The entrepreneurs in this year’s Multicultural Innovation Lab took advantage of world-class resources while being challenged to push themselves and their companies to the next level.
Alice Vilma, Co-Head of the Morgan Stanley Multicultural Innovation Lab, likes to say that earning admission to the Lab is harder than getting accepted to Harvard, pointing to the rigorous process required to earn just one of up to of 20 spots in the firm’s in-house accelerator for early-stage tech and tech-enabled startups led by multicultural and women founders.
The founders who make it into the program would agree. “We went through several rounds of review and several interviews, submitting financial statements and ensuring we’d done due diligence—there is so much we had to do,” says Claire Sulmers, a member of the latest Lab cohort and the founder and CEO of Fashion Bomb Daily, an integrated fashion media and e-commerce company that empowers emerging multicultural designers.
Then comes the hard part. “Every Monday morning at 9 o'clock, I would have a meeting with the Lab board of advisors,” says, Anthony Frasier, CEO and founder of ABF Creative, a multicultural podcast network and another participant in this year’s MCIL winter cohort. “Ten people sitting around a table focused on every detail of my company. ‘What did you do this week? What revenue did you bring in? We need you to pitch again.’ It was intense. It was nerve-wracking. And it was scary at some moments, especially when I had no news to share.”
Anyone thinking they will spend five months simply soaking up pro tips and hobnobbing with thought leaders doesn’t understand that the Lab, now in its fifth year and recently named one of the world’s best financial innovation labs by Global Finance, is more bootcamp than summer camp. The goal isn’t only to teach founders to hone their pitch and craft a “value prop,” but to challenge them to answer hard questions and acknowledge tougher truths. To face what Sheri Atwood, another member of the latest cohort and the founder of SupportPay, an app that lets users easily manage child and spousal support, calls “the good, the bad, the ugly and the super ugly.”
When Frasier lost a big transaction during his time at the Lab, Carla Harris Morgan Stanley Vice Chairman and Co-Head of the Lab, pushed him to go back to the client and try again. “She gave me advice on why we lost that deal and what a more successful approach might be,” he says. “And using that advice and that approach, we actually ended up winning the deal back. And it’s arguably one of the biggest deals we’ve ever won.”
The reward for all that hard work and stick-to-it-iveness? For starters, $250,000, which represents Morgan Stanley’scash contribution to each company. A less tangible, though just as beneficial, advantage is the network of support that you won’t necessarily find at any other accelerator. “One of the things I was super impressed by is that everyone on the Morgan Stanley team wakes up every day, and thinks about how they can help me be successful,” says Dennis Cail, CEO and founder of Zirtue, an app that takes the guesswork and awkwardness out of repaying a friend or family member by digitizing loans on a simple online platform. “And that's a powerful thing to be a part of. I think it's going to be a big reason why Zirtue is going to be successful as well.”
Indeed, Harris, Vilma and the Lab team are committed to doing all they can to create a more equitable funding landscape for underrepresented founders. “Our survey found that during 2020, progress was made in venture capitalists’ attitudes and actions regarding the importance of investing in women and multicultural entrepreneurs, but a lot more needs to be done to close the funding gap for this group,” Harris says.
The Lab’s apex moment—the culmination of five months of hard work—is Demo Day, during which participants, along with other startups from corporate partners, HearstLab and Newark Venture Partners, pitch their companies to potential investors. This year’s virtual event drew over 400 attendees, including venture capitalists, angel investors and private equity firms. All were treated to an impressive array of companies, including health care, HR tech, e-commerce, real estate, business analytics, fintech, learning and development, and enterprise software businesses.
What they share is a passion to “be the change you’d like to be in the world,” Sulmers says. And, of course, they now also share their status as Multicultural Innovation Lab alums. A total of 43 companies have participated in the Lab since its inception, garnering a total of more than $80 million in funding since doing so—funding that they might not otherwise have had access to.
Says Harris, “The goal of the Multicultural Innovation Lab is to provide diverse founders with much-needed access to investors—along with the tools, resources and connections they need to grow and thrive—in order to transform the investing landscape.” This latest group of founders, having risen to the challenge of proving themselves ready and able to take their companies to the next level, are well on their way to doing just that.