High incomes and excess wealth are often associated with reinvestment, whether that be through philanthropy, small business capital or other pathways. But if Pittsburgh has an inequitably wealthy population, should there be limitations on who can pursue some of those investment options?
Last month, Technical.ly released the first in a series of stories on the intersection of tech careers, race and economic mobility based on originally compiled income data. In Pittsburgh, those census numbers showed an increase of residents making annual salaries of $200,000 from 2009 to 2019. Check out the original story for more insights from the data, plus the methodology behind its collection.
But that growth, while driven by the advancement of the local tech industry, largely benefitted the city’s white residents, per the data. Our initial story looked into what those income inequities mean for the talent pipeline, small business growth and community building.
Now, we want to know: How does this income data relate to local venture capital trends? To answer that question, we sought the perspective of Kelauni Jasmyn, founder and CEO of Black Tech Nation and general partner of Black Tech Nation Ventures.
One of the reasons behind choosing $200,000 as the minimum annual salary for a high earner in this data set was because that amount was seen as enough to allow room for investment back into the community — in other words, the excess money from those high salaries is potential capital for startups. The figure also aligns with the SEC’s current regulation on who can become an accredited investor. That’s important, because accredited investors are the preferred source of funding for private companies and other entities, and in fact, there is often a limit on the number of non-accredited investors a company can take money from.
But Jasmyn takes issue with that.
“Why does there have to be an income benchmark on who can invest?” she asked.
The premise of the number, as described by the SEC, is that people with a high income or net worth are considered to have enough “financial sophistication” to take the risk of investment in a company. Jasmyn argues that logic doesn’t make sense, since other forms of risky investments are widely available to lower-income communities through purchases like lottery tickets. Setting that limitation, she said, ensures that the choice of which companies get funded to grow will remain with the wealthiest people and therefore continue to promote the systemic inequities of the industry. That’s something Meter Feeder founder and CEO Jim Gibbs noted, too, in the first story of Technical.ly’s income data series.
Part of the problem, Jasmyn said, is in policies like the SEC’s that limit certain investment options to the wealthiest people. (One less limited option: Newly relaxed SEC crowdfunding regulations allow anyone with at least $100 to spare to invest in a startup via platforms like Wefundr, along with equity that can lead to gains or losses, depending on the startup’s success.) But another side of it is the lack of awareness in some communities of the possibilities that tech affords, in both potential investment returns and lucrative career pathways.
Jasmyn herself is a graduate of the first class of local coding bootcamp Academy PGH, and her first job out of the program paid far more than she first expected.
“I had no idea it was possible to make close to a six-figure salary at an entry-level job in tech,” she said, adding that she now works to bring awareness of that potential to her community through Black Tech Nation.
But that awareness should extend beyond just salaries and career pathways, Jasmyn said, and reach into Pittsburgh itself finding ways to more broadly promote local successes and having faith in taking risks on young companies here. This, she continued, might help reverse the lag in venture capital so far this year: “I don’t want Pittsburgh to be as cutthroat as Silicon Valley, but I want us to be unafraid of taking some risks.”.
Though Jasmyn is frustrated with how many conversations there have been around these issues and how little action there’s been in response, she remains hopeful in the younger generation of Pittsburghers who want to “lift others up with them.”
“Young and change mean the same thing to me,” she said, noting that more and more often, she’s not the only one asking questions about the basis of assumptions behind regulations like the SEC’s.
Once that policy and awareness finally progress to a place where can benefit everyone, Jasmyn knows others will easily see the great potential of Pittsburgh that she’s seen all along.
Sophie Burkholder is a 2021-2022 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.