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Can There Be a New Golden Age of Black Entrepreneurship?

For all that the Civil Rights movement accomplished, the reality is that economic activity within Black communities remains low — far lower than at the beginning of the last century. Kelly Burton wants to change that.

For all that the Civil Rights movement accomplished, the reality is that economic activity within Black communities remains low — far lower than at the beginning of the last century. Kelly Burton wants to change that.

In 2009, after she earned a doctorate in political science from Emory University, Kelly Burton launched Nexus Research Group (NRG). The group provides consulting for clients in designing and implementing social-impact projects in predominantly urban, minority communities. It’s been successful, maintaining a book of work and a healthy track record. Then her second entrepreneurial venture didn’t go as well.

Burton, 42, grew up in a working-class family, a family proud of its heritage. She says she’s particularly impressed by the Black community’s “Golden Age” of entrepreneurship in the early 20th century. Tragically, she says, the genius of these men and women is often overlooked despite their potential for developing solutions to some of the nation’s most persistent social problems. This, combined with an entrepreneurial crisis, provided insight and gave shape for a new venture.

In June, Burton talked with Common Good’s Amy Sherman about her work and her hope for the future of work in Black America.

I wonder whether there have been any particular Black entrepreneurs from history who have inspired your own creativity?

For me it’s less about an individual and more about the experience of Black people in this country. I feel that my purpose on this planet is to build on what has been done by those gone before. I stand on the shoulders of ancestors whose wealth was extracted, whose blood has been spilled, and whose dreams have been sacrificed. I believe I owe it to them to live into their resilient spirit and be the boldest innovator I can be.

What unique practices of ingenuity have you seen among Black entrepreneurs?

What I see with the highly successful entrepreneurs, those who achieve national prominence, is that they just really have to think outside the box because traditional systems are not set up for them to be successful. I think about Dawn Dickson of PopCom and how she was one of the first to leverage equity crowdfunding — she raised a million dollars. Or someone like Jasmine Crowe who’s really leveraged the pitch competition to be able to advance her work. For the average Black small business owner, what I see is bootstrapping. That’s our superpower. But, unfortunately, it’s also our kryptonite because it sets a ceiling on growth. About 97 percent of all Black-owned businesses have no employees.

Can you describe what’s wrong with the traditional system for accessing capital? What particular challenges do Black entrepreneurs confront?

The biggest challenge that we’re currently facing is that the investment sector — whether that’s traditional capital like bank loans or angel capital or venture capital — has not figured out the equity play. I’m talking about what is necessary in order to level the playing field. The average Black child comes into the world with one-tenth of the inherited wealth of the average white child. Ten times greater access to resources is going to bear out over that white child’s lifespan. It’s going to determine the quality of the neighborhood that they live in, the quality of their schools and health care, etc. It likewise shows up in their businesses. It has implications for their ability to raise a family-and-friends round [of startup capital] and their ability to put more personal savings into their ventures.

So how this shows up in the investment space is that investors have the exact same check boxes for Black and brown folks as they have for white folks, but whites have 10 times the resources.

Let’s say the task is to make a birthday cake. I give one person the ingredients necessary to make a birthday cake. And then I give a second person the ingredients to make a cupcake. And I come back around, and say, “OK, let me see your cakes!” And the first person shows off this gorgeous birthday cake. And I say “Great job.” And then I go to the second person and they say, “Here’s a cupcake — and I promise you it is the most delicious cupcake you have ever tasted!’ But I say, “You were supposed to make a cake with that!” They respond: “But I only got the ingredients for a cupcake.” And that’s what we’re seeing over and over again. They are expecting Black and brown folks to come, checking the exact same boxes that white folks can check. And it’s not fair because they didn’t have the same inputs that go into the creation of a scalable, viable business.

Was this “cupcake problem” the main problem that motivated you to start FOC?

Yes, it was exactly the cupcake problem that triggered me to start Founders of Color.

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"I feel that my purpose on this planet is to build on what has been done by those gone before. I stand on the shoulders of ancestors whose wealth was extracted, whose blood has been spilled, and whose dreams have been sacrificed. I believe I owe it to them to live into their resilient spirit and be the boldest innovator I can be."

Kelly Burton

FOC is also based on some lessons you felt you’ve learned as an entrepreneur, right?

Yes. In 2017 I closed down a company I’d started five years earlier called Bodyology. I’d used about $180,000 of my own money for it. It did well in many ways — we got a lot of great national press, got invited into a special training program with Macy’s. But I couldn’t get it to sufficient profitability. I realized I didn’t have access to the capital, the relationships, the education, and understanding that I needed in order to build it. At the time I was a contributor to the Huffington Post and was writing on how to keep your startup out of the startup graveyard. And I got a whole lot of feedback from folks saying, “Oh my gosh, that’s my story, too.” I realized that often Black and brown entrepreneurs were in isolation, making the same mistakes. And I thought FOC could be a space where [we] could come together and build a community that was centrally concerned with helping these businesses to grow.

How many people have graduated from the program?

We’ve done two cohorts so far with a total of 12 entrepreneurs.

Can you say a bit about the “universe” of Black entrepreneurs and then talk about who you see as FOC’s primary target audience?

The largest segment is a group we call “Dreamers.” These are entrepreneurs operating businesses generating under $25,000 annually. The average Black female-led enterprise brings in around $13,000 a year; the average Black male-led business around $25,000. FOC offers some resources and webinars for this group because the need for supporting them is so great. But our business model is built around those at the next stage of entrepreneurship, people we call the “Hustlers.” These are the solo-preneurs who are bringing in six figures and want to know how they get over the hump. We believe if we can focus on those businesses, it will have a catalytic effect in communities of color around the country because these are the potential job creators. They need help with the challenges of scaling up. We tell them what got you here won’t get you there.

What do investors need to know about Black entrepreneurs that you think they do not know?

There’s a lot of genius in the Black community and in the Latino community. And that the solutions to a lot of the most entrenched problems in American society today lie in those communities. Unfortunately, that genius is not being cultivated or supported. A lot of that genius is being left on the vine to wither. And as a result, these issues continue to perpetuate because those folks from those communities just don’t have any voice, don’t have a means for carrying forward their ideas.

I think that there’s just a fundamental dismissing of Black and brown folks and our ability to contribute to society and markets. Some of that’s being challenged now but it’s still an underlying stereotype. There’s not a sense that we can contribute beyond food or singing a song or bouncing a basketball. People don’t want to think that they are explicitly racist, but all of us have been receiving the same toxic messages. It’s something that lies in the subconscious of our society.

What are the steps we need to take to address the challenges you’ve mentioned?

At FOC we’re doing some advocacy work to address the systemic challenges facing founders of color. There just isn’t enough of that work happening. As a society, we have to deal with the fact that wealth was extracted from one group, that the white nation was built on the backs of another community. We need to come to grips with that and figure out what was the worth of that, the value of that, and how we direct resources in ways that really allow Black and brown people to fulfill their maximum potential in this country.

This story is from Common Good issue
05.
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