Creating a successful business is rarely easy, but it’s much harder in the event you are black.
Research shows that Black startup founders face significant racial obstacles, including limited access to entrepreneurship training programs and the challenges of accessing mainly white networking and mentoring opportunities.
His it’s harder for black founders to lift moneytoo. The latest TechCrunch data shows that in 2023, Black business founders received lower than half of 1% of total startup capital. To date in 2024 there is barely constant stagnation.
Tope Awotona, founding father of Calendlya free online meeting scheduling platform, has experienced this difficulty.
“Everyone Said No” he told NPR in 2020. “Meanwhile, I watched other people who fit a different profile get showered with money. These VCs were ignorant and short-sighted… the only thing I could put it down to was that I was black.”
However, there are high-profile success stories of black entrepreneurship. include Black Entertainment Television founder Robert Johnson, Daymond Johninvestor in the reality show Shark Tank and 1000’s of black startup founders currently runs modern corporations across the United States.
To higher understand the intersection of race and entrepreneurship, we studied experiences successful black entrepreneurs in the U.S., as shared on NPR’s “How I Build This” podcast. The challenges facing black entrepreneurs are well documented, so we focused our research on a unique query: How does entrepreneurial identity intersect with racial identity?
Two key insights emerged.
A step towards equality
We found that while race could be a liability in some respects, some successful entrepreneurs have found ways to leverage race of their startups.
For example, most Black entrepreneurs understand their communities significantly better than outsiders typically do. This understanding allows them to raised and faster see opportunities of their communities.
This is it competitive advantage Jan he took advantage of this in 1992 when he founded the clothing company FUBU, which stands for “For Us, By Us”. How he said on How I Built It in 2019“I wanted to create a brand that loved and respected people who love and respect hip-hop.”
John knew the market he desired to serve higher than most because he was a part of it. He saw a chance when outsiders couldn’t do it.
Other business founders share John’s sentiments.
Tristan Walker, founder Walker and companypersonal care company focused on black men, he said his goal is “to create a company that produces health and beauty products for people who look like me.”
And the McBride sisters, to call them Black Girl Magic’s flagship wineshe told “How I Build This”: “If there is a moment for black women to celebrate… whatever it may be… we just wanted to be there to celebrate with her with equally beautiful, high-quality wines.”
Shannon Finney/Getty Images
In this sense, some Black entrepreneurs are in a singular position where they will create products that others would never consider. Our research also shows that they are higher prepared to sell to a community that desires to support them.
Recent study from Pew Research Center found that a majority of black adults consider that shopping at black businesses is a step toward racial equality.
I mean as a mission
Our research also found that many Black entrepreneurs care about creating an organization that matters. This is very true when it will probably help lift others in the race. For them, it’s about giving back to – and galvanizing – their communities.
In other words, Black startup founders often create corporations that reflect their racial identity. This is an element of their purpose of being an entrepreneur.
“I have always believed that my company’s mission must serve my community.” Cathy Hughes, founding father of Radio Onea station dedicated to Black culture, said “How I Built It” in 2017. “Being the first African American woman (executive) in a publicly traded corporation… My only goal in business was to be a voice and an assistant to my community,” she said.
Many others in our study shared this sentiment, viewing role models, racial pride, and empowering future generations as a conscious a part of their mission as Black business owners.
Role models matter
Communities profit from homegrown entrepreneurs. These are individuals who reveal the power of entrepreneurship and show that an entrepreneurial profession is feasible.
However, many minority communities lack such success stories. Just 3% of US businesses were black-owned in response to the US Census Bureau in 2021.
That’s one in all the reasons we desired to document Black success stories in the first place. We consider they’ve transformative potential. Each recent success shows others in these communities that it is feasible and that entrepreneurship can provide a path to a prosperous future.