On Thursday, September 30, 2021, TechTown Detroit announced at Toast of the Town the two inaugural recipients of the Startup Fund, launched in April of 2021 to provide grants to Black tech founders to help their companies grow. Bar Drop LLC, cofounded by Wardell Crutchfield III and Jaifus Ingram, and Raxplay, cofounded by Isaac Lymon, Norvell Robinson and Carlos Shields-Davis, will each receive $10,000 to assist their companies in achieving specific milestones that will unlock future revenue and investments.
The Startup Fund was created to address a compound barrier. Just 1% of all venture capital is invested in Black-owned companies, and the average White family’s net worth is 10 times that of the average Black family’s. This leaves Black tech founders at the earliest stages of their business with fewer opportunities to access the capital necessary to get started. It is customary in the idea stage of business development to receive financial support from friends and family, but this underappreciated round disproportionately locks Black founders out of the opportunity to test their idea.
“At TechTown, we understand that the opportunity to found a company is something that everyone, no matter their network, should have a chance to try,” said Ned Staebler, TechTown President and CEO. “TechTown’s not the kind of place where we sit back and hope someone else solves a problem, so we asked our community to help us raise money, and we are thrilled to present two incredibly talented Black-owned tech companies with $10,000 each.”
One hundred and thirty-eight donors contributed to this initial round of the Startup Fund via donations of all sizes, ranging from $5 to $5,000. The companies awarded funds were announced live at Toast of the Town, TechTown’s annual fundraiser celebrating the spirit of entrepreneurship.
“We’re helping community lenders and tech founders forge new pathways of startup funding because the traditional models don’t address the needs of all. To get things done for the founders of this community, we are doing economic development differently,” Staebler added.
Bar Drop LLC:
Founded by Crutchfield III in 2020, Bar Drop LLC was created to bring the bar experience to its customers with cocktail delivery service. While they currently only deliver food and nonalcoholic beverages, Bar Drop is on the verge of obtaining a liquor license and expects to be delivering alcohol by 2022.
A participant of TechTown’s 2021 Start Studio spring cohort, Crutchfield III learned that third-party food delivery was cost-prohibitive for independent, Black-owned restaurants and bars in Detroit. Bar Drop’s answer was to provide delivery services to businesses free of charge while avoiding fees for delivery customers.
To prepare for scale, Bar Drop needs to further refine their target customer of women aged 45 – 65 with a testing-focused marketing campaign. The $10,000 Startup Fund grant will allow them to launch a social media marketing campaign to better understand their customers and ultimately reach the goal of 100,000 deliveries and $350,000 in revenue in the next year.
“The Startup Fund will help Bar Drop be able to understand how our customers better, and help us obtain milestones to make our dream a reality,” said Crutchfield III. “Words don’t even do it justice for how impactful this is grant from TechTown.”
Raxplay is an immersive music company enabling real-time intuitive concerts in the metaverse. Whether web-based experiences or all-out virtual reality concerts, Raxplay provides a gateway to a higher level of creativity.
In 2019, Lymon enrolled in Launch Detroit, TechTown’s idea-stage student accelerator, to find a solution through virtual reality for musicians struggling to reach audiences. At Launch Detroit, Lymon met Raxplay cofounder and lead designer, Carlos Shields-Davis. During Launch Detroit two enrolled in the Bose x Capitol Records Code Jam hosted by TechTown and met their third founder and CTO Norvell Robinson who helped them win third place in the competition. Raxplay then enrolled in the TechTown-hosted gBeta Music Tech Accelerator in 2019, allowing them to them make critical connections in the music industry.
The funding journey for Raxplay, however, was anything but smooth; they struggled to get investors to write their first check. In November of 2020, Lymon relocated to Los Angeles to make music-industry connections and meet investors while Shields-Davis went to San Francisco to forge relationships in the venture investing community. Despite moving to the West Coast to secure funding that didn’t exist in Michigan, Raxplay is headquartered in Detroit and plans to remain in Detroit with a Detroit-based roster of artists.
Raxplay will use the money received from their Startup Fund grant on community engagement and marketing. Their goal is to onboard 1,000 new artists in three months to the platform while building an audience community for virtual concerts in preparation for a $750,000 pre-seed funding round. This will allow them to begin generating revenue more quickly and demonstrate scalability to potential investors before moving to compete with larger platforms.
“The folks at Techtown have always been supportive of Raxplay, which we’re super thankful for,” said Lymon. “We are excited to grow our community and prepare artists for the virtual world.”
Learn more about Raxplay at https://www.raxplay.com.
TechTown will continue raising money for The Startup Fund to award additional Black tech founders with grants that keep their companies and dreams moving forward.
Donations to the Startup Fund can be made at www.techtowndetroit.org/techfund.