According to the latest census data, there are over 3.12 million Black-owned enterprises in the U.S., representing 10% of all businesses. While the statistic sounds impressive, there is another side to the story. In 2022 $330 billion in startup capital was invested, but the disturbing news is that only 1.3% of that total went to Black entrepreneurs, according to Crunchbase.
Capital constraint remains a significant barrier for Black founders, who are often unable to grow and scale due to a lack of early-stage capital. The long-standing racial wealth gap, which is rooted in nearly 250 years of forced labor and economic segregation, is the reason most Black entrepreneurs do not have access to wealth through friends and family. The enormous disparity between the wealth of Black & White Americans is dramatic as shown by the media. The average White household has a net worth of $171,100, 10 times the median Black household at $17,100. (The Brookings Institute).
The Institute For Entrepreneurial Leadership (IFEL), a non-profit organization whose mission is to eradicate the systemic barriers that prevent people from historically excluded populations from being able to access the knowledge, networks, and capital required for entrepreneurial success and wealth creation, sees National Black Business Month, celebrated in August, as an opportunity for those who say they want to support Black enterprises to actually act upon that desire.
IFEL is addressing the racial wealth gap and lack of access to capital in an innovative way through The Making Of Black Angels, a movement to drive inclusion within the angel investing sector and to increase the number of Black angel investors. Angel investments are often the precursor to obtaining venture funding to help a company on the grow-scale-exit trajectory. In recent years, the amount of angel capital going to women founders has increased with an increase in the number of women angel investors. The Making of Black Angels movement believes this model works. IFEL's targeted approach provides a blueprint for expanding resources to other historically excluded populations as well.
IFEL Co-Founder and CEO Jill Johnson, the creator of Making of Black Angels, stated, “Intentional purpose and deliberate action are needed to break barriers for Black-owned businesses. Commemorative celebrations should be more than just dates on the calendar. The Black community is missing an opportunity to participate in this wealth-building asset class that opens the flow of early-stage capital to black entrepreneurs. There is no better time than now to catalyze a new generation of black investors and make a life-changing impact on Black-owned business enterprises.”
The Making of Black Angels program is made possible by generous funding from JPMorgan Chase. For more information and to become part of the movement, visit makingblackangels.org.