ARC Fund Launches with Underrepresented Founders to Increase Alternative Capital for Impact Entrepreneurs Facing Scarcity of VC Money
NEW YORK, Feb. 21, 2024 /PRNewswire/ -- The ARC Fund launched three Community Rounds today to support underrepresented impact entrepreneurs raise growth capital between $250,000 and $5,000,000 over a three-month "equity crowdfunding" campaign using the Wefunder platform in response to the scarcity of capital as venture capitalists hold on to funds due to the uncertain economy, banks lend less, and interest rates remain high, forcing startups led by underestimated founders to find alternative sources of capital to survive and grow.The Kauffman Foundation reported that nearly two-thirds (65%) of new businesses will use personal and/or family savings to cover their startup costs. Without an innovative source of capital to provide a "bridge" round to get startups through this tough economic period over the next few years, many overlooked entrepreneurs will close their doors.
- By the end of 2022, adverse market conditions led to a 36% drop in overall venture capital dollars, but Black entrepreneurs saw a 45% decrease in financing.
- Women-only teams secured only 2.8% of venture capital in 2023, the lowest in four years.
- Nearly 20% of all startups have raised money at a lower valuation than they had previously, up from 5% in 2021, according to Carta.
- When looking at equity crowdfunding success percentages, campaigns run by women-only founders had an 87.5% success rate compared to 41% for men-only founders.