Diversity & Inclusion
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Lack of capital and trust in mainstream institutions are common obstacles for Black entrepreneurs

"You could be a modern-day Booker T. Washington": During a discussion hosted by Innovation Works, Pittsburgh business leaders examined how Black entrepreneurs can be better supported.

Speakers at Innovation Works' Cafe IW: Elevate, Celebrate, and Inspire event. (Photo by Atiya Irvin-Mitchell)
What barriers keep aspiring Black entrepreneurs from entering the business world? What resources for entrepreneurship exist in Pittsburgh? And why focus on Black-owned businesses amid broader diversity efforts?

In a city that’s among US metros with the lowest rates of Black-owned businesses, and against a national backdrop of limited investment into Black-owned companies, local founders and entrepreneurship experts tried to answer these questions at a recent panel discussion hosted by Innovation Works. Above all, these pros said, they need funding and mentorship to thrive.

BEAM Collaborative cofounder and CEO Joel Burstein made the distinction between efforts to support Black-owned business as opposed to diversity efforts as a whole. BEAM Collaborative surveyed 150 businesses in 13 different cities and came to the conclusion that even in larger conversations about diversity, not focusing specifically on Black entrepreneurs often led to them being forgotten.

“We’re not suggesting that the others don’t matter,” Burstein said, referring to founders of color. “We’re just suggesting that  Black businesses need their own set of strategies, thoughts, and differentiation in order to grow [because] we have a different problem, a very dire problem.”

Missed opportunities to connect to resources

Vernard Alexander, the executive director of E3 Alliance of Pittsburgh at Riverside Center for Innovation, described barriers he’d faced on his professional journey, explaining that many of the entrepreneurship support organizations in Pittsburgh have few, if any Black people working at them. That matters because it could prevent Black entrepreneurs from believing a program could help them.

Trust could be a major issue preventing Black entrepreneurs from reaching out to a support org, he said. Whether it comes from feeling a sense of erasure or past negative experiences, it can lead to missed opportunities.

“I know plenty of Black million-dollar-revenue-generating businesses that have never been through an entrepreneur program and have probably have never heard of it,” Alexander said. “They don’t trust most of the local organizations, just from past experience of not having access to capital and not getting help at different entrepreneurship organizations that they were referred to.”

Since joining the E3 Alliance of Pittsburgh, he’s tried to make it a point to make referrals to Black entrepreneurs and reassure them of the organizations’ credibility.

Hiring with a DEI lens

How to change what many of those entrepreneurship-supporting organizations look like? EARN Staffing Solutions Senior Managing Director Dawnn Clisby said that it’s important to advocate for diverse candidates. It’s important for the people doing the hiring to look deeper than just checking a box, she said — or else risk losing the talent you’ve hired in the long run.

“What I try to do is challenge the organization to dig down and ask the why, who, what, where, when, what is your strategy as far as a framework around diversity, equity, inclusion?” Clisby said. “And if they don’t have a framework in place, we’d like to work with them to put that in place.”

She pointed to her own organization as an example. Through her staffing firm, she makes it a point to support Black entrepreneurs in the community directly, and to work with nonprofits with similar goals. Convincing employers to look more closely at individuals who might not have every qualification, but who could obtain those missing qualifications on the job, for instance, can go a long way toward making a workplace more inclusive.

“I think by doing that, through the appointment process, we are elevating them and showing that they are just as competent and talented as anyone else,” Clisby said.

Supporting the community by supporting Black-owned businesses

Recalling when he and his son were pitching Toyz Electronics, CEO Damola Idowu said he feels lucky to have obtained funding because raising capital can be a struggle for Black entrepreneurs, no matter how good their idea might be.

Burstein noted a United States Conference of Mayors report finding that when Black entrepreneurs start businesses, they tend to be in industries with low barriers to entry, like real estate, retail and ecommerce. This isn’t due to a lack of interest in other areas, Burstein said, but due to a lack of capital or the connections their businesses would need to thrive.

“We’ve seen people with chemical engineering degrees from major universities that weren’t able to survive in the chemical engineering space, and ended up starting restaurants and then struggling through a very low-margin business,” Burstein said. “Quite frankly, we need chemical engineers to start businesses, but they don’t even know [how to do so]. They’ve never had good mentorship.”

Idowu encouraged those in attendance to see Black entrepreneurship not as something that only benefits the individual, but as something good for the community as a whole. In the way that Black intellectuals did in the 1900s through institutions such as the Tuskegee Normal and Industrial Institute and the National Negro Business League, he said, successful Black entrepreneurs, could go on to share what they’ve learned to help others on their own journeys.

“You could be a modern-day Booker T. Washington,” Alexander said. “All you need to do is find your current income partner to be able to educate descendants of formerly enslaved people to be able to come up that ladder with entrepreneurship, education.”

Atiya Irvin-Mitchell is a 2022-2024 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Heinz Endowments.
Companies: Innovation Works (Pittsburgh)

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