According to the United States Census Bureau, there are more than 2 million businesses in the country that are owned by African Americans.
In the U.S. Census Bureau’s Annual Survey of Entrepreneurs, which includes responses from 290,000 employers, only 2.1% of American businesses with at least one employee were black-owned in 2014. About 14% of those black-owned businesses were operating for less than two years.
In Silicon Valley, they call it the 2% problem. African Americans make up a tiny fraction of the overwhelmingly white and Asian male workforces of major technology companies, the ranks of aspiring entrepreneurs and venture capitalists who control the spigot of money and access.
In today’s technological world, a tech entrepreneur needs one main thing: money to compete with the tech giants out there such as Apple and Google.
Angela Benton, founder of the startup accelerator NewME – helped minority entrepreneurs raise over $25MM in funding and says, “They tend to invest based on patterns. Their business model is based on pattern matching. If the pattern is a 20-something white male that is a dropout of an Ivy League school, they are going to look for more of those.”
“This is not a new problem for black entrepreneurs, who have often found themselves unable to access the funds needed to leverage emerging technologies for their own gain,” says Juliet E.K. Walker, director of the Center of Black Business. “In a preindustrial economy, blacks could do without factories and technology and so forth.”
Blavity is helping black entrepreneurs with AfroTech, a conference in San Francisco where the founders and employees of some of the fastest-growing tech startups will present the tactics & strategies they use to grow their products and businesses. Conversations range from raising venture funding, combining tech and culture, user design workshops and growth hacking.
Jonathan Jackson, Blavity’s cofounder, says, “You go in the room, and they’re like, ‘What does it feel like to be black?’ as opposed to, ‘What does it feel like to build a business? Afrotech is this idea of, why don’t we just have our own space where it’s understood who we are and we’re talking about the future. All the things that go into building, scaling, designing, and owning [a business] are things our community should be talking about, and it should be easier to get those resources earlier.”