There has been a groundswell of support for entrepreneurs of color in cities and rural communities across the country. Accessing capital, however, can be a struggle for many entrepreneurs of color who might not have generational wealth or can face lending discrimination￼. With the United States slated to be a majority minority populous by the year 2045, ensuring adequate support for minority-owned businesses is vital to achieving equitable economic outcomes.
Community development financial institutions (CDFIs) and banks can play an important role in promoting equity, and overcoming systemic barriers that limit certain communities from pursuing entrepreneurship, including limitations of being deemed high-risk for lending resulting from institutional racism in our banking system and a widening wealth gap. Both CDFIs and banks are increasingly investing resources to support entrepreneurs of color, particularly in Detroit, San Francisco and the South Bronx. CDFIs are well suited as connectors and local stakeholders to advance this support and ensure it is culturally appropriate.
In this Spotlight on Entrepreneurs of Color: Pipeline Cultivation and Leveling Support, we highlight the cross-sector work being done to invest in ventures led by entrepreneurs of color, including efforts to build the pipeline of entrepreneurs of color and intentional programming happening in LISC’s network to support aspiring entrepreneurs. Our peers in philanthropy have been investing capital to start or scale businesses, and build entrepreneurial capacity. Additionally with their newly launched, Advancing Black Pathways, J.P. Morgan Chase aims to “grow existing firm efforts to expand access to education and training, enhance career opportunities and build wealth”. Not only are the capital investments vital to this cohort but also are culturally relevant and tailored programming. We have featured a story capturing work happening in Boston and Chicago that have created incubator and accelerator programs specifically for entrepreneurs of color.
We hope the compilation of these resources spurs your own efforts to support￼ entrepreneurs of color in your community and drives further investment (financial and capacity-building) to yield wealth generation for entrepreneurs and their communities.