Building a business is hard; about 50% of businesses fail in the first five years. The early years of an entrepreneur’s journey can be difficult and lonely. When starting my digital services firm Fearless, I convinced my wife to rent out our home and move in with my mother so we could have an extra income while I built Fearless in my mother’s basement.
That was 10 years ago — Fearless now has over 115 employees. That story of struggling to build a tech company and working out of a basement or garage until you “make it” is pretty common, but the barriers facing Black entrepreneurs make it harder to find success and support. Research by the University of California, Santa Cruz states that minority-owned startups have access to less capital than their white counterparts. The right investors can offer more than just funding to early-stage companies; the connections those in the venture capitalist world have can bring an entrepreneur the new business, mentorship and employees needed to grow. Venture capital firms like Harlem Capital and Black Angel Tech Fund are focused on changing the faces of entrepreneurship by diversifying their portfolio, but traditional venture capitalist funding is not the only way to grow your business. There are other avenues and opportunities to get the support, financial and otherwise, to help build a successful company: Equity crowdfunding: Similar to crowdfunding campaigns like GoFundMe or Kickstarter, equity crowdfunding allows nontraditional investors to support businesses and receive equity. Enabled through Title III of the 2012 JOBS Act’s Regulation CF, equity crowdfunding allows all companies to sell securities, whether in the form of equity in the company, debt, revenue shares, convertible notes and more. Equity crowdfunding platforms include WeFunder and LocalStake. Mentor programs: Fearless was lucky enough to be accepted into the DoD Mentor-Protégé program early in our growth. As the oldest continuously operating federal mentor-protégé program in existence, the DoD program helped us establish and expand our footprint in the federal government contracting space. NewMe and Black Girl Ventures are two programs that specialize in mentorship for early-stage companies. Become 8(a) certified: The federal government has a goal of awarding at least 5% of all federal contracting dollars to small, disadvantaged businesses each year. These businesses fall under the 8(a) classification. To qualify for the program, you must be a small business with 51% of ownership and control from U.S. citizens who are economically and socially disadvantaged and the owner’s adjusted gross income for three years is $250,000 or less. The full definition of what counts as being economically and socially disadvantaged can be found in Title 13 Part 124 of the Code of Federal Regulations. Fearless has been classified as an 8(a) company for several years and we have been able to secure several contracts through the certification. Tap into Small Business Administration resources: More than a million users visit SBA.gov to utilize tools like the SBA Business Guide and Lender Match site. By using the SBA website and reaching out to your local SBA office, you can make full use of the programs available and connect with business owners who can offer advice and mentorship. Identify supportive bankers: Your business is your top priority and the people you engage with should view your company as a priority too. You need someone vested in your success who will advocate for you when you need them. If you meet with a banker and get a sense that you would be an account number instead of a person, then find another one. If you don’t have your banker’s personal cell phone number, and they aren’t willing to visit you at your business, then take a pass and find a true partner who supports you.