To inspire entrepreneurship in a community that is least likely to receive startup funding, we've shared inspiring quotes from Black entrepreneurs who've had to overcome hardships to achieve success. Some key findings in the research for that article included a diversity report that found that only one percent of venture-backed founders were Black. The U.S. economy benefits from Black entrepreneurs and investing in more Black-owned businesses will reap rewards for all Americans.
We're taking a look at the influence of Black Entrepreneurs on America's Economy.
Black Wall Street
In Tulsa, Oklahoma, Black entrepreneurs started their own successful "freedom colony" after being released from slavery in the late 1860s. A wealthy Black landowner, O. W. Gurley, purchased 40 acres of land in Tulsa and designated that plots of the land would only be sold to other Black freedmen and their descendants. Named for the road that ran through the area, the Greenwood District soon became a successful illustration of the Black entrepreneurial spirit with hotels, doctors, shops, law offices, barbershops, grocery stores and more. Because of Jim Crow laws and segregation, the Black-owned businesses in the Greenwood District essentially created their own economy and found much success. In a gruesome turn of events, the community was burned to the ground on May 31, 1921. The Greenwood District never recovered and one hundred years later, survivors are still seeking reparations.
Black-Owned Business Today
According to Forbes' State of Black Entrepreneurship, that entrepreneurial spirit has expanded beyond Tulsa, Oklahoma with Black women being the fastest-growing group of entrepreneurs in America. Fundera offered statistics on Black entrepreneurship including:
- There are more than 2 million Black-owned businesses in the U.S.
- 124,000 of those businesses employ close to one million Americans
- 35% of Black-owned businesses are owned by women
- Black-owned businesses receive less funding and often at higher rates
- White-owned businesses start with an average of $106, 720 in capital; Black-owned businesses start with an average of $35,205.
McKinsey, a global management consulting firm, reports that if Black entrepreneurs were given equitable access to resources and opportunities, it would unlock $1 trillion to $1.5 trillion in annual GDP. Research by the American think tank, Brookings, showed that if the number of Black businesses matched their population size and the employees of those Black businesses matched non-Black businesses, it would create more than 19 million jobs.
See Also: Why Accounts Receivable is Important for Venture Capital Funding
Notable Black Entrepreneurs
Forbes' State of Black Entrepreneurship presented a deep dive into Black entrepreneurs in entertainment, sports, music and game industries to identify the success and future of Black-owned businesses. Stacker.com went back even further to examine Black business owners from the 1700s to the present day. Some examples of notable American Black entrepreneurs include:
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Thomas Jennings - A NYC tailor who opened his own clothing store and became the first African-American to receive a patent. He used the money from his invention to purchase freedom for his wife and children and spent his life as an abolitionist.
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William Leidesdorff - A successful mercantile trader who purchased a trading ship and invested in real estate. He built the first hotel in San Francisco and is known as the country's first Black millionaire.
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Granville Woods - Founded his own electric company in 1880 and then invented the railroad telegraph. He received almost 60 patents in his life.
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John H. Johnson - Created a publishing company in 1942 and established Ebony magazine and Jet magazine in subsequent years. He was the first Black entrepreneur on the Forbes 400.
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Janice Bryant Howroyd - Began her employment agency in 1978 and has grown it into the largest minority-owned workforce management company in the U.S. with over $1 billion in revenue.
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Oprah Winfrey - Started her own multimedia production company in 1986 and has grown her net worth to over $2.7 billion.
These stories present a small facet of the influence of Black entrepreneurs on America's economy. The gap in funding and lack of resources does not limit the spirit of business ownership. We encourage our readers to click on the links presented and learn more about investing in, shopping with, or working with Black-owned businesses. As Brookings' research suggested, investing in Black entrepreneurs is key to helping the U.S. economy.
