What does it mean to be free and genuinely pursue your dreams? When little, we are told we can be anything as adults- doctor, president, singer, business owner. But does that consider the challenges people face because of the color of their skin?
According to JPMorgan, Black women are the fastest-growing group of entrepreneurs in the U.S. but remain underfunded.
Based on data from DigitalUndivided, the median seed round raised by Black women founders is $125,000 (for those who have not raised $1M). As of 2020, the national median seed round funding for a startup is $2.5M.
Juneteenth federal holiday and increased promotion of Black entrepreneurs and consumers
With Juneteenth being declared on federal holiday in 2021, there has been increased support for Black women-owned businesses and conscious marketing efforts toward Black consumers. However, understanding the true importance of Juneteenth and celebrating Black excellence daily is essential.
"We live in a society that professes freedom, but we're not as free as we believe," said Meisha Lerato Robinson, Founder of I Am, We Are. “There's a lot of constraints. I think that is what Juneteenth is also about. It's about me taking the agency to declare my freedom. And no matter what society says, no matter what is coming up against me, I am free. I am free in spirit. I am free in soul. And that is something no one can ever take away from me."
Juneteenth (June 19, 1865) marks the day when federal troops arrived in Galveston, TX, to take control and free all enslaved people. June 19, 1865, occurred a full two and a half years after the Emancipation Proclamation and is recognized as the end of slavery in the United States. Juneteenth is considered the longest-running African American holiday.
President Joe Biden declared Juneteenth a federal holiday in 2021. "Juneteenth marks both the long, hard night of slavery and subjugation and the promise of a greater morning to come," Biden said in the official bill.
Challenges that still exist for Black women entrepreneurs
Black women-owned businesses face significantly more obstacles than their white counterparts, and the COVID-19 pandemic has only exacerbated these disparities. Read our blog post on "Ways to Turn Challenge into Opportunity for Black Women Entrepreneurs" for more insight on the differences.
"One of my biggest challenges is having to unfairly prove my worth or my value," said Kris Christian, founder of Chicago French Press. "I've talked to many founders who are Black women and they agree that we must build ten times as much as other groups to validate the same high quality we naturally bring. That along with discrepancies with resources, lack of access to capital and the existing systematic oppression while running my business can get tough at times. The hard work we have put in enables us to thrive despite these inherited obstacles. I can’t help but wonder how much further along we could be if we weren’t impacted by limitations of bias from society, investors and other groups in control.”
Specific challenges Black women entrepreneurs face
Biases in business. Black women entrepreneurs still face prejudices due to their race and gender, putting them at a disadvantage in starting and managing their businesses.
Lack of mentorship. Mentorship can be vital to the success of a business for an entrepreneur. With fewer Black women entrepreneurs securing a large fundraising round, finding role models can be challenging.
Difficulty in access to capital and funding. Black women tend to self-fund their startup capital because they find it hard to get funding elsewhere. However, in 2020, the rejection rate for Black business owners applying for funding was three times higher than the rate for white business owners, according to Goldman Sachs.
Challenges in creating a network. The bias Black women experience also makes it difficult for them to develop valuable business relationships and connections.
How can women business owners from all races and backgrounds empower each other?
There's room at the top for all women, and we must share our knowledge.
"People don't realize that when you support a black business, you support the entire neighborhood," Christian said. "So when businesses grow, they're able to hire more people. Because for people to get out of their situation, to get out of the poverty that they inherited, we intentionally need to support over time sustainably. These jobs become well-off individuals, and businesses can do more work in the community."
Some ways women can empower each other and lift everyone include:
Partnerships - offer discounts to other businesses in your community. For example, if you own a party supply store, provide a deal for the local black-owned bakery and encourage people to go there for their dessert needs.
Promotion: Tell people about the Juneteenth small-business festival in your community. Tag your favorite Black women-owned businesses on social media. Word of mouth is a powerful marketing tool.
Education: Learn more about the Black experience in the United States through research, including attending lectures, visiting museums, and watching documentaries.
Compassion: Listen to Black women's experiences and stories. Provide introductions when appropriate.
Advocacy: Ask questions and be a part of the solution, whether attending Chamber of Commerce meetings, voting on specific proposals or initiatives that would support Black-owned businesses, or learning how nonprofit organizations in your community help Black people.
"Juneteenth has been part of my life and many black people's lives for a long time before it was a federal holiday," Robinson said. “Now, we have more opportunity to educate, have discussion, and better understand the Black experience in America. And I think that is beautiful."
Additional resources:
Black Business Green Book – An online Black-owned business directory founded by the civil rights advocacy group, Color of Change. You can help protect and shop Black-owned businesses by state or industry, including fashion/clothing, home goods, food and drink, health/wellness, and more.
Black Women Business Owners of America – The Black Women Business Owners of America is a business association that supports African American women business owners, entrepreneurs, and startup founders across the country.
Buy from a Black Woman - A nonprofit organization that ensures Black women have the tools and resources that will allow them to be successful. Through educational programs, an online directory, and funding, Buy from a Black Woman continues to grow as a trusted resource that helps Black Women in business.
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