to capital has emerged as the main goal of the IIEIF and the creation of a pipeline of qualified businesses considered to be attractive investment opportunities in the city. Technical assistance and business mentorship serve as secondary aims.
The financial firm, 1863 Ventures, has been tapped by District officials to manage the IIEIF, select eligible business primed for investment and provide mentorship. Bowser said the fund gives entrepreneurs of color “a fair shot.”
“We have plenty of creative people with the right ideas and the right amount of passion and experience but they don’t always have access to the necessary capital,” she said. “With this fund, we’re fixing that.”
IIEIF funding ranges from $30,000 to $150,000.
On May 2, city officials announced the commencement of the second round for IIEIF funding with applications available to interested entrepreneurs. June 1 serves as the deadline for second-round funding.
Hughes did not reveal how much he will receive from the IIEIF but said the money will be put to good use.
“I have 15 employees now and will hire additional staff,” he said. “We also want to hire a marketing and communications specialist. Plus, we are looking to expand the business throughout the city.”
LaToya Liles, who owns Tsunami Hair Studio LLC located in Ward 7 also declined from revealing the amount of her award but she noted that expansion counts as part of her future plans.
“I am planning to renovate the property to build a school for teaching people about haircare,” Liles said. “This is my way of giving back to the community.”
Andre Byers owns New Era Ventures based in Ward 6. Their website explains that they own several ventures whose primary services include skincare, technology and real estate. Byers, a Ward 8 resident, disclosed that he will receive a $100,000 investment from the fund.
“I want to improve my local delivery platform,” he said. “I want my customers to hone shopping online and for it to be convenient-oriented.”