2nd Cousin 2x Removed ™️

Frustrated with Limited Opportunities

I remember listening to the podcast How I Built This with Guy Raz. If you haven’t heard it before, it’s about a guy interviewing world-famous entrepreneurs to learn how they built their companies. At the time, I loved this podcast and would listen to it to learn from their experiences. But over time, I started to get turned off by the pod because I realized many of the guests who spoke had opportunities that people who looked like me would rarely have. Many business owners seemed to get funding from their savings, family, and friends. I didn’t knock them, but I would get so frustrated that this is almost nonexistent in our community.

Financial Responsibilities to Family

A constant problem that plagues our young adults is that they often end up taking care of their parents when they aren’t in a position to afford it. For example, my wife and I happened to do just good enough that both sides of the family turned to us for money, and this wasn’t money for funding a business. This was, “Hey, my lights are about to get cut off if y’all don’t help.” Or “I can’t buy groceries. Can you spot me, and I’ll pay you back on the 1st?”. Oh, and my personal favorite, “Hey, I’m bout to get my car repossessed, and if I miss work again, I’m going to get fired.” And the messed up thing was our family and friends that were doing well didn’t have any extra money to help fund our dreams cause they were busy trying to support their own and build a better life for their kids. While I enjoyed the podcast, I eventually stopped listening because it reminded me of the systemic discrimination and racism that has helped create the racial wealth gap in the US.

Racial Disparities in Business Ownership

Did you know black business owners, according to Lending Tree (2023), own just 2.4% of small businesses in the US, while white business owners own 82.7%? When discussing building wealth in our communities, these numbers are simply unacceptable. Small businesses are the backbone of the US economy, and the fact that black people have such a small percentage of those businesses is troubling.

Barriers to Business Ownership

The simple solution to this problem is increasing business ownership within our communities, which is much easier said than done. While filing the paperwork to form a business is easy, having the funds to get it up and running is another. Did you know the median wealth for black households is around 24k? With those numbers, plenty of people in our community with the abilities, skills, and experience to start and manage profitable businesses aren’t in the financial position to make it a reality. If the median wealth is only 24k in our community, the chances of having the financial means to fund our businesses are very low.

Challenges with Business Loans

If we can’t get funding for our start-ups from our savings or community, what about business loans? Well, in 2021, over 46% of black adults were denied credit or given less than requested. Setting aside the overt discrimination faced by black people getting approved for business loans, many factors in the loan approval process express the systemic racism and discrimination baked into the system, giving our communities the short end of the stick.

Limited Venture Capital Opportunities

Companies also turn to venture capital, where private investors provide money and expertise in exchange for a piece of ownership. While this may sound like an excellent opportunity to fund our businesses, CNBC (2023) states that black entrepreneurs typically receive less than 2% of all VC dollars. And If people like Edward Blum, who is now targeting the Fearless Fund, had their way, we wouldn’t get that. It’s wild to think a group of people is trying to use the federal laws put in place to prevent racism and discrimination to keep the systemic racism and discrimination in place that the laws were meant to stop. It is truly a scary time for Civil Rights and our communities.

Seeking Solutions for Black Small Businesses

So, how do we fix this problem in our community with small businesses? How do we get the funding we need when many of the avenues available for business owners are typically unavailable to us? How can we build generational wealth through small businesses when our funding is limited?

The Importance of a Strong Community Financial Foundation

The solution to increasing small business ownership in our communities will take a group effort with many different strategies and tactics from many different people and organizations. There are many barriers for us as a people that are no fault of our own that we must overcome to succeed in America. We are getting attacked from all sides with no let-up in sight. I won’t sit here and tell you I have all the answers, but I know for anything to happen, we need money for funding from within our communities. If our financial foundation as a people is strong, we can provide the necessary funds to start businesses for and in our communities, provide our banks with the money to provide loans and have our own venture capital firms to invest. Because at the end of the day, who got us but us?

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