Diversity & Inclusion
DEI / Delaware / Entrepreneurs / Funding / POC in Tech

What will it take to bring true racial equity to entrepreneurship to Wilmington?

Twelve weeks, 12 Black and Latinx business owners' stories. Here's what we learned from our Wilmington Alliance partnership series.

Seeking Equity in Wilmington interviewees. (Courtesy photos; image by Holly Quinn via Canva)

This article appears in a series on minority entrepreneurship and is underwritten by the Wilmington Alliance. It was independently reported and not reviewed by Wilmington Alliance before publication.

Technical.ly’s Seeking Equity in Wilmington, a 12-week series underwritten by the Wilmington Alliance, launched on June 16. That was just two weeks after the Memorial Day murder of George Floyd, and in the middle of the biggest civil rights uprising in the U.S. since 1968.

The timing was right, but it was coincidental: The project had been in the works since late 2019. It was initially planned to start in March, but with the COVID-19 lockdown causing disruption in all aspects of life, it was postponed. We didn’t want the stories to get buried under the pandemic news.

We didn’t know the rescheduled start would fall during such an intensely raw time for Wilmington’s Black communities. Nor did we know that in June, white people, organizations and corporations would, en masse, be about as willing to listen to what Black people had to say as they ever have been in the nation’s history.

The early interviews, especially, were at times emotional. Metaphorical masks had come off. I don’t know how these interviews would have looked if May 25, 2020, never happened, but having conducted interviews with all kinds of business owners over the years, I feel pretty confident that they would not have been so candid. The focus may have been more on program issues and resources and less on the systemic racism that is really making programs and resources less effective than they should be.

The systemic nature of inequity been right out in the open with the distribution of federal Paycheck Protection Program funds. By design, the program focused on the most traditional business owners, those with robust business relationships with the banks, multiple employees and brick-and-mortar locations or offices.

How many Black business owners received PPP? According to Forbes, about 5%. The Seeking Equity in Wilmington series, though by no means a study of PPP funding, supported the Forbes findings. Only one business, NERDiT NOW, received PPP, via its nonprofit the NERDiT Foundation; the business itself was rejected. The amount it did receive was shockingly low — $5,000 — while other white-owned small businesses received upwards of $150,000.

Funding — whether it's emergency funding or business capital — is only part of the story.

Another, GreenBox Kitchen, was waiting for PPP funds in an amount that hadn’t been disclosed to them at the time of my interview with cofounder Jason Aviles. The other 10 Black and Latinx-owned businesses in the series received no PPP funds, with most not even eligible to apply.

Meanwhile, PPP funding, meant for small business owners, went to big companies, and fraud has run rampant, with fake companies getting approval, some companies receiving two big checks when they were entitled to one, and even suburban homeowners profiting by pretending to be farmers.

Who was paying for all that in the end? It’s pretty hard to look at a 95% PPP rejection/ineligibility rate for Black business owners and honestly think this is not an easy-to-process example of systemic racism.

One of the reasons Black and Latinx business owners had such a hard time with PPP is that many simply do not have relationships with the banks. We heard, repeatedly, about Black and brown business owners being turned away for loans or given unfair deals, such as Levitea’s Tynisha Lomax, who received a bank loan — but only in the exact amount of what she already had to secure it.

Business owners of color have often learned to do it without bank loans, whether by launching a business while working full time, like The Sold Firm owner Nataki Oliver and Lafate Gallery owner Eunice Lafate, focusing on grant programs and funding from investors or pitch competitions, or by crowdsourcing funds. Some, like AfroZen owner Adanna Murrell, keep costs low by running businesses on social media rather than brick-and-mortar storefronts.

These alternatives to bank loans have one natural advantage: No business loan means no business loan debt. But, in the case of PPP, no business loans meant no established relationship with a bank that knows and trusts you enough to approve a fat federal loan that never has to be repaid if you play ball (which, all things considered, may or may not mean playing by the rules).

But funding — whether it’s emergency funding or business capital — is only part of the story.

The uneven playing field

At the core of most equity discussions is the notion that we have to “even the playing field.” For many, that means putting money into (often white-designed) programs. For a lot of Black- and brown-owned business, what it means to them is equal opportunity in the most literal, non-jargon sense. Businesses don’t thrive on programs to help businesses thrive. They thrive on business. Contracts. Referrals. For many of the businesses we talked to, these things were notably lacking — even if they were celebrated for their work.

Markevis Gideon, cofounder of NERDiT NOW, was in his third month of refurbishing and distributing laptop computers for free to households that needed them for school and work through the NERDiT Foundation when I interviewed him in June. The project — made possible by funding from Discover Bank — garnered NerdIT quite a bit of much-deserved publicity. Everyone was talking about how the small computer repair business with a storefront in Newport was giving away computers to kids in need. They were lauded.

That did not, however, translate into customers and contracts. It was if NERDiT’s efforts made people feel good, and applauding was enough.

Black creatives get lowballed, something Mädō Agency founder Linda Watson has dealt with, along with an ongoing struggle to find businesses to contract with.

Irene Castañeda, owner of Veronica’s Kitchen, was told she would probably never get a business loan, one of the most basic resources for business owners — and in fact, most of our interviewees started their businesses either with their own money, such as former corporate go-getter Akilah Bernard, founder of I am B.E.A.U.T.Y, or with pitch competition winnings, which helped launch NERDiT NOW.

GreenBox Kitchen’s Aviles came to the stark discovery that the playing field was uneven when he finally worked his way into Wilmington’s business networking circle of must-knows, and found that he was pretty much the only one who had scrapped his way to the room.

Danny DeJesus, founder of the United Tech Project, fights to give disadvantaged people access to tech education — something he himself discovered empowerment in while fighting for himself during a troubled youth spent in and out of prison.

It’s not something everyone has to fight for.

There are two Wilmingtons — two tracks that are uneven and receive access at different rates.

“With the new Delaware COVID relief grants, it was the first time we all got the information at the same time,” said Tamara Varella of the WIN Factory, at the virtual wrap dinner for the series on Sept. 10. “Usually, we’re the last to find out.”

The first to find out about opportunities, Aviles had learned, often knew someone involved in doling the opportunities out, at least by a degree or two.

Ignoring the 70%

The city of Wilmington’s Black population hovers at around 58 to 60%, with Hispanic/Latinos making up another 10%. The non-Hispanic white population of the city is about 29%.

Why, then, does the city cater disproportionately to white-owned businesses? Why are the areas of downtown that get the most focus, such as upper Market Street and the Riverfront, strikingly less Black than the neighborhoods they border?

There are lots of “rational” reasons. During weekdays, there are a lot of commuters from the predominantly white suburbs who want to work in a “nice” city that feels “comfortable” and “safe.” And they should (overuse of quibble quotes aside), but why does niceness have to mean whiteness? And when will well-meaning people realize that that attitude in itself fuels poverty, education segregation and cruelty? That it, in part, has led to the kind of environment we live in, where seemingly oblivious people have to be told, one way or another, that Black people are, in fact, people.

Several of the business owners we talked to do have businesses downtown, including GreenBox Kitchen and Milk & Honey LOMA on Market Street. Still, they are in the minority, and few of the Market Street businesses cater to the people who live in the neighborhood — especially youth.

The rent’s too high (and “revitalization” redlining)

Union Street on Wilmington’s West Side — home to old-school neighborhood businesses like the original rowhouse Capriotti’s Sandwich Shop, Kozy Korner diner, Mrs. Robino’s and Dead Presidents Pub mixed with younger neighborhood standbys like El Toro Cantina, Merengue House, El Mana and Christa-Bell’s Carribbean Cuisine — is on the cusp of a real renaissance. That is, if the rapid turnover in some of the corridor’s commercial properties over the past few years doesn’t stable itself out. Prime locations like the former Black Lab Breads and 8th Street Kitchen sit depressingly vacant, while new additions like Milk & Honey West Side inject optimism that the diverse residential neighborhood’s stretch of storefronts will live up to its potential.

What’s stopping it?

“The rent is just too high,” said Milk & Honey owner Quincy Watkins. Union Street, which serves a largely working class community, is seeing commercial rent rates that aren’t sustainable for businesses offering affordable goods and services.

Rents that are high — but still lower than tonier neighborhoods like Trolley Square and The Highlands — encourage gentrification and push out neighborhood businesses. This is nothing new, but the West Side thrives when its businesses reflect its diversity.

Revitalization doesn’t have to mean modern redlining, where the ones who get access to nearly all of the commercial real estate are the same ones who are first in line for business grants. Other neighborhoods don’t have to be ignored. Oliver’s The Sold Firm is on Tatnall Street in West Center City. She says Market Street and The Riverfront were out of reach for her and many other business owners of color — both due to cost and access. That means only a lucky few Black and Brown businesses have access to a large amount of economic development resources in a the city where they make up the majority of the population.

Competition over compensation

The WIN Factory on MLK Jr. Boulevard near the train station is a hub for Black and Brown entrepreneurs — a coworking space operated by the WIN Factory Wealth League that offers lots of resources for business owners. Cofounder Varella has been a consultant for 20 years, helping businesses and nonprofits better accommodate to clientele from disadvantaged backgrounds like her own. When she says she understands what the city’s Black communities need, she’s not kidding.

And yet, her team at the WIN Factory, including the founders of Influencers Lab Media and Futures First Gaming, is rarely paid to consult on programs designed as business resources for the city’s Black and Brown communities. Instead, they say, they are called on when the program is ready to launch to spread the word — for free.

Nonprofit organizations that at one time would have directed funds to orgs like WIN now create their own programs — direct competitors — instead. The result is less funding to Black owned resources, and programs that, Varella says, are often missing components vital to resources geared toward Black businesses.

The solution here should be doable, though it may not be popular: Instead of building competing resources, organizations without minority leadership should instead fund and/or partner with existing minority-led resources. Barring that, they should contract with minority-led orgs as consultants starting in the early planning stages.

“There goes the neighborhood”

Possibly the biggest challenge for Black and Brown businesses is plain old ingrained racism, both explicit and implicit. Our interviewees shared several examples, from racist comments from customers to neighbors assuming Black people are criminals to plain snubbing.

And let’s be real: A lot of the things business owners of color propose, including more access to commercial real estate and more corporate contracts, will only heighten expressed racism. For official agencies, it’s much easier to stick with the status quo or move extremely slowly to build a thriving Wilmington that reflects its demographics. As counterintuitive as it might be, agencies need to reprioritize which voices are heard if meaningful change is to happen.

So what is the solution?

It would be nice to be able to create a list of bullet points that will fix Wilmington’s equity in business issues, but it doesn’t work that way.

At the virtual wrap dinner for the project, we discussed where we, and specifically Wilmington Alliance, go from here. Here are a few concrete, actionable items from the discussion:

  • The federal 8(a) program connects small, minority-owned businesses to federal agencies for contract opportunities and mentoring. In a perfect world, Varella said, WIN Factory would be a hub of opportunity where business owners of color has access to a similar program locally.
  • The City should establish at least one grant specifically for Black, Latino and Indigenous businesses owners. (Most “minority” facing programs include white women in the “minority” category, which, historically has advantaged them disproportionately.)
  • Propose tax breaks associated with contracting with Black and brown businesses and enact policies that hold businesses accountable for things like diverting government funds away from Black businesses.
  • Increase and fund quality programming and education at the elementary, middle and high school level that is accessible to public school students, and build more community centers to offer them.

For Wilmington Alliance’s part, it has equity projects in the works, including a kitchen incubator and an initiative called Wilmington Made, a platform focused on marketing for local businesses that aims to connect freelancers and entrepreneurs to jobs and customers. To keep up with these projects, subscribe to our newsletter and follow Wilmington Alliance on Twitter.

Companies: Wilmington Alliance / NERDiT NOW / Technical.ly
Series: Journalism / Seeking Equity in Wilmington

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