Derek Smith, a native of southern Los Angeles, recognized the economic challenges faced by his community. In 2015, after gaining experience in New York City, he returned to his roots to establish Plug In South LA, a startup incubator aimed at nurturing aspiring entrepreneurs and fostering economic growth in the area.
Key Takeaway
Plug In South LA, led by Derek Smith, is dedicated to empowering entrepreneurs from underrepresented communities, addressing funding disparities, and fostering economic development in traditionally underserved areas.
Fostering Diversity and Overcoming Funding Barriers
Smith’s initiative aims to address the funding disparities experienced by founders from underrepresented groups. Data from Crunchbase revealed a concerning trend, with funding for Black founders declining for the third consecutive year, reaching a historical low in 2023. Black founders received a mere 0.48% of the total venture capital allocated, amounting to $661 million out of $136 billion.
Empowering Entrepreneurs through Mentorship and Support
Participants in the Plug In program engage in a 12-week curriculum, dedicating approximately five hours per week to workshops and mentorship sessions. The program covers various aspects of startup development, including pitch deck refinement, storytelling, and financial planning. The culmination of the program involves a demo day, providing an opportunity for participants to showcase their ventures to potential investors.
Building a Network of Success
Smith envisions tapping into the untapped potential of South LA and believes that successful startups can contribute to job creation and talent development in overlooked communities. His approach emphasizes economic development and the cultivation of a network of entrepreneurs committed to giving back to their communities.
Success Stories and Future Prospects
Several successful ventures have emerged from the Plug In South LA program, including ChargerHelp, a company offering solutions for EV charging stations. The program has also supported the growth of SwayBrands, a platform connecting diverse creators with agencies and brands, and ThriveLink, which leverages AI to assist underserved patients in accessing essential social services.
Investing in the Future
While initially unable to invest directly in the program’s participants, Smith is transitioning towards an equity-based model, aiming to establish a fund that will invest in future cohorts and take a 5% equity stake in the supported companies, with potential for follow-on investments.
