Black economic history is an important theme to consider during Black History Month. The wealth gap (economic inequality between different races and populations), joblessness, bank lending – in all these economic areas and more, “African Americans have long been on the losing end of this trend,” former Federal Reserve Chairwoman Janet Yellen recently pointed out.
The Leading Diversity@Wharton lecture held virtually this week addressed another economic area of disparity: the struggles faced by Black entrepreneurs who often don’t have the same opportunities as their white counterparts when it comes to securing funding for their businesses and growing beyond the start-up phase.
Lecture host Stephanie Creary, an identity and diversity scholar and assistant professor of management at Wharton, welcomed guests Melissa Bradley, managing partner of 1863 Ventures, a company that bridges entrepreneurship and racial equity to support “New Majority” entrepreneurs; and Frederik Groce, partner at Storm Ventures venture capital and co-founder of BLCK VC. They talked about their approaches to diversity, equity and inclusion in the venture funding and business start-up worlds.
The challenges within this entrepreneurship and funding ecosystem are great — from decision-makers who have biases and judge people based on harmful stereotypes, to outright discrimination against entrepreneurs of color. The Wharton Global Youth Program’s new Explore Business mini-sites provide a detailed look into the impact of systemic racism on business and society. In Race and the Entrepreneur, we meet Black founder and successful entrepreneur Chris Bennett, CEO of Wonderschool, who says, “The color of your skin plays a big role in the types of experiences you have from an economic standpoint.”
We encourage all students to dive into our Explore Business pages to take a deeper look at the challenges Black entrepreneurs face because of unjust practices that limit their ability to prosper, and how the venture capital community that provides funding is working toward change.
“You find a peer group so you can actually see what amazing work you’re doing, but also have a safe way to say I totally screwed up, can somebody help me?” — Melissa Bradley, 1863 Ventures
In the meantime, this week’s diversity lecture provided some practical insight on the topic.
Bradley, Groce and Ethan Mollick, a Wharton associate professor of management who specializes in entrepreneurship and who joined Dr. Creary for the lecture, offered sound advice for the next generation of Black and women entrepreneurs who want to break into an industry that has historically held them back. Here are their top 5 tips:
- Venture capitalists want to meet you. “There’s a greater understanding of these problems and challenges across the industry than there has ever been,” noted Groce. “What that means is that if you’re an entrepreneur, a female founder, a Black founder, a LatinX founder, it doesn’t matter, you have more funds who are tuned into these challenges and willing to lend [you money] and take the time and meet… People are waiting to be blown away, and it’s your job to do it… That means practicing, talking to mentors, and not being afraid to ask what you might perceive as dumb questions, because there are no dumb questions.”
- Get comfortable being uncomfortable. “Investing and being an entrepreneur is imperfect. If you are a perfectionist, then this is definitely not your path. The role of imperfection allows people to fall and get back up and fail forward and still have an opportunity,” said Bradley.
- If you want to be a change agent in the entrepreneurial space, default to action. “You can do way more than you think you can do,” suggested Groce. “Consistent effort actually moves mountains. It’s shocking. We often underestimate the risk-reward of doing action, and we often just sit and think someone else must be doing it….If I’ve learned anything with BLCK VC and the work so many of us have done, we realized we could be the change agents ourselves as long as we worked together.”
- Once you get past the barriers, there is real willingness to change. “A lot of people are trying to figure out how to be allies and they really do want to fund more Black and female founders,” said Mollick. “If you can get through and get the warm introductions that these communities are making, I’ve been hearing very good things from my [entrepreneurship] students.”
- Find a community where you feel safe. “The biggest thing is to find a peer group so that you are not comparing yourself with everything that’s out there,” said Bradley. “You find a peer group so you can actually see what amazing work you’re doing, but also have a safe way to say I totally screwed up, can somebody help me? Don’t let the external standards define your greatness. Let’s be clear: entrepreneurship is a sport and one of the hardest sports out there. It’s also a team sport, and you need those folks around you.”
Which piece of advice mentioned in the article resonates most strongly with you? Why is it important for everyone -- regardless of race -- to understand the challenges faced by Black entrepreneurs?
Are you a young entrepreneur of color who has faced stereotypes? Share your story in the Comment section of this article.
While it's not mentioned in the article, Melissa Bradley led up to her "peer group" advice by saying that many young Black entrepreneurs are suffering from "Imposter Syndrome" right now. What do you think Imposter Syndrome is and why is it so prevalent? Have you felt this way before? If you need help with the concept, check out the Related Links tab with this article.