Of all the businesses in the private sector, 39% are owned by women. Of those, 47% are owned by women of color. Women-owned businesses produce nearly two trillion dollars in revenue annually, but only 25% of women seek financing to open, relying instead on bank loans and credit cards. This may largely be due to the fact that only 2% of venture capital is given to women, and they typically start their businesses with 50% less total upfront capital than that of their male counterparts. And when that data is narrowed to Minnesota, the numbers are even more grim. 85% of all venture capital is given to businesses opening in California, New York, and Massachusetts.
This is precisely why Lunar Startups was created. A new model for high-growth startups, their focus is to serve as an incubator designed to be inclusive for women, people of color, and other high-potential entrepreneurs. They have studied the best practices of accelerator programs throughout the country, and pulled those together into a human-centered program design. As Danielle Steer, Managing Director, told Tech.MN recently, “There is more than just a moral and ethical case for making things better for women and people of color in startups, there’s really a good business case.” It is estimated that $300 Billion is left on the table by underinvesting in minority owned businesses. And according to Greater MSP research data, 15% of gender diverse and 35% of culturally diverse companies are more likely to outperform their industry median.
Lunar Startups provides a year-long, fully supportive accelerator program, designed around the needs of its participants. Scheduling programming around daycare drop off and pick up times, holding workshops for one to two hours over the lunch break so people don’t need to miss work (and miss out on money) to continue to build their businesses. They also provide wrap-around services such as legal and business advice from over 70 volunteer industry experts. The Lunar cohorts provide a space where minority entrepreneurs can shed some of their other identities, and focus on being founders of amazing companies, learning, growing, and challenging each other to thrive.
The companies chosen for the Lunar cohorts are all in stages of development, and are, as Steer put it, “similar enough to learn on a trajectory, but different enough to not compete with each other.” Some of them need to focus on securing funding, while others need assistance with more of the operational, strategic, and business building aspects.
One of the first founders to participate in the Lunar program was Caroline Karanja. Her company, 26 Letters takes an innovative approach to the way they help organizations find solutions to ensuring diversity and inclusion. By providing an e-suite of inclusion products, 26 Letters gives businesses the data and tools to create inclusive onboarding and retention processes, resulting in more diverse and engaged teams. Their goal is to use tech and data to increase cognizance, empathy, and understanding. Going into the first Lunar cohort, 26 Letters was already an established brand and company, but Karanja found assistance from the cohort in working through some of the growing pains she was experiencing, and getting some guidance on strategic planning and process building.
Another participant in the first cohort is a company called Dojour. Founded by the O’Phelan brothers, Dojour provides a targeted marketing application for events, users follow the calendars of organizations of their choice, and then those organizations can use the app’s aggregated data to tailor specific messaging to people who are more likely to be interested in their events. This allows organizations to be more intentional in their messaging, creating less of a “spam” feeling to their marketing, and also allows users to customize their feeds with events that are actually of interest to them. The application can work in conjunction with data from existing ticketing sites, such as Eventbrite, and boasts higher conversion and open rates than traditional event marketing alone. Co-founder Conor O’Phelan described his experience as incredibly helpful. As O’Phelan said, “[they] had no idea what to expect, but everyone in the program was exceptional.” They all were at differing points in their startups, and could ask each other questions and learn from each other throughout the year-long program. “Being an entrepreneur can be a lonely space, and having someone there to talk through things with is hard to beat.”
Lunar Startups is hosting their UnDemo Day event for the first cohort on September 30th from 6-8 p.m. This will be a chance for all of the first round of founders to celebrate their accomplishments and show the hard work they’ve done. As Danielle Steer said, “Entrepreneurship is the hardest job in the world to choose to do.” By attending this event, even if you’re not a monetary investor, you are helping to amplify the cohort’s important work to your networks through tweets, word of mouth, and who knows, you may find some new technology that you can’t go one more day without.