The Minority Business Roundtable (MBRT) announced the formation of the MBRT Venture Capital Fund, Inc.
The Fund intends to generate return on investments by applying a proven model for early-stage venture capital for small, minority- and women-owned businesses. The Fund already has taken a position in three companies and will invest in 15 to 20 new, high-potential companies each year.
"Access to capital is a significant concern to small- and minority-owned businesses across the country," said Roger A. Campos, chairman, MBRT Venture Capital Fund, and president and chief executive officer, MBRT. "The MBRT Venture Capital Fund fills a need for early- to mid-stage companies with innovative and high-potential business concepts in diverse areas and industries."
Founding partners of the MBRT Venture Capital Fund include the Artemis Strategy Fund, Inc. and The Corporate Finance Institute, Inc. "Historically, relatively little capital has been available for small and minority businesses, even in an entrepreneurial climate," said Rebel Holiday, president, MBRT Venture Capital Fund, and president, Artemis Strategy Fund.
"The MBRT Venture Capital Fund will seek small, minority- and women-owned businesses that have developed proprietary products, strong margins, and excess rate of return, exceptional management, near-term revenues, and strong potential for stock liquidity."
Minority-owned companies have difficulty attracting capital for several reasons. Traditional venture capital investment groups often provide mid- to late-stage financing, but many minority-owned companies need investment earlier in the business life cycle. Those investors who are willing to finance early-stage companies often require an equity position or levels of control that can jeopardize the company's minority-business certification status. These conditions often eliminate the possibility of investments in high-potential, early-stage companies, even those with viable businesses,
excellent products, well-defined market niches, effective marketing strategies and capable management teams.
One of the key findings of the Kaufman Foundation's "Minority and Venture Capital" report is that "Minority enterprise venture capital investing is very profitable. "
"The potential rate of return is huge," said Tom Trexler, president, The Corporate Finance Institute, Inc. "This niche market has been vastly underutilized."