A New Model for Investing in Minority-Founded Startups
Will NASA establish a new model for investing in minority-founded startups? Many experts believe their new accelerator, in partnership with Starburst Aerospace, the Minority Serving Institution Space Accelerator, lays the groundwork to launch America’s next wave of Space entrepreneurs.
In the wake of the George Floyd murder in May 2020, corporate America pledged $50 billion in investments into Black communities. From Silicon Valley to Wall Street, companies proclaimed, “Black lives matter.” A global grassroots movement against police brutality forced corporate America to take a public position. Sadly, many of these pledges were publicity stunts.
In Venture Capital, investment in Black founders remains disproportionally lower than in peer founders from non-Black communities. Roughly 1 percent of venture capital investment goes to Black founders. Similarly, only 2 percent of venture investment goes to women-founded startups. In 2021, 40 percent of new businesses were started by women, with 47 percent of those companies started by minority women.
There are many reasons venture capital investments do not flow into minority-founded startups. Exclusionary professional networks, racial bias, and lack of industry representation, to name a few. All the while, this is set against a global investment backdrop where venture capital investment reached a record high, totaling $633 billion, a 93 percent increase from the previous year and a 10x increase over the past decade.
On June 2, 2022, NASA launched its inaugural Minority Serving Institution (MSI) Space Accelerator Program. The program is in partnership with the Agency’s Science Mission Directorate (SMD), its Minority University Research Education Project (MUREP), the Jet Propulsion Laboratory (JPL), and Starburst Aerospace. It is the first of its kind innovation program that brings together tough-tech scholars to advance the agency’s goals for improving its future space missions. Specifically to help NASA make significant advancements in machine learning, artificial intelligence, and the development of autonomous systems.
On Selection Day, government, aerospace, and venture capital experts attended the event and joined panel discussions. There was a panel discussion on the importance of engaging underrepresented communities for science at NASA. During this discussion, Bhavya Lal, Associate Administrator for Technology, Policy, and Strategy at NASA, said, “the best way to predict the future is to create it.” This panel discussion was also joined by Chris Mattmann, the Chief Technology and Innovation Officer at the Jet Propulsion Laboratory. He offered unique insights on the importance of diversifying the talent pipeline to help national space missions remain successful. Watch the conversation.
The second panel discussed quantifying the economic impact of engaging underrepresented communities. This panel was joined by Kobie Fuller of Upfront Ventures, Mac Conwell of Rarebreed Ventures, and Sherman Williams of AIN Ventures. These distinguished investors analyzed Black entrepreneurs’ unique challenges when starting a company and navigating venture capital investment. Click here to watch the conversation.
This year’s top three finalists were: California State University, Northridge; Fayetteville State University; and the University of Massachusetts, Boston. Each institution was awarded $50,000 in prize funding and admission into the MSI Space Accelerator program. The 10-week program offers participants a unique opportunity to receive mentoring from autonomous experts at the Jet Propulsion Laboratory (JPL), learn business fundamentals to build a repeatable and scalable business model, and access the broader venture capital community.
Ultimately, the new accelerator program enables NASA to satisfy its mission requirements by innovating its procurement process and sourcing from minority-founded space-based startups. The MSI Space Accelerator Program aligns with the directorate’s goal to foster innovation, promote entrepreneurship, and develop new technologies at a lower cost.
Learn more on the NASA x Starburst MSI Space Accelerator Program.