Before the pandemic, more Black women entrepreneurs were starting their own businesses than any other group in the U.S. Now they're leading the charge toward recovery, helping to buoy Black business ownership rates to 30 percent above pre-COVID levels.
The messed up thing is: This marked success doesn't always translate into dollars and cents. Although venture capital funding to Black women entrepreneurs reached a five-year high in 2021, it still made up less than 1 percent of the total funds VCs sent to U.S. startups. Black-owned firms are also twice as likely to be turned down for small business loans compared to those led by white founders, and those systems of racial bias and discrimination even extended to Black-owned small businesses seeking pandemic relief.
In short, although a growing number of companies have pledged support for Black communities, including Black-owned businesses, those efforts aren't materializing fast enough for Black women entrepreneurs. To say there's much work to be done is an understatement.
Startups founded by Black women received 0.34 percent of total VC capital spent in the U.S. in the first half of last year, according to research from Crunchbase. That may sound inexcusably low — and it is — but believe it or not, it's a modest improvement from years past. From 2012 to 2014, for example, Black women entrepreneurs received only 0.20 percent of all VC deals, according to DigitalUndivided's Project Diane.
That progress is still far too slow, but a new effort from Mastercard could offer a boost for Black women entrepreneurs across the country. In a move announced earlier this month, the financial services giant is expanding its partnership with Fearless Fund, a VC firm "built by women of color for women of color," as part of a broader bid to support Black women-owned businesses in the U.S.
The financial giant first partnered with Fearless Fund last year on the Strivers Initiative, billed as a consumer-facing platform to elevate "the visibility of Black female business owners overcoming obstacles to maintain and grow their business, as role models for the community and future generations." The initiative included a grant program in partnership with Fearless Fund, along with a multi-city road show aimed at raising the profile of Black women-owned businesses in communities across the country.
The second annual Fearless Strivers Grant Contest will go even further, awarding Black women entrepreneurs across the U.S. with $10,000 grants, digital tools, and mentorship to help them build, protect and sustain their small businesses. The grants will be disbursed by Fearless Fund, with funding from Mastercard, and the two groups will work together to mentor and support the winning founders.
“We are thrilled to continue Fearless Fund's partnership with Mastercard and host the Fearless Strivers Grant Contest for a second year," Arian Simone, co-founder and general partner of Fearless Fund, said in a statement. "Women of color-led businesses continue to be one of the fastest-growing economic forces, and Mastercard’s commitment to help us create a more equitable playing field for these women is exactly the kind of support needed to ensure their success.”
While 76 percent of people believe that knowledgeable mentors are critical for advancing their careers, only 37 percent actually have one. In particular, Black entrepreneurs are less likely than their white peers to have access to the mentorship networks that could help them build their businesses.
“This isn't necessarily a money problem,” said Kathryn Finney, founder of DigitalUndivided, which provides biennial data on Black and LatinX women entrepreneurs through Project Diane. When TriplePundit spoke with Finney back in 2018, she broke down what these founders need to succeed. “[VCs and funders] also need to open up their networks," she told us. "They have to do some mentorship and make sure that founders are connected to the right people."
That sounds a whole lot like this latest move from Mastercard — and some others like it. Mastercard's effort includes the newly formed Strivers Mentor Collective, made up of subject matter experts, celebrity entrepreneurs and Mastercard ambassadors who have gone through the ups and downs of entrepreneurship firsthand. The collective includes heavy-hitters like Simone of Fearless Fund, Blavity founder and CEO Morgan DeBaun, James Beard Award-winning chef JJ Johnson and Los Angeles Dodgers manager Dave Roberts, along with Mastercard experts who signed up to share their experience and lift up a new generation of Black women entrepreneurs.
"Small business owners are bonded by the entrepreneurial journey we face. It's often an uphill battle," said James Beard Award-winning chef Marcus Samuelsson of Red Rooster Harlem, who will also advise entrepreneurs through the collective. “Black-owned restaurants and businesses, in particular, have been disproportionately affected by the pandemic. Now is a time to rebuild and grow."
The 100 for 100 program from American Express similarly focuses on mentoring and business networks, providing 100 Black women entrepreneurs with 100 days of access to resources alongside financial support. Another recently launched funding and mentorship program from The BOSS Network and software firm Sage Group also includes a suite of resources as well as cash grants. The BOSS Network, which stands for "bringing out successful sisters," was founded in 2009 and has since grown into one of the top online networks for professional and entrepreneurial women to support each other. The grant program with Sage includes mentorship through the online community, as well as other resources like complimentary Sage Business Cloud Accounting software, alongside cash.
This "yes, and..." approach of capital plus mentorship matches what Black women entrepreneurs say they need. “It is not about you tapping in to save me,” Caroline Wanga, CEO of Essence Communications, recently told Fortune. “We got that. We’ve been doing this for a while. The reality is there’s a couple doors that you have the key to — and what you want to do is unlock it."
The Mastercard contest will award one national winner per month for the rest of the year. City-specific grant opportunities for Black women small business owners will also be "launching shortly" in select cities including Atlanta, Los Angeles and New York, the company said.
Image credit: RODNAE Productions/Pexels
Mary Mazzoni is the senior editor of TriplePundit and director of TriplePundit's Brand Studio. She is based in Philadelphia and loves to travel, spend time outdoors and experiment with vegetarian recipes in the kitchen. Along with TriplePundit, her recent work can be found in Conscious Company and VICE’s Motherboard.