2018 was a Pivotal Year for African-American Entrepreneurship
A nationwide ecosystem of accelerators, investment funds and conferences is strengthening black business ownership.
Written by Jaia Thomas, Attorney and Entrepreneur
First published: May 22, 2018
According to the U.S. Black Chamber of Commerce, “African-American businesses have grown at an exponential rate in the 21st century.” Four months in and 2018 is already shaping up to be a banner year for African-American entrepreneurship. Currently there are nearly 2.6 million African-American-owned businesses in the U.S., and now there are countless platforms, programs, initiatives and conferences in place to support such exponential growth.
Kezia Williams is a D.C.-based entrepreneur who currently leads a national program designed to cultivate the next generation of African-American entrepreneurs and innovators for the United Negro College Fund. She is also the founder of The Black upStart, a national initiative to train African-American entrepreneurs. According to Williams, “The penalizing effects of racism robs black employees of fair and equal earned income simply because they are black. Therefore, entrepreneurship is not only necessary for black employees seeking to fully capitalize from their labor but also for black returning citizens who attempt legitimate employment despite policies that restrict their economic mobility and subsequent earning potential.”
Research shows that the gap in average wealth between African-American and white adults decreases from a multiplier of 13 to 3 when you compare the wealth of business owners by race.
There are several conferences taking place in this year specifically geared toward African-American entrepreneurs and entrepreneurship. The 23rd annual Black Enterprise Entrepreneurs Summit takes place in Charlotte, North Carolina, this summer with such speakers as Don Peebles and Byron Allen scheduled to present. The three-day conference brings together more than 1,000 of the country’s leading entrepreneurs, business-funding services and corporations.
In summer 2018, Black Tech Week, which launched in Miami in 2014, is brought the conference to several cities, including Washington D.C. and Charlotte, and will travel this fall to Atlanta, Detroit, Kansas City and Cincinnati. The goal of Black Tech Week is to partner with founders, corporations and the community to create an experience for investors and African-American entrepreneurs.
The 3rd annual AfroTech Conference, the largest black tech conference, took place in Silicon Valley in fall 2018. AfroTech is a conference where founders and employees of some of the fastest-growing tech startups present the tactics and strategies they use to grow their products and businesses. The previous year’s speakers included: Rodney Williams (CEO and co-founder of LISNR) as well as Diishan Imira (CEO and Founder of Mayvenn). This year the conference is expected to be the largest one yet.
Another key conference, Black Wall Street: Homecoming, also took place in fall 2018. The networking conference, which takes place in Durham, North Carolina, is for early stage African-American entrepreneurs, focused on the intersection of content, connections and culture.
Several incubators specifically geared toward African-American entrepreneurship are also sprouting up throughout the country. Plans are currently underway for the Russell Center for Innovation & Entrepreneurship in Atlanta. Named after the late Herman J. Russell, who founded America’s largest black-owned construction firm, the center will help aspiring entrepreneurs of color bring their business ideas to fruition by providing them with an array of resources. The center will launch a fundraising campaign this summer with plans to open its doors in 2019.
Another unique incubator, the ACT House, helps prime young African-Americans for entrepreneurship. Launched in 2016, the ACT House, located in Tallahassee, places African-American student entrepreneurs in one house for one year to build a startup. The ACT House was founded in 2016 and, in 2017, launched its first 12-month residential accelerator cohort designed to disrupt traditional incubation models by focusing on building winning teams alongside a minimum viable product. Among other core components, the ACT team model mitigates startup failure through a three-pronged approach that incorporates experiential leadership, dynamics of team health and immersive prototype development. ACT House is preparing to launch new locations in Atlanta and Durham, where the local entrepreneurial ecosystems and minority serving institutions could benefit from such a collaboration. Ultimately, the goal is to create a pipeline that continuously deploys more minority entrepreneurs into local startup ecosystems.
Countless apps and initiatives have also recently launched to help give African-American founders equal footing in the entrepreneurial ecosystem. Announced this month, the venture capital firm Backstage Capital recently launched a $36 million fund that will invest in African-American women founders, $1 million at a time. Backstage’s founder and managing partner Arlan Hamilton refers to the fund as the “Its About Damn Time” fund.
A new app, InvesU App, is also doing its part to infuse African-American ventures with capital. InvestU, a community investment fund for African-American founders, allows people to connect their debit and credit cards to the app, which then automatically rounds up everyday purchases and contributes it to a fund specifically geared toward African-American ventures. Less than 1 percent of venture capital funding goes toward African-American founders. Initiatives like the one taken on by Backstage Capital and InvestU seek to close the gap.
When asked to describe the state of black entrepreneurship Dominick Ard’is, founder of ACT House said, “I believe it’s flourishing, yet it continues to find its footing while also building support nodes — capital access, ecosystem support, enclaves for connection — to do so. In the last five years, it’s been an exciting process to observe. Policymakers are creating paths for African-American business owners to thrive, we’ve seen a notable uptick in Black VCs and investors, and a much-needed increase of black female founders. Confidence in the industry is increasing; however, an untapped opportunity exists to disrupt education models in black communities to infuse entrepreneurship as a tool of systemic change.”
It’ll be interesting to see how the future years shape up.