Today, 44% of new entrepreneurs are people of color, including 24% Latinx (Latino or Latina), 9% African American, and almost 8% Asian. The fastest-growing subset of entrepreneurs are African American. Plus, ethnically diverse companies are 35% more likely to financially outperform companies with little diversity.
And yet due to structural racism, resources primarily flow to white entrepreneurs. According to the Minority Business Development Agency, minority firms are denied loans three times as often as as non-minority firms, and they’re charged higher interest rates and receive smaller loans.
Racial and ethnic minorities are also underrepresented in investment funding. Of startups that receive venture capital, only 12% have Asian founders, 1% have African American founders, and less than 1% have Latinx founders. It’s even worse for women of color, who receive 0.2% of VC funding. You read that right--less than one percent.
The good news is that there are certifications, loans, conferences, membership associations, and investor networks specifically devoted to minority business owners. With their help, your startup can get the resources it needs to thrive. Here are 25 resources to help you build and sustain a successful business:
Minority Certifications for Loans, Contracts, and Mentoring
If your company is at least 51% owned by someone who’s “socially and economically disadvantaged”--if you face racial or ethnic prejudice--you can become 8(a) certified by the Small Business Administration. That gives you first access to government contracts, as well as SBA loans and mentoring. But it can take up to a year to be certified, and certification expires after nine years. 8(a) certified business owners say it’s wise to wait to get certified until after you’ve networked and become established, so as soon as you’re certified, you can pursue contracts.
The National Minority Supplier Development Council also certifies companies as MBEs, Minority Business Enterprises, if they are at least 51% owned by Asian, African American, Latinx, or Native American entrepreneurs. The Council also hosts conferences and networking events.
Advice, Articles, and Support
For free business advice, the Minority Business Development Agency has business centers across the country where you can ask experts about securing capital and other business questions. The websites BlackEnterprise.com and AsianEntrepreneur.org have business articles and resources. Making It TV with Nelson Davis has videos online with entrepreneurs and business experts, many of them people of color.
The SBA’s Office of Native American Affairs provides free help such as mentoring, trainings, webinars, and more. ONABEN offers training and support to Native American, Hawaiian Native, and Native Alaskan entrepreneurs. Digital Undivided is a startup incubator that provides training, networking, and funding to female entrepreneurs who are African American or Latinx.
Entrepreneur Associations & Networking
The Minority Chamber of Commerce is a membership group that hosts educational programs and networking events. The investment group 500 Startups hosts an annual diversity summit to discuss inclusion in tech, including access to capital. The nonprofit Black Founders hosts networking and other events for black technology entrepreneurs. There’s also Bringing Out Successful Sisters, aka the BOSS Network, an organization for African American female entrepreneurs. And the Latino Startup Alliance is a network of Latinx entrepreneurs and investors based in Silicon Valley.
The Hillman Accelerator is an Ohio-based program that connects underrepresented individuals in tech with venture capital. Minority Venture Partners is an accelerator that also invests in tech innovators from disadvantaged communities. Manos Accelerator provides education, resources, and funding to Latinx entrepreneurs in tech. PowerMoves offers both an accelerator and an early-stage bootcamp to entrepreneurs of color, including investment funding. DivInc calls itself a “pre-accelerator” supporting diversity in tech startups.
Loans for Minority-Owned Businesses
The Business Consortium Fund offers business loans to certified minority-owned businesses. The National African-American Small Business Loan Fund launched in 2015 and loans funds to African American entrepreneurs. Accion provides small business loans to minorities as well as veterans, women, and other marginalized groups.
NewMe is a minority-focused firm in Silicon Valley that operates a startup accelerator and helps minority entrepreneurs get funding. Black Founders, a nonprofit mentioned earlier, connects entrepreneurs with investors through the platform Gust.
The Techstars Foundation provides grants, scholarships, and sponsorships to racially and ethnically diverse startup founders. The First Nations Development Institute provides grants to Native American, Alaska Native, and Native Hawaiian entrepreneurs. They’ve provided nearly $30 million in grants since 1993.
To wrap up, did you know that Jerry Yang, the co-founder of Yahoo, is Taiwanese? Alberto Pérez, one of the co-founders of Zumba, is Colombian. And the founders of Panda Express, Andrew and Peggy Cherng, are Chinese immigrants. America’s startup entrepreneurs should reflect the diversity of our population. After all, by 2044, racial and ethnic minorities will become the majority in the U.S. Ideally, resources for entrepreneurs of color will continue to grow as well.
Brent Butler is Masterplans’ founder and CEO.