There's a clear lack of diversity among entrepreneurs in the United States. People of color make up 40% of the population but own just 20% of the nation's businesses with employees, according to the Brookings Institute. Women represent over half of the country, but just 33% of business owners with employees are women.
Long before Kathryn Finney created and sold her own business and became the head of a $10 million venture capital fund investing in Black and Latinx entrepreneurs, she saw the representation problem up close. Early in her career as a Yale-trained epidemiologist, Finney's passion for fashion led to a hit blog (and spinoff book), "The Budget Fashionista." But after that success, she wanted to "do something bigger."
In 2009, Finney returned to Yale to join an accelerator program for aspiring business owners. At the time, she believed it would be "a great way for me to build community, get some validation, some traction, build products, and connect with potential investors." But the experience wasn't what she expected: "People treated me as if I couldn't do that," she says.
As the only Black person and one of just a few women in the program, "people had no expectations — not just low but no expectations of me. Here I am, this overachiever … and people totally thought I couldn't do anything just because I was a woman. And Black. It was hard. It was a tough lesson."
After spending years fighting for equity for Black and Latinx entrepreneurs, Finney is taking things to the next level by investing in their companies. Genius Guild, her new $10 million venture fund, is an investment in "amazing Black founders who are building scalable companies that impact communities," she says. "We are not afraid to talk about [discrimination] in tech or in finance."
Video by Mariam Abdallah
The business Finney joined Yale's program to create was "the first beauty box for Black women" — a makeup subscription kit that would let recipients sample different products and try out new trends. But after seeing firsthand how hard it can be for women and people of color to get funding and support for their ideas, she decided to go a different route.
"I needed to sell [the beauty box business]. I had a lot of offers throughout the year — some were really large offers with really amazing people," she says. But "I wanted to think differently. I wanted to try something else."
In 2012, Finney launched her nonprofit, digitalundivided, with the aim of calling out race and gender disparities in business. The group began hosting an annual learning conference called FOCUS 100, which is a network and support system for people of color in science, tech, math, and engineering.
"I remember people saying to me, 'Oh, well, that's too niche. There's just not enough Black women in tech for people to care.' I mean, these are people saying this, like, to my face. At that point, I don't even think the tech companies were talking diversity — they literally weren't recording who even worked for them, let alone what start-ups were seeing."
Digitalundivided made its next move in 2016 with ProjectDiane, a quantitative snapshot of the state of Black and Latinx women founders. With the help of freelancing platform Upwork, ProjectDiane found there were only 84 Black women-led startups in the United States in 2016, and just 11 Black women who had raised more than $1 million for their brand.
The situation hasn't improved much. The U.S. Census Bureau recently reported that in 2018, Hispanic-owned businesses made up just 5.8% (331,625) of all businesses, despite Hispanics representing 18.1% of the U.S. population at the time. Blacks owned less than half that number, 124,551 businesses, even though they made up 13.4% of the U.S. population in 2019.
If ownership shares matched their share of the population, minorities would have 50% more businesses, Brookings says. "Racial and gender disparities in business ownership [are] continuous and long-standing," researchers wrote. "Structural exclusion that limits entrepreneurship is no less insidious than Covid-19's impact on small businesses, but because it is already a status quo that's been built up over decades, there is not the same urgency to address it."
Though it officially launched just three months ago, Finney's fund is already "headed towards being oversubscribed" in terms of the number of people investing, she says. "[It's] one of the most amazing things that I've ever done."
Finney's advice to young people in business: Use the resources you have, and if you have a valuable skill set, don't be afraid to ask for more.
Video by Courtney Stith
"The biggest opportunity for working people is that the power structure has shifted a bit. It used to be, you know, the corporations had all the say, you couldn't work from home, etc. The pandemic proved that wrong. As a worker, you now are in a position of power," she says.
"There's going to be some increases, particularly in salary and wages. There's going to be opportunities. If you are a person who has an amazing skill set," she says, use this time to go after what you deserve.
And if you're ready to strike out on your own, remember that what successful entrepreneurs usually have in common is conviction — and the ability to get the work done. "It's great to have the idea and the vision, but that doesn't mean anything if you can't execute," Finney says. "All the best entrepreneurs are great at executing. That's at the center."
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