Many people view the United States as a nation of opportunity. The country receives a lot of domestic and international travelers due to the favorable market conditions for businesses. Simply said, owning a business is the fastest route to becoming a billionaire in the US. Nevertheless, according to a survey by the Alliance for Entrepreneurial Equity, just 2% of all national corporate leaders are Black.
The underrepresentation of Black individuals in the business sector deepens the country’s racial wealth inequality. According to a 2019 Federal Reserve report, just 16% of the US population is owned by Black people, who control only 3% of the overall wealth in the country. Meanwhile, white households account for 87% of the population and 68% of net income.
The issue is not black entrepreneurship because several Black-owned companies provide various services. Instead, the problem is systematic racism, which prevents the funding and assistance necessary to grow Black-owned enterprises. According to analysts, Black Americans face a significant gap due to this ongoing problem.
“The issue is not starting the business, but being able to keep the businesses afloat, being able to help the businesses grow and scale over time,” said Brandon Andrews, an entrepreneur.
Black entrepreneurs held only 1.2% of total venture money in the first half of the fiscal year. According to Gayle Jennings O’Byrne, the lack of financial assistance is due to “all the -isms and prejudices that have grown up over the 400 years that we’ve been a part of this country.” O’Byrne noted that racism is not overt; rather, it is implicit.
“It looks like, ‘Hey, great job. That’s an awesome idea. Keep going. Come back to me, you know, a year from now. I’d love to see how you’re doing. Hey, stay in touch,'” she said.
How to support Black entrepreneurs
According to experts, the problem lies with the shortage of capital for Black entrepreneurs to assist them in launching a corporation. Another area for improvement is the absence of ongoing support for the companies.
“How do we empower those micro businesses? How do we ensure that they have access to capital? How do we ensure they have access to business education?” Andrews posed a question.
“We know that Black business owners and Black entrepreneurs tend to hire from their community, hence spreading the economic benefit,” said Kenneth Ebie, a director and officer of Black Entrepreneurs NYC.
Alfa Demmellash, the CEO of Rising Tide Capital, said, “We don’t just need a handful of successful millionaire-billionaire entrepreneurs. Communities of color are enabling communities. We saw this during the pandemic.”
“It’s like if you are sitting at home and you need that food to be brought to you, who’s cooking the food? Who’s driving that truck? Who’s bringing it to your home? Who’s cleaning your home? Who’s taking care of sanitation? It’s literally our livelihoods.”
“They’re the essential workers, and they’re essential entrepreneurs. They create culture. They create livelihoods. [But they] are invisible and are never invested in because that’s not seen as having great [investor] return.”
Other money-earning techniques are open to US residents, such as investing in a start-up firm. The accredited investor regulation, on the other hand, is favorable to Black Americans.
“Most people in our communities are legally barred from doing it in the United States because of that accredited investor definition,” an entrepreneur said.
The Securities and Exchange Commission enforces a law that states that to participate in a start-up, a person must have a net worth of at least $1 million, an annual income of $200,000 for two years before the investment, and proof that the payment will continue.
“So there’s, again, systemic oppression that’s there that keeps our communities from having access to even spend our money on our businesses in the way that we might do otherwise,” added Andrews.
The importance of the Black community in policies
According to a recent report, Black people grew less likely to vote during the midterm elections—the poll polled respondents of various ages, genders, races, and economic levels. Black male voters account for a sizable proportion of Democratic votes. Furthermore, Black women make up a significant portion of the party’s Black voters. As a result, persuading them to vote will lead to improved conditions for the democratic party.
Even though data indicate that a sizeable chunk of Black voters support the Democrats over the Republicans, people claim that this trend goes beyond numbers. Instead, it will come down to how politicians treat and appreciate the nation’s diversity and their views on abortion rights, according to voters like Al Heartley and Donnell Brunson.
“At the end of the day, it comes down to the choice [of] abortion rights …as well as voting rights. Black men have a voice and a perspective. But, you have to acknowledge where I am as a Black person first. To me, that’s what Warnock and Abrams really do,” said Heartley.
“It’s clear to me that they don’t have minorities or people of color in their inner circle advising them. So they’re assuming what we want. And we want the same things other voters want: jobs, economics, education,” Brunson explained.
“What’s unique about Black male voters is that they were Democratic voters; they were supporting Barack Obama at 90%+ margins,” said Terrence Woodbury, CEO of the polling firm HIT Strategies.
“Now that we’ve seen that decline to 79% or 80%, it is enough to make the marginal difference in states like Georgia, Wisconsin and North Carolina, where they have diverse candidates at the top of the ticket,” the CEO added.