Imagine walking into a room full of people that don’t look like you or act like you. Everyone seems to know about technology you’ve never heard of before and you get the sense the room is full of confident, possibly even arrogant, people.
Unless you’re a white, cis-gender, heterosexual male, this is probably your first impression of entrepreneurship.
Is this an exaggeration? Perhaps. But perception can be perceived as reality for underrepresented founders. I appreciate Vernā Myer’s quote, “Diversity is being invited to the party. Inclusion is being asked to dance.” Diversity and inclusion aren’t going to happen unless there is a culture change within our systems.
When it comes to changing the landscape of entrepreneurship, the way most people phrase the problem we’re facing is, “How do we get more diverse people to become founders?” However, based on my experience, a more powerful and impactful way to reframe this question is, “How do we change the culture of entrepreneurship to become more inclusive, so diverse founders can thrive?” When the majority of our entrepreneurial ecosystems are composed of powerful, white men at all levels – from entrepreneurial instructors to investors – you create a system that is designed to discourage the diversity it’s seeking to attract.
I first became aware of entrepreneurship as a potential career path while sitting in an Economics course at UNC-Chapel Hill where they had just recently launched a “Certificate in Entrepreneurship.” I didn’t really know what that meant, so I didn’t think anything of it. Like most students, I focused on landing a stable job after graduation.
It was only when I went back to school to get my MBA that I got more serious about understanding how to start a business.
Thankfully, universities are a relatively safe space to test ideas and learn about the fundamentals of entrepreneurship, but my experience wasn’t perfect.
I took a course on business plan writing. By night, we read a book on how to write a business plan and applied our learnings into the actual development of a business plan. However, the main focus of the course within our class time was teaching us how to make a compelling pitch deck. Our instructor assumed that if you want to be a successful entrepreneur, you’ll need to go after investor funding.
In all reality, the mindset that entrepreneurship is driven by investment is flawed. Only 0.91% of startups are funded by angel investors and 0.05% of entrepreneurs actually receive VC funding.
After completing the business plan writing course, I considered joining an accelerator program within the university where student entrepreneurs could be mentored by seasoned entrepreneurs while bringing a business idea to life. I had written a business plan for a startup focused on developing an inclusive line of fitness wear for women, since all of the products on the market at the time were geared towards athletes.
On the first day of the accelerator, I stood up in front of a panel of all white men, most of whom were tech entrepreneurs, and pitched my idea. I was not prepared for the Shark Tank-style feedback. The panel of mentors essentially said that while the problem was clear, the retail industry is “the worst” and there is no way that I would be able to develop a sustained competitive advantage.
If I’m being completely honest, I walked away feeling like they looked down on my idea and didn’t take me seriously. Was their feedback valid? Yes. Was their assessment correct about an inability to achieve a sustained competitive advantage? Yes. Is retail a tough industry? Absolutely. Did they also fail to predict the epic rise of athleisure wear only a few years later? Also, yes.
I decided that day to accept their feedback and completely abandoned the idea. In doing so, I bowed out of actually taking any risks and opted out of an experience that could have prepared me for when I ultimately took the leap into full-time entrepreneurship to build my marketing consultancy.
Looking back, I see this as a missed opportunity. Entrepreneurship is about taking risks… and failing more times than you can count.
So how can we begin to truly level the playing field and make entrepreneurship a field where underrepresented founders can thrive?
1. We need data and research studies conducted to help us truly understand the needs of underrepresented founders within our entrepreneurial ecosystems.
In order to develop effective solutions to build an inclusive ecosystem, we need to analyze who is currently being served and connected to our entrepreneurial ecosystems and who is being left out.
A few years ago, I created a short survey for local small business owners to get a sense of what goals founders had when they were building their companies. 86% of survey respondents weren’t interested in building a high growth company and 34.48% of the respondents wanted to build a mission-driven company.
This was enough inspiration for me to begin creating resources for mission-driven entrepreneurs. However, conducting a more thorough, national research study would provide more concrete data.
Another anecdote that suggests a need for more data is when one world-renowned ecosystem builder recently mentioned to me that Black women-led side hustles are the fastest growing sector of entrepreneurship. When I tried to locate data that supports this statement, it was nowhere to be found.
The closest data I was able to find is that, according to the American Express 2019 State of Women-Owned Business, 42% of net new women-owned businesses are founded by black women, which is three times their share of the female population (14%).
If many of these founders are side hustlers, then that should inform how we strategically approach developing resources for this new set of entrepreneurs that are building companies in our communities. Conducting research that paints a more holistic picture of their needs would be invaluable to the development of programs that will meet entrepreneurs where they are on their entrepreneurial journey.
2. We need to develop inclusive, accessible entrepreneurship support programs that are run by diverse entrepreneurial educators and coaches that serve the full spectrum of entrepreneurs: from side hustlers to high growth startup founders.
We aren’t going to develop the next generation of diverse entrepreneurs if we don’t have programs that create a safe space for aspiring founders to learn entrepreneurial tools, test ideas, and fail without having their ideas shut down prematurely. You learn the entrepreneurial process by taking action and the experience of building an entrepreneurial skill set is invaluable regardless of the direction you ultimately go.
By training more people on the entrepreneurial process, it will drive innovation in our community whether they ultimately decide to found a company or they become an intrapreneur within a more established organization. In order to inspire more underrepresented founders to get engaged, we need these programs to be led by diverse entrepreneurial educators and coaches. We also need to consider the accessibility of the different types of support and training programs available.
Some aspiring entrepreneurs need to be provided with support on nights and weekends as they are working during the day. Some entrepreneurs are parents, who would prefer access to support programs that work around their kid’s schedule. Other aspiring entrepreneurs are more likely to take advantage of programming as a student at a university or community college.
These varying programs need to be developed to serve entrepreneurs at different stages. The accelerators and incubators that exist today are primarily geared towards serving a very specific tech-focused, high growth area of entrepreneurship. While these resources are extremely valuable, they also fail to serve the vast majority of entrepreneurs: the side hustlers, the small business owners, the service providers, the solopreneurs, the mom-and-pop shops, and the list goes on.
For many of these reasons, I was inspired to create the Figure Your Sh*t Out (FYSO) Accelerator program. I wanted to develop a support system for founders that I wish I had when starting my entrepreneurial journey. The name was a joke at first, but we ultimately realized that helping entrepreneurs “figure their sh*t out” was the primary goal of the program and set the tone for the type of community we wanted to build.
FYSO is the first accelerator program for mission-driven founders that focuses on creating a safe space to test their big ideas, hone their business models, and figure their sh*t out, within a supportive community. We focus on community and collaboration over competition. We also let founders define what success looks like for themselves. We don’t push an agenda of high growth. Instead, our focus is on giving them the tools and leadership skills necessary to become successful entrepreneurs or innovators.
We piloted the program with a diverse group of entrepreneurs, purposefully composed of 50% men and 50% women. When the program officially launched in the fall of 2019, there were 9 womxn entrepreneurs who joined our first cohort. In our second cohort we’ve welcomed some amazing men into the program and we currently have 22 founders participating, 78% of which are womxn and 38% of which are BIPOC founders.
We believe our emphasis on serving mission-driven entrepreneurs, as well as our focus on helping develop participants as leaders that are empowered to define success on their terms, is what has led to the program’s diverse and inclusive community.
3. In order to grow businesses founded by underrepresented founders, we need more diverse & inclusive sources of funding.
As entrepreneurs graduate from playing in the “rec league” or “minor leagues” of entrepreneurship, where they are casually testing out ideas, to the “major leagues” of working to scale their business, we need diverse leadership and avenues of providing sustainable, unbiased funding.
During our latest cohort of the FYSO accelerator program, we had Wanona Satcher, Founder & CEO of Makher’s Studio share her story of building and scaling her green manufacturing and design-build firm that specializes in unique modular shipping container spaces that transform how we build community, employ locally, and make meaningful connections.
Wanona shared, “Men receive investment for potential. As black womxn, we receive investment only based on demonstrated results.” The way Wanona was able to secure SEED funding for her business was through crowdfunding on the platform iFundwomen.
According to the Academy of Management research study, Wanona’s perspective reflects reality. The Academy of Management conducted a study where Q&A interactions between 140 venture capitalists (40% female) and 189 entrepreneurs (12% female) showed that not only did the male-led startups raise five times more funding than female-led startups, but the questions asked were different, too.
Men were asked about the potential gains of their company where women were asked about potential losses. 67% of questions for male entrepreneurs were promotion-oriented while 66% of questions for female entrepreneurs were prevention-oriented.
While there are many white male investors and business coaches that are allies, it’s still important to have perspective and support from successful entrepreneurs “like you.”
There is also a huge potential opportunity for sustainable contracts for businesses led by underrepresented founders that understand how to connect to corporate supply chains and win government contracts. More than two years into my business I just recently learned that you can reach out to a local PTAC representative, a free consultant that is available to work with small businesses to help navigate government and state contracting opportunities. Creating more clarity around how to build a scalable business that will qualify for these opportunities as well as the types of opportunities that exist could be a game changer for many womxn & BIPOC founders.
In order to truly level the playing field, we need a more diverse and inclusive ecosystem of investors, accessible investment options, and information around contracting opportunities.
4. We need to learn from & invest in scaling the programs & models that are effective in helping underrepresented founders thrive
While we have a lot of work to do in leveling the playing field, there are many examples of programs and diverse entrepreneurial leaders that are making a positive impact that should be modeled in all communities.
Below are a handful of examples of successful models.
- Inclusive Entrepreneurial Support:
- Helius Foundation – Helius provides training and coaching for small businesses and necessity-driven entrepreneurs. They work closely with small business owners to help them earn and pay a fair living wage.
- LaunchRaleigh – Launch Raleigh supports and develops entrepreneurs and small businesses in under-resourced communities in Southeast Raleigh, by providing access to business loans, business development services, and networking opportunities.
- Black Dollar – Black Dollar is focused on creating opportunities for entrepreneurs to showcase their skills, services, and products. They encourage business and consumer engagement with entrepreneurs through their online network, in an effort to create a greater sense of togetherness within the business community.
- FYSO Accelerator – I shared a bit about the accelerator earlier. One of our goals is to take our curriculum and facilitator training and begin developing partnerships with different organizations to bring this model to different sectors of entrepreneurship.
- Inclusive High School Entrepreneurial Education:
- District C – District C provides real learning experiences through purposeful coaching from trained experts. They empower forward-thinking educators, schools, and institutions with the training and tools they need to get their students ready.
- Applied Synergies Partnership – This model could be applied across other high schools. Applied Synergies delivers experiences via agents working in synergy that empower students with leadership skills that help them achieve their future goals and aspirations.
- Inclusive Funding:
- Backstage Capital – Backstage Capital understands underrepresented founders don’t have the same funding opportunities and has invested in more than 140 companies led by women, people of color, and LGBTQ+ founders.
- digitalundivided – digitalundivided is a social startup that merges data and heart to develop innovative programs and initiatives that catalyze economic growth in Black and Latinx communities.
- iFundWomen – iFundWomen is the go-to funding marketplace for women-owned businesses and the people who want to support them with access to capital, coaching, and connections.
- SheEO – SheEO is a radically generous community supporting women and non-binary people with 1 million activators helping women working on the World’s To-Do List. They are working to build a $1B dollar perpetual fund that will invest in women-led ventures.
By working towards creating diverse and inclusive cultures throughout all levels of the entrepreneurial ecosystem, it will be tremendously beneficial to our economy. For example, four million new jobs and $981 billion in revenue would be added if the average revenue of minority women-owned firms matched that of white women-owned businesses based on the American Express 2019 State of Women Owned Businesses Report.
It’s also worth noting that according to one research study conducted by the Boston Consulting Group, every dollar of funding received by women-founded or co-founded startups had generated 78 cents in revenue, which is more than double the revenues generated by male-founded startups (31 cents). By creating more equity in entrepreneurship, it truly is a “win-win” for both founders and investors.
To make this possible, it’s up to us to start shifting the culture of the systems we participate and lead in to adopt an inclusive approach to building our next generation of entrepreneurs and innovators.
Christina Marie Noel is an award-winning Social Entrepreneur, Marketing Strategist, Business Coach, and speaker that specializes in helping mission-driven organizations thrive. She is the Founder of Certified B Corp Marketing & Strategy Consultancy Noel & Co. as well as the FYSO Accelerator, the first accelerator program for mission-driven founders that focuses on creating a safe space to test their big ideas, hone their business models, and figure their sh*t out, in community.