BIPOC (Black, Indigenous, and people of color) entrepreneurs are already at a disadvantage when it comes to starting a business. They lack their own resources, may not be able to devote 100 percent of their time to a dream, friends and family are not likely to be able to help, and their credit scores are not typically high as those of white entrepreneurs.
Therefore, it is crucial for BIPOC entrepreneurs to know their basic funding options and how they work, beginning with Community Development Financial Institutions (CDFIs), grant-makers, and other lenders that can get them started in the business.
But these entrepreneurs need extra support learning about and navigating the sometimes limited resources available to bridge the Valley of Death, the drop in funding available to a start-up that occurs when they have exhausted bank loans, small investments from friends and family, and grants,
They must prove to venture capitalists that they’re not a risky investment because they have revenue, solid command of their operating model and risks, and an experienced management team. That requires a combination of understanding the goals and investment strategies of venture capitalists, the financial instruments available to them as they grow and need more funds, and how to build the organization and operation to show investors they are a solid investment.
In regions with fewer venture funds, it is even harder for start-ups to bridge the valley. For example, an entrepreneur in Silicon Valley has access to more venture funding than, say, someone in Western North Carolina.
However, the problem is not necessarily that there are insufficient resources to support BIPOC entrepreneurs. It is that there is no publicized, detailed resource to which they can go to understand what funding and professional support is available when they need it. Further, they need an organizing mechanism to bring together all those resources — with them — to support their success.
To provide such a “map” to guide entrepreneurs to resources from initial start-up, through the Valley of Death, and then to early stage growth requires that banks, grant-makers, venture capitalists, and experienced entrepreneur mentors become more involved in supporting entrepreneurs.
Doing that requires communities to find ways to strengthen the connective tissue among all the different resources in a region so that there's a comprehensive, integrated network of resources including all types of financial and professional resources to support entrepreneurs.
To tap the wealth of resources and knowledge in Western North Carolina, Dogwood Health Trust commissioned a study, called the WNC Capital Landscape Assessment, which provides a clear guide to the financial and professional resources available in the region with a special focus on ways to support entrepreneurs, especially women and BIPOC communities
The report helps entrepreneurs connect with the different types of resources across the region, depending on their stage of development to more easily get to where they need to be to get the kind of support when they need it.
It includes specific resources for grants loans, equity, and quasi equity. It includes resources a business needs to start and what entrepreneurs need at different stages of their company’s evolution and the sources of those funds, including names of specific firms and resources.
It also provides information and resources to support incubation, acceleration, technology services, mentoring and coaching, capital raising, organization and governance, and strategy.
The study was conducted by a team led by David Lilly, an executive and growth consultant, and Jesse Fripp, Principal and CEO of Shining Rick Ventures. It is based on interviews of over 40 different organizations in the region .
Dogwood plans to bring together representatives from the range of organizations in the region — and entrepreneurs — to talk about how to improve the coordination efforts to support start-ups in the region.
BIPOC entrepreneurs will be part of the process beyond just being evaluated by lenders, venture funds, and grant-makers. They will provide feedback to help develop financial instruments and policies related to them.
Some examples of the types of organizations participating gin the region are:
Mountain BizWorks provides resources to professional support to entrepreneurs, from helping to arrange funding to expertise, and including financing to help local small businesses launch and expand by offering non-traditional loans from $1,000 to $500,000.
NC IDEA offers a combination of grants and programs directly and through a network of partners to help entrepreneurs achieve their goals.
Eagle Market Streets Development Corporation supports economic and social independence to the low-to-moderate income community by focusing on property development, economic business and workforce development.
Hatch Innovation Hub is one location for space, mentorship, business development programs, and a supportive community of founders. It hosts roundtable discussions that offer peer support, pitch nights featuring local experienced entrepreneurs who listen and provide feedback about a start-up’s financial picture, team, and operation, and 90-day programs that pairs entrepreneurs with mentors to help them scale.
While each of the organizations and the programs mentioned are valuable, their power and value to support and accelerate new business ventures among BIPOC communities will be profound when they are more integrated and coordinated.
This kind of integration an activation is required to build a more diverse and competitive — and therefore more democratic and market-driven — entrepreneurial environment in The United States.
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