The Schultz Family Foundation, founded by Sheri Schultz and Starbucks interim ceo Howard Schultz, today announced an initial allocation of $100 million to create the Entrepreneurs Equity Fund (EEF) to invest in diverse businesses as vehicles for fostering a more inclusive economy, creating jobs, and building wealth in historically marginalized communities.

“America’s future rests on our entrepreneurial fire. But in recent years, the spark within many entrepreneurs has struggled to find the oxygen to burn bright. The causes are many: predatory practices, lack of access to capital and social networks, the need for learning and community, and the systemic failures that lead some to not even try,” said Howard Schultz, Schultz Family Foundation co-founder and Starbucks interim ceo. “For too many people today, the American dream feels out of reach. I find this to be unacceptable, which is why we are launching this fund to invest in diverse businesses that have unfairly been excluded from opportunity for too long despite their enormous potential to help rebuild our country.”

Despite the potential for diverse businesses to be powerful economic catalysts, many face persistent, structural inequities and barriers. Access to capital has long been the primary impediment to the growth of diverse businesses, particularly access to competitively priced capital. To that end, EEF will work to accelerate the growth of emerging, high-potential, diverse-owned businesses by making direct equity investments and increasing access to non-predatory sources of capital, including revenue-based financing and low-cost working capital.

“Every person, regardless of race or background, deserves an equal opportunity to realize their dreams. Unfortunately, in America the color of your skin and where you grew up are the most reliable predictors of economic success. We believe that investing in underrepresented entrepreneurs and diverse-owned businesses will be an efficient and effective means for forging a more inclusive economy, reducing the wealth and employment gaps, and strengthening our democracy,” said Tyra A. Mariani, president of the Schultz Family Foundation.

According to a September 2020 Citi report, providing fair and equitable lending to Black entrepreneurs alone over the past 20 years would likely have resulted in the creation of an additional $13 trillion in business revenue and potentially created 6.1 million jobs per year.

Data suggest that strengthening emerging, high-potential businesses led by diverse founders (e.g., businesses that are growing revenue at a 15 percent annual rate) and positioning these businesses to become middle market companies (e.g., generating annual revenue of $10 million to $1 billion) has the potential to be a powerful way to increase economic and social outcomes for historically disadvantaged communities.

Recognizing that all businesses need more than just capital to grow, EEF will also underwrite philanthropic grants designed to improve the operating environment for underrepresented entrepreneurs and diverse-owned businesses by supporting them with training, executive mentoring, data collection, research and policy development.

To lead the effort, the Schultz Family Foundation has hired David Hinson as managing director and head of EEF. With over 20-years of executive experience, Hinson brings extensive knowledge of capital access, acquisitions and global business development for diverse-owned businesses. Prior to joining the Foundation, he served as Senior Vice President in the Private Wealth Services division of Ategra Capital Management LLC. Previously, Hinson was appointed National Director of the Minority Business Development Agency at the U.S. Department of Commerce under the Obama Administration. In this role, David served as senior advisor to the Administration on the growth and global competitiveness of the nation’s eight million minority-owned businesses. David led the Agency to its highest five-year performance, providing over $19 billion in contracts and capital to diverse businesses. Before joining the Obama Administration, David was Founder and President of Wealth Management Network, a New York City-based wealth management advisory practice. He also held management-level positions at Envestnet and Bank of America.

“There are a growing number of innovative, growth-oriented, diverse-owned businesses poised to join the middle market. But for too many of them, capital is out of reach because too often capital flows to the best relationships, not the best deals,” said Hinson. “By supporting these companies, we believe that they will not only outperform in terms of financial returns but lead the way in creating positive social outcomes, jobs, and wealth in historically underserved communities.”