National Black Business Month has been a success and Black entrepreneurs are growing every day, but there is still work to be done according to Andre Swanston.
“I would say the biggest hurdle is still access to capital,” Swanston said. Told BLACK CORPORATE.
“There have been many systemic barriers that have made it difficult for black communities to retain and pass on wealth, so whether it’s starting a hair salon or a tech business, these businesses are often created through to family money. The black community is always behind on these things because in many cases we are only four or five generations out of slavery, Jim Crow.
Swanston, who grew up in the Bronx before moving to Connecticut, has extensive experience in private wealth management and investing, including at JP Morgan and Ameriprise Financial. In 2013, he launched his own tech startup, TruOptikwhich he ran for seven years before selling it to TransUnion in 2020.
He added that two other issues that still hold back black businesses are the banking sector, which provides loans to black citizens at a much lower rate than other races, and access to venture capital, of which less than 3% go to black entrepreneurs. Moreover, only 2.4% of American businesses are black-owned.
“It’s not entrepreneurship, it’s not intelligence, it’s not work ethic but it’s access to capital in all capital assets.
In the aftermath of the Black Lives Matter movement, multiple reports have indicated that black businesses across the United States are booming and black businesses are thriving, but according to Swanston, that doesn’t mean the companies are keeping their promises.
“Companies love to show how much they care about equity and inclusion of diversity, access to capital and other resources, but if you look at the percentage of capital that went to black businesses are worse than before the pandemic,” The University of Connecticut graduate said, “So what you have is a lot of talk, but very little concrete success to show for.”
Swanston added Black businesses and entrepreneurs cannot rely on others to help them and if you look at the results of when black people have access to capital and resources, they are as successful or more successful than anyone else.
Swanston and his wife have invested millions in black and Latino entrepreneurs and businesses, which he says is not just a duty but a responsibility for successful black citizens who are able to do so.
A litany of notable black celebrities, including an actress Keshia Knight Pulliamthe musicians Jay Z, Rihanna and Pharell Williamsformer NFL Safety Malcolm Jenkins, and tennis stars Serena Williams and Naomi Osaka launched venture capital funds designed to help black and minority businesses access capital technology resources and more.
“I think rich black people putting in more capital and venture capital funds are extremely helpful,” Swanston told Black Enterprise. “First, from a capital perspective, and second, the recognition or attention these companies get by being associated with these successful people can be a shock to black businesses.”