Minority entrepreneurs set up own Valley incubator

As a teenager, Curtiss Pope worked as a clerk at Food 4 Less in east San Jose, Calif., gathering up shopping carts and helping customers find grocery items. He got the job to help his single mother of nine pay the bills, but it also seeded the idea for a start-up he's launched while helping to buck a well-documented Silicon Valley trend.

Pope, an 29-year-old African-American, goes up against some tough stats as he seeks funding for his company, AisleFinder, which aims to help people find items in grocery stores.

According to a recent CB Insights report, which tracked founders of 165 companies that had received a first round of venture funding during the first half of 2010, just 1 percent were African-American, even though 11 percent of the U.S. population is black. That's compared with 87 percent of founders who were white (whites make up 77 percent of the U.S. population), and 12 percent of start-up founders who are Asian (Asians make up 4 percent of the population).

And the tech divide is particularly wide in the San Francisco Bay Area, according to a report recently released by the Minority Media and Telecommunications Council (PDF): while the region ranks first in the nation with 386,000 high-tech jobs, the region also has the biggest gap in minority high-tech employment.

While the Internet has broken down some barriers to entry in tech, historically there's been no base for minorities in Silicon Valley, which is why Wayne Sutton and Angela Benton--themselves African-American start-up entrepreneurs who hail from North Carolina--co-founded the New Media Entrepreneurship Accelerator in Mountain View, Calif. Last year, Benton held a NewMe conference, which this summer grew into a full-fledged incubator program in which Pope is currently participating.

"You can just have an idea or even a working product, but you have to know how to present to the valley standards," said Sutton, who is also founder of a reputation system called Vouch. "We're finding out that a lot of minority-led start-ups are not as prepared as other start-ups to be in position to seek funding or angel investment."

NewMe's slots are reserved exclusively for minorities, but the 2011 NewMe class members are all African-Americans in particular. While some, like Pope, are local, others come from around the country. Nonlocal entrepreneurs are housed in a modest three-bedroom Mountain View home. But everyone is exposed to guest mentors such as MC Hammer, known in the valley for his investment in the mobile payment start-up Square.

"Growing up [in east San Jose], I didn't have doctors and lawyers living next door--I had pimps and drug dealers," Pope said. "The thing that trips me out is I see a lot of ideas get funded, but I never see anyone that looks like me. You see all those young suburban white males. We have no one that we can seek out."

Pope did have one local idol he looked up to growing up in San Jose: Steve Wozniak, who founded Apple with Steve Jobs. "He cared about people as well as tech and money. He was the entrepreneur I wanted to be," said Pope, who himself spent free time as a teen learning HTML and eventually building Web sites for clients.

Last week, both the local and nonlocal NewMe teams presented their products to a room full of investors at Kapor Capital in San Francisco: among those represented were SV Angel, Bessemer Venture Partners, Google Ventures, Ignition Partners, Sequoia Capital, Morgenthaler, Blue Run Ventures, O'Reilly AlphaTech Ventures, Syncom Ventures, and more.

Mitch Kapor, tech pioneer and creator of Lotus 1-2-3, said at the pitch event Thursday that NewMe is "changing the face of entrepreneurship."

"It will help close gaps needed to access capital and take advantage of the world's greatest innovation ecosystem," he said.

Dressed in a black suit jacket and blue jeans, Pope looked like a polished salesman as he presented his product. His pitch: "We are like Google maps for your supermarket. We enhance your shopping list by providing aisle information."

During the event, Pope collected business cards from investors in the room. The next morning he researched the venture capitalists who were there and called to follow-up. He's been e-mailing and chatting with three investors and will meet more this week.

All that nurturing and networking can only do so much; Pope still needs to raise money, but he said he feels prepared now that he's nearing the end of his summer boot camp. The nine-week program officially ends on August 18.

It's too soon to tell if any of the founders will get funding, but Sutton is confident a few from the group will raise a round.

Pope is hopeful anyway: "Two [investors] told me I had the best product pitch they heard," Pope told CNET in an interview, a day after the event.