Second in a series
To encourage more Black entrepreneurs to found businesses in Boston, we need a plan, a champion and a coalition of stakeholders. But we don’t need to reinvent the wheel; we can learn from those who have studied the problem and adopt best practices from cities that have developed successful plans, such as Miami, Atlanta, Los Angeles and Baltimore.
The Kauffman Foundation, the Knight Foundation, the National Venture Capital Association and the Kapor Center have all studied the issue extensively. James Norman, a general partner at Black Operator Ventures and a partner at Transparent Collective, has spoken and written on the topic, including the highly instructional article, “A VC’s Guide to Investing in Black Founders.” I have also previously addressed the issue in “We Must Increase the Number of Black-Founded Tech Companies in Mass. Here’s How.”
In Miami, Mayor Francis Suarez committed to building a tech mecca with a priority on equity. He’s now a fantastic ambassador for Miami’s tech and startup environment and actively recruits and welcomes new people and entities to the city to build the ecosystem. With Black Tech Week, eMerge Americas and the Knight Foundation, Miami is now home to some of the leading voices on diverse and inclusive tech/startup ecosystem building.
In Atlanta, former mayor Kasim Reed worked hard to grow such an ecosystem and ensure the inclusion of people of color. His successor, Keisha Lance Bottoms, continued those efforts. As a result, Black entrepreneurs are increasingly moving to Atlanta to start their companies, and major corporations are moving some operations there to take advantage of the diverse, tech-ready workforce. According to TechCrunch, the city is now known as “a haven for diverse founders and investors.”
Holly Beilin elaborated on the combined public and private efforts in Atlanta in a Hypepotamus article:
“Mayor Reed was directly responsible for nurturing the idea, following a tour of Silicon Valley tech hotspots, that became the corporate-backed, state-supported $18 million Engage fund to accelerate early-stage companies. And he also formed and grew the Women’s Entrepreneurship Initiative (WEI), a city-funded 18-month incubator for 15 women entrepreneurs.”
In Los Angeles, then-mayor Eric Garcetti fostered innovative collaborations aimed at increasing diversity in the local tech/startup scene. The PledgeLA coalition brought local tech leaders and venture capitalists together with the mayor’s office and the Annenberg Foundation to encourage and track diversity, equity and inclusion among LA businesses. In 2021, a task force began addressing pay inequities and raising money to help entrepreneurs of color.
And in Maryland, the Baltimore Integration Partnership issued “Collectively We Rise: The Business Case for Economic Inclusion in Baltimore” in 2018. The report makes the case for economic inclusion and highlights successful strategies employed by local businesses, educational and health care institutions, faith-based organizations and government.
Boston’s lack of a plan is causing us to miss out on investments. Large venture capital funds are opening branches and starting funds in places such as Raleigh/Durham and Atlanta with an eye toward gaining access to new opportunities with Black entrepreneurs. These venture capitalists wrongly assume that their existing Boston offices will source opportunities from Black entrepreneurs. But Jeff Bussgang, a venture capitalist investor, says this assumption might be wrong, given human bias. In “Are VCs Racist? Explaining The Capital Gap,” he cites research from the book “Blindspot: Hidden Biases of Good People” by Anthony Greenwald and Mahzarin Banaji to support his explanation. He contends that the unconscious personal bias of otherwise good people might be inhibiting them from making investments in Black-founded startups.
Given the potential for greater societal good, Boston needs a plan to address the reasons for the market friction that exists between Black entrepreneurs and potential investors. Whether that plan comes from the public or the private sector is less important than making it happen. We can’t leave the market to self-correct at its own pace when the wealth gap is increasing so rapidly.
Ed Gaskin is executive director of Greater Grove Hall Main Streets in Dorchester.
