URA poised to launch pilot programs to encourage minority entrepreneurship, business expansion

Pittsburgh’s Urban Redevelopment Authority is poised to create two new social impact pilot programs aimed at encouraging minority entrepreneurship and business expansion.

URA Ventures and the Minority and Women-owned Business Enterprise Developer Equity Fund programs will provide risk capital to minority and women-owned businesses.

The redevelopment authority is hoping to raise $5 million in capital to fund the programs, using cash from their own revenue streams, the federal American Rescue Plan Act and other public and private sources.

The URA board of directors will vote on program guidelines for both initiatives at their virtual meeting on Thursday.

“The city of Pittsburgh holds tremendous economic opportunity,” Mayor Ed Gainey said. “But we need to work together to ensure that this opportunity is equitable and that it empowers MWBE entrepreneurs that for too long have been left behind. If we are going to grow our city, then we need to grow and invest in our minority businesses.”

Pittsburgh has the lowest rate of Black-owned businesses among the 50 largest metropolitan areas in the country, the redevelopment authority said.

“Many MWBE businesses and founders have difficulty accessing risk capital and liquidity to expand businesses and sponsor real estate development projects,” said Thomas Link, the URA’s chief strategy officer. “The URA has a long, successful history of investing directly in small businesses and supporting MWBE businesses through debt and investment products such as the Micro-Enterprise Loan Fund, the Minority Business Recovery and Growth Loan Fund and other tools.”

URA Ventures is an early-stage, diversity-focused fund that will seek to invest in companies located in the city.

The program’s objective is “to change the fact of entrepreneurship by making strategic investments, and by accelerating access and availability of capital to historically disadvantaged small businesses, while creating quality jobs and spurring economic growth in the city of Pittsburgh.”

Three programs planned

The initiative will start three programs: Main Street Ventures, Pittsburgh Entrepreneur Fund 2.0 and Venture Co-Investment.

The URA plans to allocate at least $3 million for the program, with a goal of impacting 41 businesses and creating more than 80 jobs.

The $2 million MWBE Developer Equity Fund will provide direct equity investments in MWBE-sponsored real estate development ventures trough a shared risk-reward structure that aims to strengthen the development sponsor and offer return on investment for the URA.

The programs will be funded by a combination of federal Community Development Block Grant funds, redevelopment authority revenue sources and other local, state or federal sources.