Transforming the shape of the corporate world means change at every level — and that includes buying. Supporting women- and people of color (POC)-owned businesses makes our communities stronger and promotes equality. With the U.S. Census finding that only 38.2% of businesses are owned by women and by people of color, the support of a large organization can make or break their success and determine the positive impact that they’re able to have.
The Issue: Lack of Funding
Women- and POC-owned businesses are less likely to receive venture capital funding compared with their counterparts. According to a study by Crunchbase, the percentage of venture capital funding received by women business owners fell from 2.8% to 2.3% in 2019. Additionally, Black and Latinx business owners received just 2.6% of venture capital funding in 2020. If VC funding isn’t an option, how do these businesses flourish?
The answer is, by relying mostly on consumers to keep their doors open. Because most VC funding is provided to Caucasian men, buying with these businesses not only keeps them up and running, but also provides jobs for women and minorities.
Major brands and personalities are already advocating for more support and bringing the lack of funding that these businesses face into the public eye. Tennis legend Serena Williams, a recent guest at NEW’s 2021 Leadership Summit, created an early-stage venture capital fund, Serena Ventures, and has provided funding for women- and minority-owned businesses. The organization has funded more than 50 companies in a multitude of industries.
Music superstars Rihanna and H.E.R. have provided funding for Partake Foods, a vegan cookie company owned by Denise Woodard. According to Forbes, “Woodard is the first woman of color to raise $1 million for a food startup, and her business is scaling quickly.” Additionally, designer Tory Burch has created the Tory Burch Foundation to help female entrepreneurs succeed. The foundation has already granted roughly $25 million to woman-owned startups.
The Benefits Are Clear
Businesses built by underrepresented groups offer unique goods and services created from fresh perspectives. Supporting women and POC-owned businesses means so much more than a unique business opportunity, however — it means doing the right thing, and building a thriving network of diverse businesses around the country that offer fresh opportunities to these communities.