As an entrepreneur, I see firsthand how difficult it is to acquire funding for our small black businesses. While the growth rate of black female entrepreneurs has steadily increased over the last 2 years, especially through the pandemic, it’s also important to note how many businesses aren’t sustainable due to the lack of capital.
While the need for black businesses is paramount, there is an even greater need in funding for start-ups and existing businesses, specifically for black women. Think about it. Black women make up 7% of America’s population, 35% of black owned businesses are women and 17% of black women are in the process of starting or running new businesses. With this being the reality of entrepreneurship for the black community, how is it that black women only receive 0.5% of funding for their businesses? I’ll tell you how: racial discrimination, sexism and the fear that black women can thrive in a society where businesses are mostly owned and operated by our white counterparts. If the black community spends approximately $1.5 trillion a year, why is that money not funneled back into our businesses?
It would be naive to believe that there haven’t been any private policies and practices put in place to hinder black women from applying for loans and grants and an opportunity to receive these funds through equitable accessibility. There is a way to reverse the inequalities within the economy by way of partnerships with brands whose mission is to fund black women owned businesses. Leveraging black women-leg organizations, facilitating listening sessions and creating grant opportunities for black women business owners are just a few ways to invest in them and their passion, talents and offerings to consumers.
I want to be clear that while there are platforms available for crowdfunding and applicable grant opportunities for black women in entrepreneurship, there is an equal amount of misinformation about the latter. FundBlackFounders and IFundWomen are just two resources available with a strong reputation for participating in the end-to-end process of pre-seed/seed funding. Their outline is pretty clear and easily accessible to share, follow and donate to. But we have to address the disparity in grants available for black women, as there is an allocated amount of funding even available and we are all trying to get a piece of the pie. And when the capital offered is dried up, crowdfunding, the depletion of savings and donations from family and friends is truly what’s left. This simply isn’t enough. For all of us.
So what can we do?
Let me first tell you what we can no longer do. Exhaust our personal checking and savings accounts that are meant to sustain our livelihoods absent of our businesses. Compromise on whether or not to live or survive based on financial needs and lack of access to funds for expansion. Continue to apply for funding when the reality is racial and gender discrimination discrourage seeking additional funding and credit opportunities. It’s no secret that our passion and purpose runs deep. When we make micro-investments to start or sustain our brand, it usually comes from our own personal funds, perhaps refinancing mortgages, or taking loans from our 401(k). These are all things that impact our long-term wealth.
What we can do is be strategic in our thinking as it relates to who is supplying capital to our businesses. When we seek to acquire funding, we have to start caring about why people are investing in us. We don’t want “pity funding”. We don’t want someone to feel sorrow for our marginalization in entrepreneurship. What we want is for our ideas to be heard, seen and acknowledged as being just as vital to consumers as those of white women and men. What we want are equal opportunities to live whatever this “American Dream” is supposed to provide for our community, which we know was built on the backs of black men and women.
If you’re like me, you will find yourself reading this more than once and administering grace and gratitude for even taking the first step in securing a foundation of entrepreneurship, generational wealth and a black-owned brand that can and hopefully will be a household name. Position yourself to be surrounded by people who know people, with access to resources that you are not privy to. Never be afraid to remain a student, while also teaching those who can learn from your mistakes and successes. Give selflessly. Support endlessly. Both don’t cost much, but will provide financial and emotional wealth for those of us who are tirelessly and passionately working to create and maintain our black owned businesses as part of your lifestyles. Invest in black women. PAY BLACK WOMEN.