Black america needs angels to create entrepreneurs, not superman washington post


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Black america needs angels to create entrepreneurs, not superman washington post

  1. 1. Black America needs angels to createentrepreneurs, not SupermanBy Mike Green, Thursday, November 3, 8:27 AMMike Green is an award-winning journalist and tech entrepreneur. He is a co-founder of TheAmerica21 Project, which offers a new narrative for Black America in the 21st centuryinnovation economy.Long before anyone ever heard the name Barack Obama, Jonathan Holifield was leading theestablishment of an urban innovation ecosystem, preaching the gospel of start-up techinnovations, 21st century job growth and wealth creation in Black America.“More than 100 years ago, we asked the right questions and developed the right narrative andstrategies to progress in the industrial economy. In the 21st century, we have not,” said Holifield– an attorney, former NFL player and a fellow co-founder of the Black Innovation andCompetitiveness Initiative (BICI).“Rethinking our economic narrative and evolving our prosperity strategies to reflect today’sopportunities,” he continued, “is our principal challenge.”Business incubators and accelerators are necessary components of a vital entrepreneurialecosystem that drives job creation and wealth in this country. That ecosystem requires capital tofuel job growth. Black American and urban centers have historically been disconnected from thatecosystem. And, with millions of Black Americans sitting on the sidelines, we don’t need to lookmuch further than ourselves for leadership in changing the equation and brightening theeconomic future for those who seek to compete in the new innovation economy.The Kauffman Foundation reports that all net, new jobs in America since 1980 were produced bycompanies five-years old and younger — the result of economic fuel-injection from equity-riskcapital angel investors and venture capital. Meanwhile, Black America and large swaths of urbanAmerica experience just the opposite — no job growth. The Census counted 1.9 million Black-owned businesses in 2007, which produced $137.5 billion in revenue. That’s less than 1 percentof GDP. Nearly 1.8 million of those businesses are sole proprietors with no employees.But that was before the economic collapse.Today, Black unemployment is 16 percent — twice the unemployment rate of Whites. The depthof the problem is underscored by the Bureau of Labor Statistics’ (BLS) broader measure ofunemployment data, referred to as U-6 data. This includes, “the unemployed, as well as people
  2. 2. who would like to work but have not looked for a job recently, and those involuntarily workingpart-time.” For Black Americans ages 18-29 with only a high school diploma, the U-6unemployment rate is slightly over 29 percent, according to a Sept. 2011 data report compiled bythe Center for Immigration Studies. An even more troubling fact is the depth of theunemployment problem in Black America has been a constant reality since 1963, when Dr.Martin Luther King, Jr. spoke about the issue of unemployment to thousands on The NationalMall. Moreover, in the aftermath of the Great Recession, the wealth gap has widened, withWhite median wealth now 20 times greater than that of Blacks.That’s the backdrop for the heated debate over the scarcity of Blacks in technology sectors,particularly in Silicon Valley — the Mecca of start-up innovations and venture capital.“It’s true that few Black tech entrepreneurs exist,” says Chad Womack, a biotech entrepreneur,STEM education advocate and fellow co-founder of the BICI. “And there would be more if wecould connect a robust pipeline of tech-entrepreneurial talent to capital and the innovationecosystem.”Another pressing and oft-ignored problem is there are far fewer Blacks in the space of angelinvesting. Nearly 900 venture capital groups manage institutional funds in which Blacks havemoney invested via pensions and other funding options. These funds are used as economic fuelto generate significant job growth among fast-growing, young companies. The top 1 percent ofthese companies account for 40 percent of job growth in the nation every year. From founders tofund managers, there are few Blacks in that ecosystem, even as they contribute to its success.The Angel Capital Association, which has nearly 200 member groups representing more than10,000 individual angels nationwide, counts only one Black angel group among its members.It is vital that the innovative talent in all sectors of our society receive significant investment andaccess to opportunity in order to strengthen the nation’s overall economic competitiveness. Theproblem Black entrepreneurs face today isn’t solely one of neglect by the nation’s corporateinfrastructure, including financial institutions. The equity-risk capital ecosystem in SiliconValley and other regions of the nation are lacking (to any appreciable degree) Black, high-networth individuals — angels and institutional investors — who are willing to conduct duediligence on start-ups and invest their money to support innovations that can produce both jobsand wealth.The dismal economic data that defines the past and present for Black America should not definethe future. We must focus our attention on the problem, not individual people, and developsolutions that include our full productive participation in the 21st century innovation economy.While elected leaders play a role in the overall economic landscape, we don’t need governmentto lead us and we cannot and should not wait on Superman to save us.