When an entrepreneur of color begins the groundwork for a new business, what help is there to lift them up? At our July 15 Newsroom 515 event, four panelists described how these entrepreneurs face barriers to funding and the leadership table while building their own network of community support. 

“How are we able to encourage and inspire those who may ultimately uplift their community by pursuing something that their community doesn’t have any connectivity to?” asked panelist Pernell Cezar Jr., co-founder of BLK & Bold. 

Free access to the recording of the full panel is available online at www.businessrecord.com/video. 

Here are a few notes brought by our panelists: Nancy Mwirotsi, tech entrepreneur and Pi515 founder; Lori Hackney, economic development specialist for the Iowa District of the U.S. Small Business Administration; John Martin, owner of TeamStrong Inc.; and Pernell Cezar Jr., co-founder of BLK & Bold. Dwana Bradley, editor-in-chief of The Urban Experience Magazine, joined as guest moderator. 

Funding

Mwirotsi didn’t start out intending to found a nonprofit, and had to learn as she went along with the initial intent to collect used computers for students. 

“I had to learn how to write grants, and got rejected like crazy,” she said. “Tokenism in funding — you see one person of color, and that’s who you fund. That’s who everybody else funds, and nobody is going outside of that and saying, ‘Maybe I could fund four or five other ideas from other people of color.’ … I’m not saying they’re not doing great work, I’m saying we all need to be included because we’re all doing different things.

“Especially female founders; female founders are rarely funded, and that’s another issue that we rarely talk about — even our Latino brothers and Asian friends. Funding is very challenging, and I hope it gets better,” she added.

BLK & Bold founders bootstrapped the company until its national retail launch in Target, as financiers kept denying the company funding for growth, Cezar said. 

“The individuals I engaged with were experts in banking and experts in underwriting — not so much in retail distribution,” Cezar said. “They saw the business was risky because it didn’t fall in line with conventional businesses that were understood. That, by default, becomes personal to Black entrepreneurs who are unicorns in their own right with the amount of support and resources an under-resourced community pours into these people to get them to these levels.

“For someone who has a seat at the table already to not understand. … To me, that is one of the biggest disconnects between traditional, systemic infrastructure and the lack of financing. They don’t understand, they haven’t had the opportunity to understand these core consumers and founders of color, Black founders,” Cezar said. 

Lack of knowledge

Iowa has low levels of financial literacy training to assist future entrepreneurs before they have a business on the line, said Hackney. 

“We know, when we look at the numbers of SBA lending and we see the minority numbers are low,” Hackney said. “Financial literacy is a big piece of it, but the lending community has to step up as well.”

Said Martin: “It almost seems to be that a lot of these resources are about who you know. Especially in a smaller community as Des Moines and the other cities that we work in, you sit down with some of the entrepreneurs of color and they don’t know any names that are in positions that carry the funding. There’s a lot of personal relationships that need to be established.” 

With many of his clients, Martin finds that they need assistance in business basics before he can help them address the marketing needs they reach out to him for. 

“A lot of people are just not ready to establish their business. … We’re finding a lot of people need that basic [business] knowledge. Before we even provide marketing, we’re providing basic business know-how,” he said. 

Rejection

Very few Black business owners are represented in the coffee industry, where Cezar and his co-founder, Rod Johnson, have established a national presence through distribution at Target. Cezar has talked with other leaders of Black-owned packaged goods brands that have been stereotyped in business meetings.

“I was told by a natural beauty brand that in a meeting with a retailer [they heard], ‘What do we want to do with the hip-hop brand?’ The brand has nothing to do with hip-hop, but the perception of who was represented in the Black community created an immediate barrier to the opportunity of sitting at the table,” Cezar said. 

“We still deal with a lot of rejections when we put a proposal together. We’re told, ‘No, maybe you should pass it to someone else,’ ” Mwirotsi said. 

Mwirotsi recalled another STEM education initiative telling her they had $300,000 dedicated to their initiative, which is no longer in existence. 

“I was saying, ‘If you could just give me $50,000, that’s all I need,’ ” Mwirotsi said. 

Mwirotsi’s break into the community came at the time through the closing of Startup City, which introduced her to now-longtime supporters of Pi515. 

“If Startup City had not stepped up and said, ‘We believe in you,’ if [a friend] had not stepped up and said, ‘We believe in you,’ I would have given up. There were no resources at all, but knowing these people have allowed me to build a community with people who are helping me learn. I have to keep learning every day,” she said. 

Mwirotsi’s experience as a female founder of color is not unique, Hackney said. The Iowa SBA and other entities should support relationships between upcoming entrepreneurs and the gatekeepers of funding to grow these businesses. 

“I’ve talked to a lot of women-owned businesses where they’ve got the double-edged sword. They’ve got the gender bias and they’ve got the color bias,” Hackney said. “There’s a disconnect between the banking relationships where we’ve got to figure out, how can we strengthen them to bring them all to the table to assist more minorities?”