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‘Wrong direction’: Report reveals investment shortfall for female, minority Miami tech company founders

·5 min read
Cortesía/Aire Ventures/Leigh Ann Buchanan

For all the success Miami tech has experienced the past year, it continues to suffer a deficit in support of female- and minority-owned — especially Black-owned — businesses. And now there are data to back up the claims tech investors’ support of these groups is falling short.

Aire Ventures, the new nonprofit from former Venture Cafe Miami executive director Leigh-Ann Buchanan, released a report that says despite its progress, Miami’s tech ecosystem continues to throw up barriers to equitable access to capital. The nonprofit compiled survey responses from more than 500 South Florida community members, from company founders, investors and academics to government officials. This pool was asked to score various aspects of the local tech ecosystem’s diversity, on either a 12- or 25-point scale.

The availability of investments to underrepresented groups consistently ranked lowest.

That finding was a subject the Miami Herald explored in a recent story that revealed tech businesses owned by Black founders are finding ways to succeed in spite of the challenges. Black Miami tech company officials said aire ventures’ findings were indeed predictable.

Brian Brackeen, general partner at Lightship Capital, a venture fund focused on women and minorities, said in a statement the nonprofit’s findings are “both frustrating and unsurprising.”

“There is a clear need for Miami to have more and larger investors focused on minorities,” Brackeen said. “The numbers are poor and trending in the wrong direction, and now is the time for ecosystem action versus delay.”

In an interview, Buchanan said her group’s findings should not be seen as giving Miami a failing grade.

“We now know where to prioritize our resources and energy to make the (tech) community more inclusive,” she said. “A lot of times, without something like this scorecard, you’re just throwing things at the wall.”

Miami’s ecosystem remains in its infancy, she said, and the scorecard hopefully will help decision makers plot the continued growth of the ecosystem in real time. Contrast that with Silicon Valley and New York, she said, where that work must be done “looking backwards.”

So what are Miami’s strengths in the tech arena? Buchanan said the city now has a galaxy of programs designed to help early and mid-stage startups. She cited Endeavor Miami, 500 Startups, TheVentureCity, and the Bayside Foundation as examples. In fact, the survey found there are instances in which these programs inadvertently overlap and compete with one another.

“The challenge there is having the ability to navigate those programs to find the best fit for your business,” she said. “These programs often are duplicating efforts, or it’s hard to know what’s in the best interest of your business in terms of committing to one of them, and when.”

So what are the solutions? Kevin Cadette, executive director of Black Angels Miami, a nonprofit that works to connect company founders with investors, said that since starting up last year, his organization already has deployed more than $1 million in upfront investment to startup leaders. There are two key ways forward, he said: Changing the “color of the money” itself through catalyzing more minority venture capitalists, and changing the views of the rest of the investment community.

It is not clear which of those is happening more quickly, one reason why progress on diversifying access to capital remains an elusive goal, he said.

“It’s really hard,” Cadette said. “It’s not like people start thinking differently automatically, though it may be present of mind. But you need to have the conversions, or have different perspectives in the room, or you need to diversify those in the room. Someone can’t automatically change how they perceive a founder overnight. That’s why they call it subconscious bias.”

eMerge tech conference names as title sponsor

Miami’s annual eMerge Americas tech conference announced crypto exchange as its title sponsor at eMerge’s two-day La Casa event last week. Terms of the deal were not disclosed. CEO Peter Smith said his company, previously based in the United Kingdom, would be filling about 200 jobs at a new Wynwood office that would come with a branded edifice.

“I believe that all aspects of our lives will be touched by blockchain technology within the next decade,” Manny Medina, founder and executive chairman of eMerge Americas, said in a statement. “We’re honored to strategically partner with with the intention of being a point of entry for organizations throughout the Americas to embrace this innovative technology.”

Miami firm EveryMundo sold for $80 million in cash

EveryMundo, a 15-year-old Miami company providing airlines with performance marketing solutions, was recently acquired for $80 million in cash and $10 million in equity. The buyer was Houston-based PROS Holdings, a software group focused on optimizing shopping and selling experiences.

“Airlines had a lot of irons in the fire before the pandemic, but the crisis forced them to focus on upping their online marketing skills,” Seth Cassel, president of EveryMundo, told travel site “That was serendipitous for us.”

EveryMundo now has about 140 employees worldwide.

Algorand backers launch $500 million fund

Backers of Algorand, a blockchain alternative to Bitcoin, have launched a fund in Miami to raise $500 million for investments into the technology. Algorand was founded in 2017 by Silvio Micali, an Italian computer scientist, to address challenges inherent to blockchain technology. The Miami-based backers, Borderless Capital, said it has already invested in over 100 companies the past 30 months. The Algorand blockchain also was selected earlier this year as the so-called “base layer” to El Salvador’s initiative at creating a cryptocurrency-based economy.

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