Phase 1: Learning / Community Building - Needs Assessment
Background
This is a once in a lifetime opportunity to address the equity and economic needs of residents in Prichard Alabama and Mobile County by supporting Black Entrepreneurship.
Our goal is to remove the systemic barriers that Black companies face in getting loans, grants and business support. We intend to build a local business and entrepreneurial ecosystem in partnership with Commonwealth Bank, Prichard Housing Authority, Mobile County, United Nations, RUNWAY and others along with business support from Uptima to grow the entrepreneurial ecosystem around Black founders.
This diverse set of groups will provide an interlocking set of interests focused on building the capacity of those most at need to receive financial assistance, access to capital, contracting and procurement assistance, marketing, operations and business development, export and industry specific training and other technical assistance to aid in the development, stabilization, and expansion for small businesses and entrepreneurs. Undergirding the effort is the use of the area’s uniquely dynamic history, geography, and cultural diversity.
The project also includes the development of a state of the art center for business development to be located in downtown Prichard, Alabama. The site will serve as the location for trainings, local retail space and business resources.
Our goal is to build a world class ecosystem that supports Black founders in our community and the southern region to get the guidance they need to grow their companies, access financing at every step of the companies journey and gain more sales with an emphasis on exporting their goods and establishing trade throughout the Diaspora.
The history of Africatown as the last illegal cargo makes the story of reclaiming our relationship to trade and business a powerful one that can both heal and transform the community. Our highest vision is that the Africatown Region= becomes a destination for shopping, dining and engaging with Black companies that is centered on healing and economic repair for generations to come.
About the Report
Black entrepreneurs are less likely to be approved for small business loans, and when they are approved, receive lower amounts at higher interest rates.
The challenges accessing capital are even greater for Black business owners. These individuals are unusually constrained by undercapitalization and lack access to traditional advisor and investor networks. Because Black people, and people of color more broadly, have suffered decades of systematic discrimination, they have less wealth compared to white peers. This disparity leads to a “friends and family” gap in funding. While many white entrepreneurs can rely on their own networks for seed funding and funding to scale, Black entrepreneurs are unable to do so. And therefore, in a vicious cycle, they also have less collateral to use as guarantees for loans.
As a result, Black entrepreneurs are less likely to be approved for small business loans, and when they are approved, receive lower amounts at higher interest rates compared to their white counterparts. While at least 77 percent of venture capital is invested in white men, only 1 percent of venture-backed founders are Black. However, data has shown that, for most asset classes, firms managed by people of color exhibit returns that are not significantly different than those of white-managed firms.
Needs Assessment
The needs assessment is a report that will collect data from the following methods : interviews and roundtable discussion about business needs in both the start up (0-5 yrs) and established (5+ years) spaces. The assessment will also survey the field of service providers and their offerings as well as a scan of financial support available for Black companies in the area. The report will also give a view of our strengths and limitations as well as key relationships that will make the program a success. The report will conclude with key findings and recommendations.
About the Author
Jessica Norwood is the Founder of RUNWAY. RUNWAY is a financial innovation firm that invests in entrepreneurship as a strategy to close the wealth gap in Black communities for good. RUNWAY provides pre-seed, friends and family capital, or what Jessica calls “Believe-in-You Money " to fund Black-owned companies. Jessica is a financial activist and social entrepreneur who was awarded the Nathan Cummings Foundation Fellowship for Economic Disruption. She is a Center for Economic Democracy fellow and was an inaugural fellow in the RSF Social Finance Integrated Capital Fellowship. Jessica speaks at the intersection of Black culture and investing, power building through community investing and African American wealth creation. Featured in Essence Magazine, NPR, Next City, and Fast Company, Jessica is lifelong Fellow of the Sanford School of Public Policy at Duke University and Southern University College of Business, as well as the Political Power Fellow of the Hip Hop Archive at the Hutchinson Institute of Harvard University. And NY Times Best Selling author Edgar Villanova of “Decolonizing Wealth” calls Jessica’s work the “medicine” modern philanthropy and investment need. Jessica is also the co-host of Road to Repair, a podcast exploring our journey out of a business-as-usual economy toward justice, healing and liberation.
sources cited:
https://www.kauffman.org/wp-content/uploads/2019/12/CapitalReport_042519.pdf