By Gary J. Nix
- Black Americans engage in investments that are less likely to be associated with structural discrimination
- In 2022, Black founders have received $2B in VC funds as opposed to $4.72B in 2021
When it comes to new business, many think of receiving funding from venture capitalists. Yet, Black founders have only received approximately 1% of United States-based VC investment in 2022. Fortunately, changes in investment opportunities may lead to financing opportunities within the culture including: a growing number of VC firms led by Black fund managers, new opportunities to invest in Black-owned stocks, and the ability to engage in different funds, along with alternative currencies.
Why This Matters: Access to both funding and wealth have been historical hurdles for Black founders. Nevertheless, more opportunity usually leads to a higher probability for success. Black Americans engage in investments that are less likely to be associated with structural discrimination. If our community has more chances to invest, we have a better chance of learning how to do a better job of it.
An increase of Black-partner led VC firms raises the likelihood of these firms having an innate understanding of what is being pitched. In return, more capital should flow to Black-owned companies. New avenues of investment connected to causes with meaning, such as those connected to racial justice initiatives, help strengthen our community by creating positive circumstances for all.
Investment prospects, such as peer-to-peer lending and cryptocurrency, continue to surface. Furthermore, history has shown us that intercultural investment can eventually lead to long-standing business operations. As the Target’s (TGT -0.02%) and Google’s (GOOG -1.23%) of the world continue to build their Black-owned business investment initiatives, any ability for the community to also be self-sufficient is growth we will be interested in continually seeing.
Situational Awareness: Something else that happens when there is a spotlight on cultural activity, and that is the attention garnered by larger, “mainstream” corporations looking to accumulate some of that cultural cachet. It’s easy to remember the promises made to invest in Black businesses and the Black community during the pandemic.
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