Technology accelerator groups in Ohio and Michigan are launching a joint program to bring the benefits of the clean energy transition to more people from underrepresented groups.
BRITE Energy Innovators in Warren, Ohio, and the Centrepolis Accelerator in Southfield, Michigan, plan to combine the strengths of their core programs to help startup clean energy businesses get to commercialization faster. The joint program will particularly focus on recruiting and helping people of color, women, veterans and people with disabilities.
“Not all of the ideas that are needed for us to achieve a sustainable clean energy economy exist right now, so there are huge opportunities and an unprecedented amount of funding right now,” said Jing Lyon, entrepreneur programs director at BRITE.
Both the Bipartisan Infrastructure Act and the Inflation Reduction Act provide increased funding opportunities for those communities. So for any entrepreneur looking to get into clean energy technology, especially for historically disadvantaged communities, “this is the right time,” Lyon said.
Drawing on strengths
The Wells Fargo Innovation Incubator, IN2, a cleantech program funded by the Wells Fargo Foundation and co-administered by National Renewable Energy Laboratory, announced a $220,000 grant for the program in May. Matching funds will come from the Ohio Third Frontier and the New Economy Initiative in Michigan.
BRITE plans to use the grant money to provide its 12-week business boot camp program to between 18 and 25 participants in Ohio and Michigan. Aspiring entrepreneurs can complete the virtual program from anywhere, and the goal is for at least 40% of them to come from marginalized or underserved communities. A portion of the funds will also help BRITE engage with a more diverse group of entrepreneurs and connect with additional partners in underserved communities.
Centrepolis will use its share of the grant to support five to eight companies with its Idea to Product accelerator program, including deep-level support for three to five pilot projects or demonstrations in underserved areas. The funding will also help develop content specific to distressed, rural and energy legacy communities and support work with economic development partners in both Michigan and Ohio.
The joint program will draw on the relative strengths of each organization, said Sara Daugherty, chief of staff at BRITE. Both nonprofit groups provide a full range of services to entrepreneurs. But BRITE is especially strong on the front end of initial business planning and fundraising, which includes helping people figure out if their idea has value and identifying the market for it, Daugherty said.
Centrepolis is especially good at helping people with physical products get them ready for investment and commercialization, including prototypes, she continued. Centrepolis also has experts in automotive manufacturing. The clean transportation sector is a focus for both greater Detroit and for Ohio’s “Voltage Valley” in the Youngstown-Warren area.
Alumni of each organization’s programs have included a variety of engineers. But the bulk of the clients lack doctoral degrees, said Centrepolis director Dan Radomski. And a good number of clients don’t even have a university degree, “but have great ideas for physical products [and] cleantech products,” he said.
Connecting with resources
One challenge BRITE has had is making sure people know about its services, Lyon said. Often that calls for working with neighborhood groups or various nonprofits that aim to increase opportunities for women, people of color and other groups, she said.
Additionally, many clients may have expertise in one discipline, “but they don’t have the rest,” Radomski said. His staff at Centrepolis has helped innovators figure out computer-assisted design (CAD) and other equipment to design a product and do other work to get it ready for prototyping.
“Eventually, if they’re going to full-scale production or even a product line, they’ll have to find other partners that are able to do that,” Radomski said. “Physical production takes so much more space.” Then staff at Centrepolis and BRITE can help innovators firm up plans and find funding for that endeavor.
An introduction through the Ohio Fuel Cell Coalition connected Roland Dixon to BRITE. Dixon is a manufacturing engineer who also happens to be Black and a veteran. He had never owned or run a technology business before acquiring rights to technology from a former employer and starting a remote generator company called Special Power Sources, in Alliance, Ohio.
“They’re like a bridge that can tie us together to help us understand not only how to understand how a business runs, but how to keep it in business when times get tough,” Dixon said. “And times do get tough in small businesses.”
He credits BRITE with helping him get some of the funding for his company, including a grant from JobsOhio.
“Not every idea that comes to us is a good idea, of course,” Radomski said. “There’s quite a lot of vetting.” First: has it been done before? Second, are there potential customers? And third, is that market viable — “meaning you can produce at the right price point,” he explained.
Some clients also need to learn or brush up on how to do presentations and other tasks. In that case, Centrepolis and BRITE help people connect with other resources.
One of Ohio’s Minority Business Assistance Centers is at BRITE’s location, and another is in Youngstown, for example. State certification programs there and at other centers help increase the number of qualified competitors who can bid on various projects.
Other resources offered through the centers “include technical and professional assistance, access to capital, surety bonding, and more,” said spokesperson Sarah Wickham at the Ohio Department of Development. “In the past two years there were 132 clients counseled, 94 hours of counseling hours, and $334,700 capital infusion for Trumbull county,” which includes Warren and Youngstown, she said.
Fairness and equity call for providing support for all entrepreneurs, particularly ones who are from underserved backgrounds and communities. Business reasons also provide strong incentives for supporting startups with diverse leadership.
Startups with diverse leadership teams “are proven to be able to raise more from and return more capital to investors than those formed by all-White teams,” Daugherty said. As support, she cited a 2020 analysis by the Kauffman Fellows Research Center.
That paper found that while businesses with White founders and executive teams raised venture capital more often, founders of color who successfully raise capital tend to get more in total from all rounds of funding. That’s particularly the case when projects get to their later stages. And when investors do get cash back, they tend to earn a higher return from businesses with diverse teams.
“Diversity also brings greater creativity and new problem-solving capabilities,” Daugherty said. A 2020 report by McKinsey & Company also found that the relationship between diversity in companies’ leadership teams and better financial performance has grown stronger over time.
BRITE and Centrepolis hope to kick off the joint program in July. But each group continues to offer its services to innovators and entrepreneurs before then. And prospective clients don’t need to have their ideas fully developed before approaching either group for help.
“Just have a conversation with us,” Lyon said. “Don’t think that you’re too early. You never know how we can help you until we have a conversation with you.”