To create an economy that works for everyone, we need to have conversations about the systemic barriers that stand in the way. Recently, the Kauffman Foundation convened experts for a South by Southwest (SXSW) panel to talk about the state of Black entrepreneurship, and how, with greater access to opportunity, support, funding, and knowledge, more Black entrepreneurs will be able to prosper.
Here are four highlights from the discussion, which was moderated by Amara Omeokwe from The Wall Street Journal:
- Philip Gaskin, Vice President of Entrepreneurship, Kauffman Foundation
“There have been barriers based on race that have kept Black people from opportunity to achieve economic stability, mobility, and prosperity for years. Most of these systems were developed long ago, but we’re dealing with them still today. If policies aren’t designed from the bottom up and inclusively, with the right listening and understanding, then we’re going to continue to make mistakes.”
For our economy to reach its full potential, we must address the underlying conditions that produce this racial gap. Eighty three percent of entrepreneurs do not access bank loans or venture capital at the time of startup. People of color and women have a tougher time getting businesses off the ground due to systemic challenges that favor big business and systemic barriers that limit access to capital and resources.
- Wayne A.I. Frederick, President, Howard University
It’s important that we “create an ecosystem that supports one another, which I think has often been a missing component when we go through these cycles, that we don’t then come together.”
Over 75% of all venture capital goes to five geographic regions across the United States. This concentration of VC funding is predominantly disbursed in five regional clusters including New York City, Silicon Valley, Los Angeles, San Francisco, and New England. Part of the work we are doing with the Capital Access Lab is to reach entrepreneurs in communities beyond these major geographical areas. Since its inception in 2019, the lab has built a diverse pipeline of more than 100 potential funds, 55% led by women and 41% led by people of color, spanning across 32 states.
- Sherrell Dorsey, Founder and CEO, The Plug – a media outlet covering the Black innovation economy
“I know that for The Plug, in particular, a lot of the doors that were open for us were at the hands of that kind of internal stealth revolution happening at companies where Black and Brown and Asian and Indigenous and female and trans people made introductions on our behalf or helped us to navigate opportunities on our behalf.”
We need to rebuild our entrepreneurial ecosystem so we can support the entrepreneurs around us. Strengthening our ecosystems will take a collaborative effort – we need to work together to design the right policies conducive to helping support entrepreneurs and local small businesses. America’s New Business Plan is a bipartisan policy plan to help us get there.
- David Hall, Managing Partner, Revolution’s Rise of the Rest Seed Fund
“The thing that I’m really excited about, and this really informs a lot of the work that I do on a daily basis at Rise of the Rest, is looking at how…talent was widely, evenly distributed, but opportunity has been, at least in technology and venture, so focused on Silicon Valley, so focused on New York City, so focused on Boston.”
In 2020, the Kauffman Foundation selected 17 organizations from Missouri, Iowa, Nebraska, and Kansas to receive funding through the Heartland Challenge, which focuses on underrepresented entrepreneurs in the region. Grantees are working to solve for specific challenges entrepreneurs in the region face, including creating more equitable ecosystems, and revitalizing rural communities. A 2021 RFP recently closed.
Gaskin also said that, “despite the challenges, there are still thousands of examples of Black entrepreneurs defying the odds, starting and growing a business, creating jobs, and creating generational wealth. Imagine what could happen if we systemically work to remove barriers to entrepreneurship.”
It’s imperative to focus our efforts from the bottom up to have an inclusive recovery after the pandemic has disproportionately impacted people of color. If done right, policies will eliminate barriers not just for Black entrepreneurs but for all who face systemic barriers to opportunity today, including women and rural entrepreneurs.
The doors will not be closed on Black entrepreneurs
While the share of new Black entrepreneurs has steadily increased, the pandemic has dealt Black business owners, specifically, a blow that only magnifies the inequities built into the American economy. Black business owners in Kansas City, like entrepreneurs across the country, need greater access to opportunity, support, funding, and knowledge.
