Creating LAIA Foreword
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Creating LAIA Foreword The lack of capital and support has been a constant refrain a feasibility study on the potential of a women-focused heard from female entrepreneurs at every stage of growth. LA incubator and accelerator, hence this publication A recent report by JPMorgan Chase and The Initiative for of Creating LAIA: The Feasibility of a Women-Focused a Competitive Inner City (ICIC) found that women (and Incubator & Accelerator in Los Angeles. minorities) “are not participating in high-tech incubators and accelerators at the same rates as their white, male Creating LAIA is the definition of collaboration - what counterparts.” women do organically. Although it was ofcially and adroitly written by We Are Enough Executive Director and After I gave my 2015 TEDx Talk, “Why You Should be Sexist Co-founder, Delilah Panio, the final product was birthed by with Your Equity Capital,” I was surprised by how many many. Along with the women entrepreneurs and women- women entrepreneurs approached and requested to meet focused incubator and accelerator leadership listed in with me – each emotionally describing their reactions to the appendix, we have had conversations with or have what I thought was the unemotional subject of finance and listened to many female investors and entrepreneurs who money. The majority of these women were small business have informed the conclusions reached in Creating LAIA. owners who articulated stories of the difculty in growing To name a few – Monica Dodi, Kara Nortman, Efe Epstein, their businesses, specifically the lack of support and Dana Settle, Kesha Cash, Carman Palafox, Noramay capital. I soon learned that many women had an emotional Cadena, Adena Smith, Diane Manuel, Ana Quintana, Darya and insecure relationship with money. But not because of Allen-Attar, Arlan Hamilton, Tara Roth, Erin Shipley, Judy the frequently assumed and stated fallacies that women Hackett and Jesse Draper. “aren’t good with” money or “don’t care about” making money – it’s due to the systemic and systematic inequities We are in an extraordinary time for women. Around the and barriers that have been a constant for women business world we are not afraid to use our voices and influence to owners, especially women of color. efect change. Moments of injustice are transforming into movements towards equity – from the Women’s Marches It was with all these women in mind that I had a to the record number of women in Congress to #MeToo conversation, a year later, with Antonio Manning, former and TIME’S UP. executive at JPMorgan Chase, about the lack of diversity and inclusion in the Los Angeles tech and venture capital There is currently an abundance of capital flowing to and ecosystems. I explained (more like complained) that since programs created by and for men. BUT women are almost I entered venture capital in 1999, the number of women 51% of the Los Angeles and the US populations (just under venture capitalists and women receiving venture capital 50% of the world’s). There is no rational - or frankly sane had decreased from 10% to 6% and from 3% to 2.2% - reason why these disparities exist when women control respectively even though more women, especially women $11T and will inherit the majority of the capital in the U.S. of color, were entering both these sectors. Also, at 4%, the environment wasn’t much better for women seeking There is enough... WE are enough. commercial loans, even though research consistently shows that businesses owned or led by women were more successful than those by men. At the same time, I had agreed to become an Executive Tracy Gray is the Founder of We Are Enough and the Founder/Managing in Residence (EIR) at the Los Angeles Cleantech Incubator Partner of The 22 Fund. (LACI) and chair of LACI’s Diversity in Entrepreneurship Advisory Council. Antonio asked me if there was an incubator focused on women. I was silent for an uncomfortably long period of time because 1) the question had never occurred to me and 2) I didn’t know the answer. I later found out that one did not exist in Los Angeles and Antonio suggested that someone should conduct Creating LAIA Table of Contents 1. INTRODUCTION ............................................................................................................................................................................................. 1 Overview ...................................................................................................................................................................................................... 1 Background ................................................................................................................................................................................................. 2 Methodology and Scope .......................................................................................................................................................................... 2 2. STATE OF WOMEN-OWNED BUSINESSES ........................................................................................................................................... 3 The Numbers ............................................................................................................................................................................................... 3 Profitability .................................................................................................................................................................................................... 4 Access to Capital ........................................................................................................................................................................................ 4 Why It Matters .............................................................................................................................................................................................. 6 3. BUSINESS ACCELERATION PROGRAMS ............................................................................................................................................... 7 History of Acceleration Programs .......................................................................................................................................................... 7 Types of Acceleration Programs ............................................................................................................................................................. 8 Categories of Incubators and Accelerators ......................................................................................................................................... 10 Core Components ...................................................................................................................................................................................... 12 Business Models ......................................................................................................................................................................................... 12 Success Metrics .......................................................................................................................................................................................... 13 4. ACCELERATION PROGRAMS FOR WOMEN ......................................................................................................................................... 16 Limitations and Accessibility ................................................................................................................................................................... 16 Women-Focused Incubators and Accelerators .................................................................................................................................. 16 Other Programs for Women-Owned Businesses ............................................................................................................................... 19 5. LOS ANGELES MARKET ANALYSIS ......................................................................................................................................................... 20 Market Overview ........................................................................................................................................................................................ 20 Women-Owned Businesses in LA .......................................................................................................................................................... 21 LA Incubators and Accelerators ............................................................................................................................................................. 22 Women-Focused Business Programs in LA ........................................................................................................................................ 23 6. LAIA CONSIDERATIONS AND RECOMMENDATIONS ........................................................................................................................ 26 Objectives, Vision and Mission ............................................................................................................................................................... 26 Target Market .............................................................................................................................................................................................. 27 Location