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UMSL’s DEI accelerator is ‘beacon of hope’ for under-represented founders

This article appeared in the April 2022 issue of Technology Transfer Tactics. Click here for a free sample issue or click here to subscribe.

TTOs have become heavily focused on incorporating diversity, equity, and inclusion (DEI) principles into their organizations, looking to move the needle on inventorship and entrepreneurship among under-represented populations. But how the talk about DEI gets translated into practice is still a work in progress for many universities.

Not so at the University of Missouri-St. Louis, which has created a DEI-specific accelerator program to support and fund start-up founders from underserved communities. The purpose-driven, university-led DEI accelerator is a concept any university could implement, its leadership says, since it really acts like any other accelerator program but with a focus on the needs of marginalized groups.

The genesis of an idea

The appropriately dubbed the UMSL Diversity, Equity and Inclusion Accelerator launched in October 2020, during the height of the pandemic. Dan Lauer, executive director of UMSL Accelerate — a more general student entrepreneurship support program at the school — had begun contemplating DEI programming a few years earlier, and then lined up financial backing from electric power company Ameren, investment firm Edward Jones, and benefits management company Express Script, all of which have a significant corporate presence in the St. Louis area.

“We said, ‘let’s raise enough money in pass-through philanthropy to fund six underrepresented founders … and put them through this best-in-class experience,’” Lauer explained. The DEI accelerator includes the typical 8- to 10-week boot camp with mentors, education on start-up best practices, and networking opportunities. Plus, UMSL provides each entrepreneur with a paid student intern and a faculty advisor who can help with writing grant proposals or even simple business tasks. Each of six winning founders in the first cohort received a $50,000 non-dilutive grant.

Lauer notes that UMSL’s backyard was a perfect setting for the program. “St. Louis is a pretty black-and-white city; we have our issues, and access to capital for urban founders is really hard. The statistics are not good. So, our mission is to be a beacon of hope.” The fact that the program initially received 437 applications, Lauer adds, “demonstrates need.”

According to Lauer, all six founders in the initial cohort who received funding are thriving today. In December, the DEI Accelerator graduated its second cohort, selecting five business founders from among 189 start-ups, awarding each one the same $50,000 non-dilutive grant tapped in the first cohort.

“We think we’ve uncovered a little bit of a new model for universities, kind of leading from the front,” Lauer says. “DEI is hot right now, everyone’s talking about it; we’re creating action around it and looking to make impact and measure it.”

Success factors

The primary ingredient for success in the DEI accelerator is investment from university and corporate leaders in terms of both dollars and people, Lauer stresses. “We enjoy support from our chancellor and provost. We have great corporate sponsors, not only to write checks, but also to engage as executives in residence, meet the founders, and foster networking,” he says.

Other essential factors include clear definition of outcomes and a high bar on culture.

“We’re going to succeed on how well we pick [entrepreneurs] and how well they scale. So, really understanding business models and fully vetting the founders, coaching them up and making introductions, it takes a village. I don’t think you can do it small; you’re either all in or you’re not.”

Lauer is not aware of other universities that have launched accelerators focused solely on DEI, which differentiates the program. It encourages applications from diverse business founders who are underrepresented and overlooked, regardless of their socioeconomic background, education level, race, ethnicity, age, gender, immigration status or lived experience.

“We were looking not only for diverse founders but also diverse solutions. We have everything from tech to Main Street. We were trying to be vertically industry-agnostic. We were looking for both a good business model and a coachable, strong founder.”

In the first round, start-ups funded included a developer of a robotic lawnmower, a sustainable urban farm, a furniture assembly company, a vegan-friendly nail polish line, a Filipino pop-up barbeque restaurant, and a company making a customizable, hands-free kickstand for smart phones. The second cohort includes a company helping organizations provide accessible and inclusive digital experiences for those with disabilities, a skincare products company, a branding and marketing service focusing on entrepreneurs of color, and a gourmet popcorn shop.

Challenges and opportunities

The DEI accelerator is succeeding despite the fact that the first cohort was run virtually in the middle of the shutdowns brought on by the COVID-19 pandemic.

“Obviously, these accelerators work best when there’s spontaneous relationships, with founders and mentors milling together,” Lauer observes. “We’re back in session now for our second one, and we see a big difference. You can’t do this as well on the screen.”

Going forward, Lauer comments, the biggest challenge will be sustainability. “There’s always investor fatigue, owner fatigue. We’ve got to prove almost instant results in our world today, but entrepreneurship is a long-term game. Some of these [businesses] won’t harvest for five or seven years, if then. So, the challenge is keeping stakeholders engaged in this distracted world we live in, where priorities change.”

Another a long-term challenge will be measuring results, including jobs created, follow-on capital, and wealth creation. “We’ll survey the founders twice a year to try to get good data,” Lauer says.

For now, the only measurement is anecdotal. For example, the founder of the company that makes a customizable smart phone kickstand called Flipstik appeared on Shark Tank, has raised more than $1 million, has already sold more than 85,000 units, and at the end of March will begin distribution of the product in big-box stores. “That’s real traction,” Lauer said.

Also positive, Lauer asserts, are benefits of the DEI accelerator for student interns, who compete for positions to each earn $3,000 for eight weeks of work with the program’s start-ups.

“In creating these experiential learning opportunities, to me that’s the best. That [intern pay] may not sound like a lot [of money], but our students come from families with average incomes of under $40,000, and there’s growth through this program on many levels.”

Lauer sees no obstacles to other schools adopting the DEI accelerator model because — other than its intended target audience — it’s a standard accelerator program.

“There are a lot of good business programs,” he says. “There’s a lot of good entrepreneur service organizations. We’re not saying we’re any better or worse.”

But for an underrepresented population, he asserts, if the accelerator accomplishes nothing more than awarding $50,000 to deserving founders, it will make a difference “They’re buying trucks, or developing new apps. They’re able to move three or four milestones ahead to become investable. The talent is there, and the drive is there,” Lauer comments.

Contact Lauer at 314-757-2292 or lauerd@umsl.edu.


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