How Black Entrepreneurs are Left Out of the VC Party and What Needs to Change
The Plight of Black Entrepreneurs
In the middle of the 2010s, startups led by Ivy League grads promised to revolutionize the consumer goods industry. Venture capitalists poured money into these companies, and their ads ran on subway and bus terminals in the world’s biggest cities. However, less than one percent of venture capital went toward minority businesses. As the founder of apparel brand, Baobab Clothing, I’ve been invited to multiple accelerator programs; unfortunately, they did not offer much-needed capital, facilitate key mentorship, or give access to selling opportunities. Without adequate financial resources, mentorship, and viable yet affordable locations to operate, Black entrepreneurs struggle to grow and scale.
The Need for a Sustainable Solution
Supporting Black-owned businesses is not just a one-time marketing campaign. It requires sustained attention to address systemic issues that suppress the ability of Black entrepreneurs to make significant strides. Big businesses and consumers need a sustainable mindset to grow Black businesses. For example, mature language shifts from positioning buying from Black businesses as a chore and charity to an enjoyable experience that solves a need and encourages customers to repeat. Words matter in marketing, and we should use direct language, such as the term shop, to encourage customers to shop Black-owned brands year-round.
Tools That Can Help
The 15% Pledge, where big businesses commit to dedicating 15% of store shelves to Black businesses, can help consumers discover new Black-owned brands and shop consciously. Other tools such as the Shopify Shop App or Black-Owned Everything platform provide customers with a wide selection of items from around the world created by Black entrepreneurs. Sephora even offers its own curated page showcasing skincare and cosmetics by Black business owners.
The Path Forward
Growing the pie involves lowering barriers that stifle growth for Black and Indigenous business owners. Corporations should provide diverse opportunities such as supplier diversity programs that will make a difference between breaking even and breaking through. If there is a genuine desire to stimulate economic growth and achieve the American dream, then individuals, investors, and corporations must wield their economic might to advance Black businesses by shopping, providing access to business networks, and investing without bias or discrimination. After all, the American dream is for everyone, not just a select few. So why is it taking so long to make it a reality for all?