The city of Denver reached a settlement to avoid a lawsuit alleging it was “abandoning minority- and women-owned businesses.”
DENVER — The city of Denver has reached a settlement with an investment fund after a project to support women- and minority-owned businesses collapsed.
The City of Denver has agreed to pay all outstanding bills to the Domestic Emerging Markets Investment (DEMI) Fund, ending a relationship built to benefit small businesses owned by women and people of color.
In March, the fund's director filed a lawsuit against the city of Denver, alleging that city leaders “brazenly abandoned minority- and women-owned businesses in an act of deliberate misconduct” by cutting off funding.
Related article: 'Something's wrong' | Denver Minority Entrepreneurs Fund collapses
City and fund leaders issued a joint statement Friday morning celebrating the two sides' joint efforts that ended in acrimony in early 2024.
Launched in 2022, this pioneering project used a portion of cannabis tax revenue to expand access to capital for Denver's diversely owned and operated small businesses.
In March 2024, Daniel Schutz, managing director and founder of DEMI Fund, said the city of Denver had not paid its bills, damaging the city's reputation in the financial industry. Schutz said the city initially told him the cannabis tax fund had run out of money, then blamed poor record-keeping in an attempt to stop future payments.
Schuetz has filed suit seeking $800,000 in unpaid bills. Schuetz told 9NEWS he wants an apology from the city and an audit of the program's funding.
In a statement released Friday, the DEMI Foundation and the City of Denver praised the two parties for their joint effort.
“Denver worked with DEMI Fund to explore a novel approach to enabling public investment in venture capital with the goal of creating a permanent investment fund for the benefit of minority-owned businesses in Denver,” the statement read in part.
“Building something new isn't easy,” the statement continued. “Denver remains committed to growing, expanding and building wealth in the Denver community and will continue to look for creative ways to partner with traditionally disadvantaged businesses.”
A city spokesman said the settlement did not require City Council approval.
