Monica Motivates Tech Solution Connects Funders and Founders
Celebrating National Black Business Month
I Am Closing the Funding Gap (IACTFG) is a cloud-based tool that connects women and underrepresented founders with funding to support their high-impact work. Monica Motivates, LLC, created this award-winning entry in a Microsoft hackathon to address persistent financing gaps based on race and gender that affect access to capital. This is one way we are closing the opportunity gap.
Follow the money
Small businesses owned by women and people of color face significantly higher hurdles to success due to differences in financing available across nearly every stage of a company’s growth, from founding to expansion.
“Black- and Hispanic-owned businesses start their businesses with less overall capital than white-owned businesses,” according to the Bipartisan Policy Center, a nonprofit organization that works across party lines to drive effective legislative solutions. “This persistent difference in funding is driven primarily by differences in the amount of bank loans and other bank credit products, which in turn are not substituted by other sources of capital,” they write in Small Business Financing: Where are the Gaps?
Business owners of color are more often denied when applying for credit and receive lower amounts even when credit scores, industry sector and other factors are considered. According to a Small Business Credit Survey by the Federal Reserve System, even among low-credit risk small business owners, Black and Hispanic owners are less likely to receive funding than white business owners. This also leads underrepresented owners to apply for credit in more places, increasing the time, energy and resources required, as well as raising stress levels for founders.
Venture capital investment is also harder to obtain. Black entrepreneurs typically receive less than 2% of venture capital dollars each year and companies led by Black women receive less than 1%. Even while investment in Black-led startups increased after the racial protests and growing social justice awareness following the murder of George Floyd in 2020, many of those efforts faltered and gains were lost by the end of 2022.
Why investment matters so much
While it’s possible to bootstrap a new business by relying on personal savings, credit cards or small loans from family and friends, that may not be sufficient to enable a business to weather a downturn or scale up to take advantage of opportunities to grow.
“Running out of money is a small business’s biggest risk,” according to Investopedia. “A primary reason why small businesses fail is a lack of funding or working capital.” The result can be not enough funding to get a product to market, fund an expansion or pay for ongoing marketing costs. “Without an influx of funding for large projects or ongoing working capital needs, small businesses are forced to close their doors,” they write.
Closing the gap
What a waste of innovation, time, investment and potential to see founders fail because they don’t have the funds needed to get off the ground, bridge to an upcoming revenue stream, or invest in a profitable opportunity to scale.
Our mission at Monica Motivates is to close the opportunity gap created by less access to education, key resources and funding for women and underrepresented founders. We do that through extensive education programs, preparing diverse suppliers to compete for corporate contracts, bringing large and small businesses together and, now, through a direct funding platform.
I Am Closing the Funding Gap (IACTFG) is a cloud-based platform designed to connect donors committed to social justice with female and underrepresented entrepreneurs and founders who need investment for their high-impact initiatives. This effort grew out of our participation in Microsoft’s #BuiltFor2030 campaign where our project won the title of Hackathon Hero.
IACTFG works across sectors and cultures to enable donors to make a statement with their wallets to create a more diverse, inclusive, equitable, innovative and economically healthy world for everyone.
Donors use the platform to see current campaigns seeking funding and make an online donation. They can contribute to specific businesses currently featured, or to the Monica Motivates Economic Inclusion Fund. This fund supports Global Supplier Diversity Accelerator scholarships for founders, non-dilutive funding for founders and Global Supplier Diversity Conference sponsorships. Monica Motivates directs the funding on behalf of donors.
Our IACTFG platform is a concrete way for individuals to help address the persistent funding gap that exists for businesses owned by Black founders and other underrepresented people. By supporting these business owners directly, you can impact the upward trajectory of their companies, support their investment in local communities and accelerate economic inclusion.