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‘We Can Create Products and Services That Everyone Uses’: Black Founders Discuss Challenges and Misconceptions at Morgan Stanley Event

Black founders are tired of being overlooked and misunderstood. Some voice their challenges and concerns during a panel discussion hosted by investment bank and financial services giant Morgan Stanley. The recent panel discussion for Black founders was entitled “A Founder’s Journey: Lessons in Resilience, Vision and Innovation” as part of the company’s  Multicultural Innovation Lab (MCIL). 

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B.J. Wiley Williams, founder and CEO of wellness rewards platform SoHookd (photo from https://ihf.cornell.edu/who-we-are/industry-scholars/b-j-wiley-williams/)

Uphill Battle of Raising Capital

The founders spoke of the difficulty they still face in raising capital.

“Raising capital is hard for anyone. And for founders of color and women, it can seem impossible at times,” noted Dennis Cail, CEO and co-founder of Zirtue, a relationship-based lending app that simplifies loans with automatic ACH loan payments between friends and family members. 

“You could be a capable, qualified entrepreneur with a great business and a great business model. But when you have firms, especially at the VC level, that aren’t used to investing in founders of color and women, you have an extra hurdle that you have to get over,” he continued.

According to Cail, entrepreneurs should have a solution-finding mindset.

“I think like most entrepreneurs, you just get up every day and figure out, ‘How can I make this happen with the resources that I have?’ Instead of focusing on the resources that I didn’t have, I focused on the ones that I did, and I made those my superpower,” he said.

Seeing Some Improvements in Funding Opportunities

Although just 1.2 percent of the record $137 billion invested in U.S. startups in the first half of 2021 went to Black entrepreneurs, B.J. Wiley Williams, founder and CEO of wellness rewards platform SoHookd, says there’s been an uptick. 

“I’d say that you’re seeing more funds being explicitly allocated to Black … founders,” said Williams. “It hasn’t fully trickled down to startups in terms of getting more access to capital, but in time, that will change. Corporations are also being more conscientious about spending their money with Black founders, and we’ve definitely benefited from that.”

VC Dollars Still Lag

The fact that Black people make up 14, 15 percent of the population and yet receive less than one percent of VC dollars — that’s a data point that everyone can rally around. And you have enough people that are smart enough in this sector to solve for that,” noted Cail. “It will come down to how intentionally these institutional dollars are being invested. And then you’ll start to see the real change happen.”

Can Entrepreneurship Play Role in Generating Black Wealth?

According to the founders, entrepreneurship is vital in creating Black wealth.

“Oh, it’s transformative,” said Cail. “We know that one of the biggest transfers of wealth happens when a founder has that liquidity moment. And the fact is, the majority of Black people are being left out of that.”

He added, “Yes, you can go work for a company for 20 or 30 years and have a 401(k) with a matching plan and save a nice little nest egg. But that’s not going to create legacy money for your family.”

According to Williams, entrepreneurship allows for the expansion of wealth in a community.

“What’s powerful about entrepreneurship is that you have the ability to not only build equity that can multiply at a much faster rate than a salary, but you also have the ability to hire staff, hire vendors. The more successful you are, the more that you’re creating wealth for others like you,” said Williams.

What Should the Investor Community Know about Black Founders

Black founders on the panel said they feel they are often misunderstood by investors who depend on misrepresentations about the scope of products and services they can offer.

“The misconception that if you’re a Black founder, you must be creating a product or service only for the Black community. We can create products and services that everyone uses,” explained Tiffanie K. Stanard, founder, and CEO of Stimulus, a relationship intelligence SaaS platform that uses data and analytics to simplify how companies make purchasing decisions. 

Read: “Black Founders Reflect on the Present and Future of Black Entrepreneurship”

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