When Portland financier Nitin Rai established the Elevate Inclusive Fund in 2016 to invest in minority- and female-owned startups, people were skeptical he'd find attractive opportunities in Portland.
He's already found 14.
"What we've shown is that there is a pipeline of really good startups that are women-led and minority-led that are investable," says Rai, the fund's managing director.
Together, the companies Rai has invested in now employ 198 people, 78 percent minority and 70 percent women. Ten of the 14 are led by female CEOs or co-founders, Rai says. Seven are Latino or black. Three are veterans.
The fund closes to investors Sept. 15, with a total of $2.3 million: $1.5 million in public funds, and $800,000 in private capital from local investors. Rai's Elevate Capital is leveraging another $1.5 million in "follow-on" investments.
Rai says winning over private investment turned out to be "quite difficult."
"People consider this high-risk," he says. "They don't want to take a risk on minorities and women."
In all, Elevate Inclusive Fund has invested $650,000 in its startups to date, Rai says. Every dollar invested in its 14 fledgling companies, he says, has brought 20 times the money through other sources.
"We serve as a catalyst and a validator," Rai says. "These entrepreneurs are just blowing it out of the water."
Seven companies in which Elevate has invested:
By the time Rai told Hue Noir CEO Paula Hayes that Elevate Inclusive Fund was investing in her startup last year, Hayes had grown frustrated by the constant need to educate white male investors who dominate venture capital about her product.
Her company produces makeup for "nuanced" skin tones—like Hayes' own "milk chocolate."
Hayes is a savvy marketer and a research chemist, but most investors couldn't see how her vision fills a gap for women of color. "They always came back and said, 'I'm so sorry, I just can't get this passed,'" Hayes recalls.
So when Rai delivered the good news in 2016, Hayes could barely keep her cool. "I thought what!? I didn't tell them, but I just said, 'Oh my God, this is happening!'"
The $50,000 investment from fund has been followed by $100,000 from other investors, and the Beaverton company now sells on Amazon.
The CEO of this natural organic babywear company, Lili Yeo, says being an immigrant, a mom and a female entrepreneur led to an isolating tendency to DIY everything.
"We really did try to bootstrap everything, because we thought that the growth was going to be on our shoulders," recalls Yeo. More valuable than the $50,000 Elevate invested, Yeo says, has been Rai's mentoring and "opening the Rolodex."
"You're seeing more women and minorities coming to the fore than ever before," Yeo says. "And yet there's a disparity in access to capital."
Blendoor's job-matching technology counteracts unconscious bias in the application process by withholding information such as a candidate's name and photo. In other words, it tries to level the playing field for job seekers. CEO Stephanie Lampkin told Forbes that its "blendscore," which ranks tech companies on diversity, "will be for companies what the U.S. News & World Report is for colleges and universities."
This clothing company's gender-bending streetwear offers hip styles and raised middle fingers. Led by CEO Emma Mcilroy, its "Wild Feminist" T-shirt has been worn by top actors, was allegedly stolen by Forever 21, and has paved the way for investments of $1.75 million.
Hemex's Magneto-Optical Detector is the size of a shoebox and costs $500 to make. The company says it can determine in a minute if a drop of blood contains malaria parasites, or sickle cell disease. It "could revolutionize how malaria is detected," Smithsonian.com says. CEO Patti White's company just landed $1.7 million to continue developing its tech, Geekwire reports.
CEO Allie Magyar used to run some of the biggest events in the tech industry, the company's website says, but struggled with the "sea of spreadsheets and emails it took to make things go." So she helped start Hubb, whose products streamline and speed up event planning and increase attendance.
Its mission is "giving the underrated salad the love and respect it deserves." The company prioritizes local and organic ingredients. Garden Bar now has seven locations in Portland, and CEO Ana Chaud plans to open another eight.
The other seven companies are: RFPIO, Agricool, Versi, Heritage Laboratories, Rezi, Scout Military and Curadite.
Correction: Due to an editor's error, this article originally misstated the amount of private capital Elevate has raised from local investors. It is $800,000.