And because of this lack of capital, Black-owned businesses face challenges achieving scale. It’s relatively easy to start a business, especially given the popularity of entrepreneurship as a viable and legitimate career objective among younger americans, and young Black Americans in particular. The challenge today for Black-owned businesses is achieving the scale necessary to compete, whether for government contracts or to do business with large multinational corporations.
Tom: Are there any efforts underway to change this?
Mellody: That is the good news, Tom. We have started to see initiatives to confront the capital problem gain traction. Last fall, a number of players from the predominantly white and male venture capitalist sector met with President Obama to advance opportunities for people of color and women in the entrepreneurial ecosystem. According to the White House, over 40 leading venture-capital firms managing more than $100 billion made commitments to such efforts, and institutional investors pledged over $11 billion to create a more inclusive environment for minority-owned business enterprises to identify and obtain capital funding.
Beyond capital, we have seen access to education and mentoring for people of color expand. Around the country, we are seeing greater focus on diversity and inclusion in business schools. And as the number of minority entrepreneurs has grown, the number of organizations, associations, and other groups that have formed to provide assistance and information to minority-owned businesses has increased as well.
Tom: It sounds like there is a lot of Black history ready to be made in the business world!
Mellody: Absolutely. The importance of minority-owned businesses to our communities, and the broader economy cannot be overstated, and we need to continue to advocate for resources and programs that level the playing field and provide the support structures to help Black entrepreneurship flourish.
Tom: Agreed! Thanks for joining us, Mellody!
Mellody: Have a great week, Tom.