To Fuel Inclusive Entrepreneurship, Give Communities a Voice Women and people of color have the ideas. They just need opportunity, capital and support to reach the next level.
By Glendowlyn Thames Edited by Frances Dodds
Opinions expressed by Entrepreneur contributors are their own.
The pathway for entrepreneurs is frequently filled with roadblocks, especially for women and people of color. But employing community-driven solutions to shape public policy can help overcome barriers to many of these entrepreneurs' successes. To find solutions that work, it's incredibly important that ideas for development are shaped within communities, instead of from outsiders purporting to understand a community's perspective and needs.
Community engagement is key
Girls for Technology is one of my favorite examples. It was started by Sabrina Tucker-Barrett, who worked for an insurance company in Hartford, Connecticut, where she became concerned that local insurers struggled to find qualified workers largely because the school system wasn't training students for the quality jobs available.
She formed Girls for Technology and began working with local schools to offer STEM-related programming to encourage and prepare young women to be leaders in science, technology, engineering, and math.
Last fall, four Hartford high school students who had participated in the Girls for Technology afterschool program pitched an extraordinary invention to Facebook executives in Menlo Park, California.
It all began when the girls in the afterschool program were challenged to create a chat-bot that addressed a community concern. A month later, the students, Elyece Patterson, Natalie Best, Chelsea Cranford, and Angelique Phillips, invented a computer program called "Eboni" that helps African American youth prepare for their first jobs. It relays information on workplace attire, hairstyle, and demeanor. Their idea, inspired by the community program, won a Facebook "Best Social Impact Award."
Throughout the country, community-based organizations and programs are recognizing the need to invest time and resources into helping underserved entrepreneurs. These are people with big ideas for scalable businesses and the potential for expanding markets, but they require outside investment to establish themselves and grow.
Entrepreneur activities are increasing across the country, but government, philanthropy, and the private sector must step up efforts to make the entrepreneur environment more inclusive and ensure everyone is welcomed, respected, and valued. Only with equitable treatment and access to opportunity can women and people of color reach their full capacity in the nation's economy.
Related: Minority-Owned Small Businesses Aren't Getting Stimulus Loans ...
Access to capital is a huge hurdle
A primary concern for these entrepreneurs is access to capital. The wealth gap demonstrates that African Americans and Latinos have fewer financial resources than whites, so when it comes to financing their dreams they are disadvantaged. (For example, recent U.S. census data revealed that black wealth is 7% of whites'.) In fact, financing is a challenge for all entrepreneurs: Venture Capitalists reject 98-99 percent of the ideas they are presented because they don't meet their criteria for funding, or other subjective reasons.
Entrepreneurs often turn to their savings or family, friends, and networks for funding. Women and especially minorities don't often have access to networks of wealth and social capital or simply don't know how to navigate. This fact makes it even harder to get ideas out of the garage.
There are a small number of community-created sources for startup capital. Detroit has two notable organizations – Michigan Women Forward, started by 30 Michigan women in 1986, and ProsperUS. Both are sources of microfinancing for new and very small businesses with a focus on helping minority entrepreneurs. (To date, ProsperUS has allocated 93% of its loans to minority-owned businesses.) But these two are the exception, not the rule; the nation needs many more locally created sources of this type.
Technical knowledge is a valuable currency, too
For those entrepreneurs skilled enough to chart a course forward, another hurdle is developing the tactical and technical knowledge to launch and run their startup. Entrepreneurs need know-how on everything from fleshing out a business plan to bookkeeping and recruiting investors. Technical assistance is almost as valuable for entrepreneurs as capital.
That is why it is heartening to see community-based organizations and programs banding together with entrepreneurs to provide the resources they need. In Connecticut, as well as across the country, entrepreneurs are being assisted with strong mentorship, seed capital, working space, and professional expertise. It's making a difference.
Related: 3 Ways to Support Minority-Owned Businesses
Partnerships are critical
The Women's Business Development Council supports women entrepreneurs across Connecticut with workshops, one-on-one coaching, and training programs. In just five years, The Refinery has mentored 39 companies and helped raise more than $30 million in funds for women and diverse entrepreneurs.
Collab New Haven, an incubator/accelerator, is providing funding, mentoring, and education to entrepreneurs, focusing primarily on minority-and women-owned startups. Build Institute in Detroit exemplifies what's happening across the country – since 2012, more than 1,800 aspiring entrepreneurs have graduated from their classes, which providws them with tools, resources, and a support network.
Part of what makes these organizations successful is their understanding of entrepreneurs and their communities. Local, state, and federal governments have significant resources that can be used to assist entrepreneurs, but a partnership within the community is essential for success. The same is true for the private sector.
Why is this kind of collaboration important?
Successful entrepreneurial ventures in high-growth industries can account for half the new jobs created in a metropolitan area. But for that kind of activity to happen in communities of color, we must make more of an investment in developing community-based programs and solutions that enable entrepreneurship and innovation.
That's the inclusive economic development story we should all want to tell.
Related: Meet the Black, Female Entrepreneurs Making a Safe Space for ...
