Black Entrepreneurs and Issues Surrounding Black Entrepreneurship
In this article, we focus on the issues faced specifically by Black Entrepreneurs, and we present some of the possible solutions to such problems.
By BHAVANA DANDU
With the recent outrage against racism and police brutality with blacks, the discussion of equal treatment and opportunities for blacks has once again come under the radar. All over the electronic media, calls for supporting African American civil rights to amplify Black voices and support Black businesses have surged. Tags such as ‘BlackOut Tuesday’ and ‘We buy black’ have trended, as suggested by Google Trends, a website that analyzes top search queries in Google Search.
But how far have we come and how far are we yet to go with supporting Black Entrepreneurs and Black owned businesses? To answer that, let’s begin with having a look at the history of Black entrepreneurship.
“I built a conglomerate and emerged the richest black man in the world in 2008 but it didn’t happen overnight. It took me 30 years to get to where I am today. Youths of today aspire to be like me but they want to achieve it overnight. It’s not going to work. To build a successful business, you must start small and dream big. In the journey of entrepreneurship, tenacity of purpose is supreme.” – Aliko Dangote
A Little Bit of History
African Americans have a prolonged and rich history of entrepreneurship. They have established several thousand successful businesses within two decades of the abolition of slavery, which thrived only in entirely African American communities.
But with time, the escalation of racial tensions and Jim Crow laws put these businesses in jeopardy; they became susceptible to destruction. With few resources left for Black business owners to rebuild their businesses, African American business ownership began to gradually dwindle beginning in the early 1940s.
Black entrepreneurship remained inert for a lot of the coming decades before it revived again in the early 1980s. While the growth hasn’t been exponential, the ownership continued to be on an incremental path despite having to face simultaneous ongoing challenges, confronting structural and institutional racism.
With the new century, African American business ownership remained on the rise and continually increased, even though the growth has not been very substantial. In 2014, African Americans owned 2% of the U.S. based companies. In 2017, this figure crept to 3.5%.
Despite this increase, Black-owned businesses continue to fall behind that of whites and other minorities in terms of market share. In 2017, white-owned businesses accounted for 81% of all U.S. companies, while Asian- and Hispanic-owned firms comprised 9.7% and 5.8% of the market share, respectively.
Even today, Black entrepreneurs continue to face injustice and unequal representation. When applying for loans, it is found that more than half of the companies owned by blacks were turned down, the rate of rejection being twice as high as for white business owners, as cited by the data recently made available from the US Federal Reserve.
This goes on to say not much has changed. The report found that while the most likely to apply for bank financing were black-owned firms, less than 47% of these applications were fully funded. And even if they got approved, their rate of failure to receive full financing is the highest among all categories by more than 10%.
Coming to the world of venture capitalists, who spent $130 billion in the United States last year and helped support the world’s four most valuable companies and countless other successful start-ups, there is effectively no legal support that ensures people of color have an equal opportunity to share in its wealth creation. Only 1 percent of venture capital money goes to companies owned by black entrepreneurs, said a Silicon Valley Bank study.
Another fact adding to the problem is that there is extremely low representation of black people in the top ranks of the venture capital industry. A 2018 survey of the 102 largest venture capital firms conducted by the Information found that of the 713 members of senior leadership, there were seven black men and zero black women.
How can we offer them more support?
Everyone finds themselves asking this question, each time racism or other systemic injustices against blacks come to light. We need to look out for more long-term and high-impact solutions rather than whim-based donations or temporary support.
Here’s a few ways we can start to help support Black entrepreneurship:
Use your buying power: If you’re just a reader who wants to take part in bringing about a change, think about finding and supporting black-owned businesses with your consumer dollars.
That is the most important thing that any reader can do. If you’re in a community where there aren’t many minority-owned businesses, or you’re unsure where they are, there are black directories and organizations that can link them and lead to black businesses.
Write letters to your representatives: You can also play your part by using your voices and writing to your representatives. That doesn’t just mean to Federal congressional representatives. There are lots of regulations and laws at the state and local level that represent real barriers for minority businesses.
At the local level: Business owners and businesses of color have more difficulty accessing new markets. And all governments, whether you’re local or state, have contracting opportunities. Oftentimes those contract opportunities go to very, very large businesses.
So, you could write a petition to your local or state government to break up these big bundle contracting programs so that smaller and black-owned businesses can have access. This is a very easy step to take and an important one at that to bring a change.
At the national level: It’s quite useful in general to let your Congress representatives know that you care about how the Small Business Administration (SBA) decides on which businesses get capital and becomes more so important when it comes to future rounds of stimulus funding.
If we prioritize businesses with no more than 10 employees, we can bring to light businesses owned by African Americans since their businesses overwhelmingly — more than 90 percent — have 10 or fewer employees. Hence, the SBA needs to eliminate regulations that allow first-come, first-serve funding [that goes primarily to bigger companies].
More Points to Consider
Look for diversity in your own business operations: One should not preach without practising. Entrepreneurs by nature are surely leaders. But, they are also business owners. And if we really intend to help bring a change, one should also work for inclusivity inside one’s own business operations.
Look at your employees. Are they diverse? Look at your supplier list. Is it diverse? One cannot afford to be outraged at the injustice happening outside without taking a peek into one’s own operations and ensuring diversity and inclusivity are prevalent.
Banks: Banks can better support Black businesses by investing in institutions that promote Black business ownership and African American entrepreneurship. This can largely be done by funding mission-driven programs that provide startup capital and technical resources.
Banks currently invest in supportive programs, such as community development financial institutions, which lend to Black businesses and provide Black entrepreneurs with technical assistance. However, large banks can do more by incentivizing these institutions to hire more diverse leadership.
Point of view: “Cease viewing business in black and white and simply let an entrepreneur be an entrepreneur.” Reading that line by itself makes one realize that inequality arises when one differentiates a person, be it based on race, gender, color, etc. If we want to make the business world more inclusive, we need to stop seeing Black founders as a cause worth supporting and simply start seeing them as the innovators and problem-solvers that they already are. We need to support their ideas, innovations and businesses for what they stand for, rather than because they belong to a certain race. When one doesn’t differentiate and discriminate , racism is bound to take its setback.
To help you start, here are some Black owned businesses in and around Minneapolis, Minnesota ranging from restaurants, salons to shopping that could use your support right now.
Some Young and Successful Black Entrepreneurs
Angela Benton, Founder & CEO of Streamlytics
Angela Benton is the Founder and Chief Executive Officer of Streamlytics, which uses first-party media consumption data to bring transparency to what people are streaming on today’s most popular streaming services while helping consumers own their data in the process. Prior to her role at Streamlytics she founded the first accelerator for minorities globally in 2011, NewME which was acquired in December 2018.
To date, Ms. Benton has received numerous accolades, some of which include Goldman Sachs’ 100 Most Intriguing Entrepreneurs, Fast Company’s Most Influential Women In Technology, Business Insiders’ 25 Most Influential African-Americans in Technology, Marie Claire’s 50 Women Who Rule, and many more. She’s been featured in numerous national and international media outlets including CNN, MSNBC, Bloomberg, Inc, Forbes, Good Morning America, and the Wall Street Journal where she was a featured essayist alongside Mark Zuckerberg for the paper’s 125th Anniversary edition on The Future of Entrepreneurship.
At the helm of Streamlytics, Angela continues to uncover untapped spaces in technology and innovation.
Adelanwa Adesanya, President & Co-Founder of Moving Analytics
Adelanwa Adesanya is the co-founder of Moving Analytics Inc, a digital health company dedicated to conquering heart disease through digital cardiac recovery programs. Moving Analytics’ programs combine evidence-based medicine, behavioral science, remote monitoring, lifestyle coaching and a mobile app to help people to recover after a cardiac event. Moving Analytics’ programs were developed in collaboration with Stanford Medicine and are based on over 30 years of research.
Previously, he worked with researchers at USC to commercialize their research into startup companies and launched Lighthouse Ventures, a nonprofit whose mission is to foster a culture of angel investing amongst people of color. He was recently recognized as a top 30 under 30 in healthcare by Forbes magazine.
Jasmine Crowe, Founder & CEO of Goodr
Jasmine Crowe believes everyone should eat. She founded Goodr in 2017 as a sustainable food waste management company that leverages technology to solve hunger and food waste. Using their logistics, analytics, and security, businesses can donate extra food to nonprofit organizations and earn tax deductions in the process.
The platform, enabled by the block-chain, benefits hungry people, the donor businesses, and the environment. Before she founded a profit-for-good corporation that helps other companies strive for zero waste – which has so far diverted more than 2 million pounds of surplus food from landfills (about 1.8 million meals) – Jasmine Crowe used to feed people experiencing homelessness directly from the kitchen of her small one-bedroom apartment in Atlanta, something she called Sunday Soul.
She found that nearly 75 billion pounds of perfectly good food is wasted every year in America – which amounts to about $218 billion a year spent in the U.S. on food that people never eat. “What I look at is hunger being an issue of logistics, and so Goodr is solving what I call the surplus food supply chain problem.” she says.
Amari Ruff, Founder & CEO of Sudu
Previously the CEO of R2 Trucking Solutions, Amari now manages Sudu, a technology-based logistics company. They use data and analytics to help companies ship their freight efficiently using a network of carriers.
Never one to think small, Amari landed Wal-Mart as his first enterprise customer. He subsequently cut deals with P&G, Delta Airlines, Georgia Pacific and UPS.
“After exiting my previous company, where I owned over 200 trucks, I had a vision to start a traditional asset-based trucking company. The goal was to build a company that was heavily focused on company culture and create an environment that owner operator truckers would want to be a part of ” says Ruff. Sudu now has over 300,000 trucking companies within its network and is generating millions in revenue.
Asmau Ahmed, Founder of Plum Perfect
Asmau started as a chemical engineer but soon transformed her passion for innovation. In 2014,The Columbia grad founded Plum Perfect, an app that scans a users’ selfie to find the perfect makeup for their skin tone – including the various tones of women of color.
On the app, users upload selfies and receive makeup shade recommendations that complement their skin color. She tried to work on proprietary technology that analyzes skin, lip, hair and eye color, knowing that minute details like undertones are often undetectable to the human eye.
Launched later on Plum Perfect, BeauTV generates personalized shade suggestions for makeup used in YouTube beauty tutorials. Plum Perfect’s technology isn’t solely consumer-facing—Ahmed licenses it out to IMAN Cosmetics, and a project with Macy’s Inc. is in the works.
Listed as one of five “Top Women in Digital” , Asmau Ahmed focuses on extracting business value from innovation.