Black entrepreneurs are sometimes denied access to capital, but here's how some are removing barriers

It's never easy to construct a successful business, but it surely is true much harder in the event you're black.

Research shows that Black startup founders face significant, race-specific hurdles, including limited access to entrepreneurship training programs and challenges accessing predominantly white networking and mentoring opportunities.

It is It is becoming harder for black founders to lift moneyto. Current TechCrunch data shows that Black business founders received lower than half of 1% of total startup capital in 2023. And until today in 2024 There is just continued stagnation.

Tope Awotona, founding father of Calendlya free online scheduling platform, experienced this problem.

“Everyone said no” he told NPR in 2020. “Meanwhile, I watched other people who fit a different profile being showered with money. These VCs were ignorant and short-sighted… the only thing I could attribute it to was that I was Black.”

Still, there are high-profile black entrepreneurship success stories. This includes Robert Johnson, founding father of Black Entertainment Television, Daymond Johnan investor in the fact TV series Shark Tank, and the Thousands of black startup founders currently operates progressive businesses throughout the United States.

To higher understand the intersection of race and entrepreneurship, we examined the experiences of successful black entrepreneurs within the US, as shared on NPR's How I Built This podcast. The Challenges Black Entrepreneurs Face are well documented, so we focused our research on a distinct query: How does an individual's identity as an entrepreneur intersect with their racial identity?

Two vital findings emerged.

A step towards equality

We found that while race is usually a liability in some ways, some successful entrepreneurs have found ways to capitalize on race of their startups.

For example, most Black entrepreneurs understand their communities a lot better than outsiders typically do. This understanding allows them to higher and more quickly discover opportunities of their respective communities.

That's that Competitive Advantage John he used it in 1992 when he founded the clothing company FUBU, which stands for “For Us, By Us”. As he said on “How I Built This” in 2019.“I wanted to create a brand that loves and respects the people who love and respect hip-hop.”

John knew the market he desired to serve higher than most because he was a component of it. He saw the chance when outsiders couldn't.

Other business founders share John's opinion.

Tristan Walker, founding father of Walker & Companya private care products company focused on black men, said its purpose was “to start a health and beauty products company for people who look like me.”

And the McBride sisters on the naming ceremony Flagship wine Black Girl MagicShe told How I Built This: “When there's a moment for black women to have a good time…whatever…we just desired to be there to have a good time together with her, with equally beautiful, high-quality wines. “ .”

With that in mind, some Black entrepreneurs find themselves in a novel position to create products that others would never have considered. And our research shows they’re higher in a position to sell to a community that desires to support them.

A current one Study from Pew Research Center found that the vast majority of Black adults imagine purchasing from Black businesses is a step toward racial equality.

Meaning as mission

Our study also found that many Black entrepreneurs care about starting a business with meaning. This is very true when it may help advance others of their race. It is significant for them to provide back to their communities and encourage them.

In other words, Black startup founders often create firms that reflect their racial identity. It's a part of her goal to grow to be an entrepreneur.

“I always felt that my company’s mission had to be to serve my community.” Cathy Hughes, founding father of Radio Onea station that focuses on black culture, told “How I Built This” in 2017.. “Because I was the first African American woman (in charge) of a publicly traded company, my whole purpose in doing business was to be a voice and an assistant to my community,” she said.

Many other individuals in our study echoed this sentiment, identifying role modeling, racial pride, and empowering future generations as an intentional a part of their mission as Black entrepreneurs.

Role models are vital

Communities profit from local entrepreneurs. These are individuals who display the ability of entrepreneurship and show that a profession as an entrepreneur is feasible.

Yet many minority communities lack such success stories. Only 3% of U.S. businesses were Black-owned in 2021, in accordance with the US Census Bureau.

That's considered one of the explanations we desired to document black success stories in the primary place. We imagine they’ve the potential to create change. Each recent success shows others in these communities that it is feasible and that entrepreneurship can pave the option to a more prosperous future.