Startups in the Hampton Roads region can take advantage of new sources of investment supported by federal grant funding and statewide efforts to grow and attract new and expanding businesses.
In early May, Governor Glenn Youngkin announced the launch of Virginia Invest, which aims to attract $100 million to 100 Virginia startups over the next five years, leveraging a partnership with seven venture capital fund managers.
Hampton-based BFM Fund, co-run by Himalaya Rao Potrapali and Rachel Wilson, is one of the partners selected by the state. The seed-stage investment fund originally launched in Portland, Oregon, in 2020. The duo relocated to Hampton Roads last year, eager to contribute to growing the region’s entrepreneurial ecosystem, Rao Potrapali said.
“It’s exciting to see so much innovation here in the Hamptons,” she said.
BFM stands for “Black Founders Matter” and the fund focuses on innovative Black entrepreneurs in technology and product-based businesses, she said.
“Entrepreneurship can be used as a pathway to economic development, especially for people from different socio-economic backgrounds,” she said.
Rao Potrapali said he could not disclose the total amount BFM received from Virginia Invest, but that the checks to the seven selected fund managers ranged from $3 million to $10 million. BFM expects to close about 40 deals over the life of the fund, with initial checks of between $200,000 and $250,000.
The Virginia Innovation Partnership Corp. is leading Virginia Invest, which will commit $40 million to the seven funds using grants previously awarded from the U.S. Treasury Department’s State Small Business Credit Initiative, said Joseph Benevento, president and CEO of VIPC. The seven investment fund managers have also committed to raising their own capital, bringing the total to $100 million.
The State Innovation Partnership has been operating in Hampton Roads for decades. Benevento said this new initiative will help underrepresented entrepreneurs and founders engage with capital providers. Most of the capital will come from outside the state, which will increase available funding, Benevento said.
“We believe that for every dollar VIPC invests, an additional $10 flows into Virginia startups from the private investor market,” Benevento said.
The fund manager’s partners are also focused on building connections within the local entrepreneurial ecosystem, including historically Black colleges and universities, veteran founder communities and startup accelerators. Benevento said state leaders estimate that will impact more than 1,000 entrepreneurs across Virginia.
“I think one of the great things about Virginia Invest is that it attracts both investment capital and human capital and talent to Virginia,” Benevento said.
BFM has been busy with its Emerge program, which offers a pitch competition for historically black colleges and universities and a pre-accelerator program for aspiring entrepreneurs at the idea stage, Rao Potrapali said.
“This has really helped promote local innovation hubs as we look for people with side hustles,” she said. “We’re hopeful that through this fund we can help them scale.”
To date, the BFM Fund has received around 250 applications. Interested entrepreneurs can apply for financial support at bfm.fund.
Sandra J. Pennecke, 757-652-5836, sandra.pennecke@pilotonline.com
