Accelerator Aids Minority Entrepreneurs

Accelerator Aids Minority Entrepreneurs
Leader: Derek Smith is the founder and CEO of Plug In Ventures in South L.A. (Photo by David Sprague)

South Los Angeles-based nonprofit Plug In Ventures saw demand for its accelerator nearly double in just a year. The nonprofit, which supports early-stage companies founded by Black and other minority entrepreneurs from underserved communities, received applications from 138 different startups vying for eight spots in this year’s 12-week accelerator program.

Plug In Ventures ultimately narrowed down this year’s collection of submissions to a cohort of founders who’ve launched technology startups in the health care, fintech, gaming and climate industries.

This was Plug In’s fifth class of founders.

“We basically get early-stage startups ready to grow and scale their companies through venture capital or directly through the marketplace,” said Plug In Ventures founder and Chief Executive Derek Smith. “Less than 2% of venture capital flows into Black and brown entrepreneurs. We believe we can solve that problem by being intentional and deliberate and really providing founders coming from unlikely places with a built-in network to really help them accelerate their businesses.”

Returning to his roots

Leader: Derek Smith is the founder and CEO of Plug In Ventures in South L.A. (Photo by David Sprague)

Smith grew up in South L.A. but started his career on the East Coast, where he worked in advertising on New York’s Madison Avenue. He later spent time on business development in the digital media space and also launched a couple of his own companies.

“As an entrepreneur starting a business, I always felt like there was some underestimation in my background or in my profile, which didn’t really fit this cookie-cutter mold I think most venture capital or investors look for,” Smith recalled. “So, I know what it feels like to be underestimated or to feel like you don’t fit the bill in terms of what someone needs to look like, what their pedigree needs to look like to build and operate a business.”

Smith said he returned to Los Angeles around the time that Santa Monica, Playa Vista, Pasadena and Venice were beginning to establish themselves as miniature tech hubs emulating Silicon Valley, and he saw an opportunity to assist the innovation being developed by South L.A. startups.      

“I really wanted to rewrite the narrative of what South L.A. means, how people think about it and really how people who live in South L.A. think about South L.A. in terms of opportunity,” Smith explained. “Our vision is we want to see the next wave of Googles come out of unlikely places. And we think we have the social capital and the network and the resources to really engineer that socially.”

Plug In Ventures was officially launched in January 2015. Smith said the nonprofit’s accelerator program features a twice-weekly schedule of rigorous workshops and classes led by other successful entrepreneurs, investors and subject matter experts.

Plug In Ventures also introduces founders to investors and helps them to network and build industry relationships – assistance Smith said the nonprofit typically provides to cohort members for at least 12 months after the accelerator program wraps up.

Funding for the accelerator primarily comes in the form of grants and sponsorships from companies like Nike and Verizon as well as law firm Gunderson Dettmer and the California Healthcare Innovation Fund. Smith said Plug In Ventures hopes to soon offer two accelerator programs per year, and he’s expecting revenue generated this year from grants and sponsorships to be up roughly 30% or 40% over 2023’s total.

Success story

Although L.A. is home to many Westside and downtown-based accelerators, Plug In Ventures stands for its focus on Black and other minority innovators and its South L.A. location.

The nonprofit has accelerated nearly 50 startups through its now five founder cohorts, and Smith was quick to mention one of the accelerator’s brightest stars: Kameale Terry, the chief executive and co-founder of ChargerHelp!, who participated in the nonprofit’s third annual cohort.

Terry grew up in South L.A., and she helped to launch ChargerHelp! in January of 2020 after working for years at a company that developed software used in electric vehicle charging stations.

According to Terry, roughly 30% of the nation’s EV charging stations don’t work properly when a customer pulls up, and about 90% of those malfunctioning stations are suffering some sort of software-related problem. Terry and co-founder Evette Ellis created ChargerHelp! to help fix those problems, and Terry said the assistance she received from the Plug In Ventures accelerator played a big role in the success of ChargerHelp!’s series A funding round that wrapped up in early 2023, during which the startup raised $17.5 million.

“It was super helpful to have multiple workshops around fundraising and to receive all of the feedback and critiques and support around refining our pitch and our deck,” Terry said. “What I had been struggling with is how to tell our story. … Being a part of Plug In, where it’s more industry agnostic, if I can communicate clearly to their coaches what I’m doing, it more than likely means that if I’m chatting with an investor who’s not well-versed in my industry, then they would [also] understand what I’m doing.”

Smith said providing that brand of assistance to innovative Black and other minority startup founders is precisely what Plug In Ventures is all about.

“Investing in entrepreneurs in these unlikely places is really a huge opportunity we’re overlooking in the U.S., and we need to double down on this,” Smith said, pointing to ChargerHelp! as a company that’s using innovation to create new climate industry jobs while solving critical infrastructure problems.

“Let’s shift away from this traditional way of thinking about, ‘How do we solve pollution? How do we solve homelessness? How do we solve health care?’” Smith continued. “Let’s double down on innovators and make bets on talented and promising entrepreneurs coming from unlikely places that are bringing to market solutions that are going to really transform not just the city, the state, but the country and the world. … That’s what we’re betting on: That we can use capital to really yield positive impact across the culture and society.”

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