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BDC’s $250M Boost for Inclusive Entrepreneurship in Canada

BDC | Release | Jun 20, 2024

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BDC Announces $250 Million Investment to Empower Diverse Entrepreneurs in Canada

The Business Development Bank of Canada (BDC) has reaffirmed its commitment to fostering inclusive entrepreneurship by announcing a $250 million investment to help majority-owned Indigenous, Black, and Women-led firms to help overcome long-standing obstacles to work towards establishing a more diversified and dynamic entrepreneurial ecosystem in Canada.

How Will $250 Million be Allocated?

Acknowledging the funding gap that new diverse firms are faced with, BDC has launched a $50 million program to promote early-stage enterprises run by women, Indigenous, and Black entrepreneurs. This program offers financial aid as well as key training to businesses with revenues under $3 million, assisting them in overcoming challenging entry barriers and building trust in mainstream financial services.

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BDC Capital, the bank's investment section, has introduced two new $100 million platforms aimed at Indigenous and Black-led firms. These efforts are intended to supplement the existing $500 million Thrive Platform, which helps Indigenous and Black women entrepreneurs. By collaborating closely with community leaders, BDC hopes to build supportive and effective investment environments that are suited to the requirements of these areas.

To ensure that inclusion is included into all aspects of client service, BDC has formed a new Inclusive Entrepreneurship Team to implement region-specific programs that are targeted to specific requirements of minority entrepreneurs, improving both accountability and the impact of business development efforts.

Well Documented Challenges for Diverse Entrepreneurs

Current research identifies substantial barriers that diverse entrepreneurs encounter while raising finance. According to studies, minority-owned firms have a more difficult time obtaining capital than non-minority enterprises. Systemic biases, a lack of access to networks, and low faith in traditional financial institutions all contribute to these inequities. According to a research published by the Canadian Venture Capital and Private Equity Association (CVCA), Black and Indigenous businesses earn a disproportionately low share of venture capital investment.

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Similarly, the Brookfield Institute for Innovation and Entrepreneurship found that women and minority entrepreneurs are less likely to acquire bank loans and rely more on personal resources and informal funding sources. These obstacles highlight the importance of specific initiatives, such as those launched by BDC, in levelling the playing field and supporting the growth of diverse Canadian firms.

Lise Birikundavyi, Managing Partner, BKR Capital:

“With less than 0.5% of venture capital dollars in North America going towards Black entrepreneurs, there is a clear gap to fill. Since we started our fund focused on Black founders, we have seen an incredible amount of quality opportunities, and we believe it is great news to see an organization like BDC join forces to create a more diversified and robust venture capital industry.”

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By addressing systemic hurdles and providing targeted support to Indigenous and Black-led firms, BDC is helping to create a more fair and diverse entrepreneurial landscape. The $250 million investment will spur innovation and economic progress while more accurately reflecting Canada's diverse population.

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