In an effort to diversify the economy, a group of community partners on Thursday said they plan to launch an investment fund next year that will focus on growing the number of minority-owned businesses in West Michigan.
Bank of America and the Consumers Energy Foundation have donated $400,000 to support the design and development of the New Community Transformation Fund. Officials say they will attempt to raise between $15 million and $25 million before the fund is activated next year.
The Right Place, a Grand Rapids-based economic development group, is partnering with the fund and will provide support to businesses that receive funding.
Birgit Klohs, the group’s president and CEO, said West Michigan’s economy is strong, but the economic growth playing out across the region has not been shared by all residents.
The New Community Transformation Fund is designed to help change that.
“By investing in companies that will create long-term economic prosperity in communities of color, this fund will increase upward mobility and ultimately build a more diverse and globally competitive economy,” she said.
Roughly 6 percent of the businesses in the Grand Rapids-Wyoming Metropolitan Statistical Area are minority-owned, according to statistics provided by The Right Place.
Klohs is among a three-member consulting team who will lead the design and development of the fund, which will focus on early to mid-stage businesses in advanced manufacturing, food processing and agribusiness, life sciences and medical devices, and information technology.
Businesses that receive dollars from the fund must either be based in West Michigan or located elsewhere but agree to move here. Officials say they will search on a national-level for such firms.
The other two members of the fund’s consulting team are: Skot Welch, principal of Grand Rapids-based Global Bridgebuilders, a firm focused on diversity and inclusion; and Kwame Anku, who lives in Sacramento, California, and serves as CEO and chairmen of the Black Star Fund.