What will it take to achieve inclusive entrepreneurship?
Since 2020, more and more companies have started integrating philanthropic programs into their business plans that support entrepreneurs in underserved communities. One of those programs is Empower by GoDaddy, which helps provide underrepresented entrepreneurs with training, tools and peer networks. The program also opens paths to funding via donations to CDFIs (community development financial institutions).
Stacy Cline, GoDaddy’s senior director of corporate sustainability, said in an Introduced interview that “inclusive entrepreneurship means that anyone — no matter their age, race, gender or socioeconomic background — should have the opportunity to pursue their independent venture, and factors like where you live shouldn’t hinder your ability to making your dreams of being your own boss or reality.”
After the killing of George Floyd in May 2020, the 50 biggest companies in the United States committed nearly $50 billion to address racial inequality – nearly 90% of it allocated for loans and investments by JPMorgan Chase and Bank of America.
A lot of companies made a one-time donation. Some companies made long-term pledges that involve components ranging from commitments to increase the number of Black and Brown hires to strengthening Black-owned businesses. Though the long-term results of those commitments (and the number of entities that followed through) aren’t yet known, the corporate pledges of 2020 saw companies, sometimes for the first time, taking on at least some amount of responsibility for corporate equity.
GoDaddy’s Empower program predates 2020, having launched in 2017. To date, it has pledged $21 million to nonprofits and CDFIs.
“We want to see more entrepreneurship. We want to see more folks starting micro and small businesses. Companies like GoDaddy, we have the benefit of having the tools, skills and expertise to reach entrepreneurs,” said Cline. “Several years back, we were seeing this trend of community partners saying they need an increase in support for technical assistance, for digital presence. We were able to take all of that expertise and apply it at a local lens to help local cities, help local communities bring more support and resources to entrepreneurs.”
While Floyd’s murder and subsequent protests made corporations at least temporarily more aware of structural racism, another major 2020 event further exposed inequality in the US, Cline noted.
“COVID really highlighted the inequities that exist in many facets of our lives, and entrepreneurship being one of them,” Cline said. “We have seen a surge in conversations about this topic. I will say that when we began this research back in 2016, we learned that for 83% of venture capital recipients, the founders had a racial composition that was entirely Caucasian. So it’s increasingly important for us to support all entrepreneurs, no matter their circumstances, by meeting these entrepreneurs where they’re at in their journey and then understanding the unique barriers that entrepreneurs face.”
One thing GoDaddy found was that US entrepreneurs started 2.8 million more microbusinesses in 2020 than they did in 2019. Black owners accounted for 26% of those new startups — an 11% jump from the previous year and the highest increase among various demographics.
“We’ve noticed that in times of financial turmoil, like the Great Recession in 2008 or the pandemic, there is a surge in people wanting to make their own way in the world,” Cline said. “I do think that the pandemic created a shift in the way that people want to work, and that they want to do something they’re passionate about.”
She added that microbusinesses, defined as businesses with five or more employees, have been shown to be resilient.
“One thing that we see is that communities that have a higher density of microbusinesses seem to recover faster from any type of recession,” Cline said. “So it is more important for us to continue investing in microbusinesses — from a corporate lens, from a policy lens — and really figuring out how we can better support individuals so that they’re able to take that step and start their own business.”
So, is supporting inclusive entrepreneurship a responsibility of corporate America?
“Corporate America is part of this, but I also think it extends beyond corporate America as well,” Cline explained. “We need the support of policymakers and of council members, who are in charge of allocating funds in their local cities, and for entrepreneurs and the people who have the power to create programs and services to support these ventures. So it really does take all of us, and it also does take at least one supporting small business. We need to continue to support small businesses and support local.”
Watch the full video here: