BCN Staff – Feb. 16, 2021 — New York City-based investment banking powerhouse Morgan Stanley today announced the selection of 10 minority and women-owned firms to participate in the fifth cohort of the Multicultural Innovation Lab. The Wall Street accelerator program is aimed at technology and technology-enabled early-stage companies in the post‐seed to Series B funding rounds, officials said.
The Multicultural Innovation Lab (MCIL) is an intensive five-month accelerator designed to help further develop and scale startups, culminating in a Demo Day and showcase presentation to the investor community. The program, now in its fifth year and with 43 total participating companies, targets start-ups with a multicultural or woman founder, co‐founder, CTO or other C-suite member that is developing innovative solutions across sectors.
Following four successful years that resulted in company acquisitions and additional funding rounds, the Lab is expanding in 2021 to support twice as many companies – up to 20 annually, split into two cohorts. Through the Lab, Morgan Stanley will make investments in these early-stage high growth companies and will support each founder’s growth and development through its ecosystem of internal and external partners.
Morgan Stanley launched the MCIL in 2017 to address inequities in funding of multicultural and women-led startups, which our research shows equals over four trillion dollars in unrealized returns. The team is led by Morgan Stanley Vice Chairman and Managing Director Carla Harris and Managing Director Alice Vilma. Together, they have had over 50 years of equity syndicate, investment banking, capital markets and structured finance experience. The Multicultural Innovation Lab, part of our Multicultural Client Strategy Group, was launched to promote financial inclusion and decrease the funding gap for diverse entrepreneurs.
“Our survey found that during 2020, progress was made in venture capitalists’ attitudes and actions regarding the importance of investing in women and multicultural entrepreneurs, but a lot more needs to be done to close the funding gap for this group,” said Harris, also head of the Wall Street investment banking giant’s Multicultural Client Strategy Group. “The goal of the Multicultural Innovation Lab is to provide diverse founders with much-needed access to investors – along with the tools, resources and connections they need to grow and thrive – in order to transform the investing landscape.”
According to Vilma, the Lab is designed to help drive positive economic outcomes for entrepreneurs of color and women by providing content, visibility, technical support and connectivity with important stakeholders who might be essential in accelerating the growth of their businesses, as well as access to an ecosystem of best-in-class global partners providing a variety of resources.
“We are excited to kick off the first cohort of 2021 to support talented, diverse entrepreneurs on their journey to success,” said Alice Vilma, Morgan Stanley managing director and co-head of the Multicultural Innovation Lab. “The curated curriculum will introduce proven tactics to grow and scale each company’s business and, as with the previous cohort, will be sure to address COVID-related management and operational decisions that founders are facing during this difficult time.”
The companies participating in the program, selected out of a record of over 700 applications received, will begin the program on February 16 and will operate in a virtual environment, using online video platforms to facilitate the Lab curriculum. The entrepreneurs receive support from a dedicated Morgan Stanley team delivering tailored experiences to help each company grow. The program will run through July, culminating in the fifth Multicultural Innovation Lab Showcase and Demo Day that will present the companies to potential investors. As noted, Morgan Stanley’s program is aimed at minority and women-owned startup firms that have moved past the development stage and are seeking post-seed funding from investors.
In the startup world, many early-stage companies get their first round of funding by tapping into loans and financing from so-called angel investors. That pre-seed funding typically comes from close relatives and friends and the company founder has invested his own money. The next step, called seed funding, is the first official equity funding stage and represents the first venture capital that startup raises. Many startups, however, never extend beyond seed funding or beyond.
The next post-seed round, called Series A, is typically when startup entrepreneurs seek money from the financial community or venture firms that invest in exchange for stake in the company. So-called Series B rounds are startup firms past the development stage. These are typically companies that have gone through seed and Series A funding rounds have already developed substantial user bases and have proven to investors that they are prepared for success on a larger scale. Series B funding is used to grow the company so that it can meet these levels of demand.
The companies that have been selected for Morgan Stanley’s MCIL winter 2021 cohort include the following:
· ABF Creative is a B2C podcast network that produces original and multicultural focused podcasts for diverse audiences.
· Abode Technologies is a nationwide real estate platform that allows property sellers to easily list, market and sell their homes at a flat fee.
· Cognitive ToyBox is an early childhood learning assessment platform that combines in-person observation with research-driven game-based assessments to evaluate students for kindergarten readiness and support early childhood development.
· Elly Health is a digital healthcare app which helps chronically ill patients manage their illness and improve their quality of life with motivational messages, exercise videos, meditation practices, symptom management, clinician classes and patient stories.
· Fashion Bomb Daily Shop is a fashion marketplace that sells pieces designed by multicultural designers to multicultural customers.
· Kanarys is a Diversity, Equity and Inclusion (DEI) focused SaaS platform that delivers companies clear metrics to diagnose, prioritize and optimize DEI efforts.
· Lillii RNB is a boutique IT consultancy whose signature software product “Freeing Returns” enables retailers to seamlessly integrate their point-of-sale systems with return management applications, saving both time and money.
· Second Keys is a property management platform that enables property managers and tenants to seamlessly facilitate rent payments, track maintenance requests, and communicate real time, to keep tenants happy and save costs.
· Support Pay is a payment platform that enables parents who live apart to manage child support and share expenses directly with each other.
· Virtual i Technologies is a risk underwriting analytics platform that allows insurers and brokers to have real-time visual data and professional assessment on inspection properties without having to travel.
· Zirtue is a relationship-based lending application that simplifies loans between friends, family and trusted relationships with automatic ACH loan payments.
To learn more about Morgan Stanley’s Multicultural Innovation Lab, click here.
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