Building Diverse Startups in Underserved South LA with Plug In
Derek Smith, the founder of Plug In South LA, is on a mission to bring economic development and opportunities to his hometown. Growing up in southern Los Angeles, Smith witnessed firsthand the frustration that stems from a lack of economic growth. After spending the early part of his career in NYC, he returned to South LA in 2015 to start a startup incubator in his old neighborhood.
Smith’s goal for Plug In South LA is to support aspiring entrepreneurs and help them navigate the challenges of building a startup. He recognizes that founders from historically underrepresented groups face even greater obstacles when it comes to securing funding. In fact, funding for Black founders hit a historical low in 2023, accounting for just 0.48% of total venture money. Smith aims to provide guidance and resources to Black and brown entrepreneurs looking to build tech startups, with the hope that their success will bring higher-paying jobs to underserved communities.
Plug In South LA operates a 12-week program that requires participants to commit about five hours per week outside of their day jobs. The program includes weekly workshops, industry-specific groups, and advice from members of the tech community. Participants receive guidance on pitch deck critiques, storytelling, financial planning, and more. The program concludes with a demo day where participants showcase their startups to potential investors.
Smith believes that there is a wealth of untapped talent in South LA and other overlooked communities. By incubating these companies and helping them scale, he hopes to foster a network of entrepreneurs who will give back by creating jobs and supporting talent in underserved areas. Rather than relying on outside forces, Smith believes that entrepreneurs themselves are the key to driving economic development.
Vaughn Blake, a partner at Blue Bear Ventures, supports Smith’s vision and has been involved with Plug In South LA since its early days. Blake recognizes the need for mentorship and support in Los Angeles and has been glad to participate in the program.
Plug In South LA initially ran monthly and quarterly programs to support diverse founders in the early stages of building their startups. Over time, these programs evolved into the formal accelerator program that exists today. Currently, Smith is recruiting participants for the incubator’s fifth cohort, which will take place later this year.
One of the success stories to emerge from Plug In South LA is ChargerHelp, a platform that assists field technicians in troubleshooting and fixing broken EV charging stations. The founders of ChargerHelp went through Smith’s accelerator program in 2020 and credit the experience with helping them refine their pitch and secure a $17.5 million Series A funding. The company has since raised over $20 million and has seen substantial growth in its workforce, from a dozen employees to close to 45.
ChargerHelp CEO Kameale Terry praises the program’s network of people of color who face similar challenges. The network continues to grow and provide support long after participants complete the program. Terry describes it as an invaluable resource and a unique community to be a part of.
Other successful companies that have emerged from Plug In South LA include SwayBrands, a platform connecting diverse creators with agencies and brands, and ThriveLink, an AI-powered product that helps underserved patients find and apply for social services. Smith highlights that ThriveLink has launched pilots with major health insurers.
Until recently, Smith did not invest directly in the companies that came through the program due to limited funds. However, future cohorts will benefit from a capital solution offered by Plug In South LA. The firm is rolling out an adjacent fund that will invest in its cohorts, taking a 5% equity ownership in the companies with additional follow-on investments.
Plug In South LA is making significant strides in building diverse startups in an underserved community. By providing resources, mentorship, and a supportive network, the incubator is empowering entrepreneurs to overcome barriers and create successful businesses. Derek Smith’s vision for economic development and wealth creation in overlooked areas is being realized through the efforts of Plug In South LA’s participants.