In a country where Black people represent 13% of the population, they comprise only 2.2% of U.S. business owners. And in 2020, of the $148 billion that venture capitalists provided in funding, only about 3% went to Black entrepreneurs.
Those facts, and their underlying systemic racism, were the basis for a pitch competition that launched last year by musician, record producer, and entrepreneur Pharrell Williams. His organization, Black Ambition, aims to distribute startup capital and mentorship to Black and Latino entrepreneurs with big ideas—and it’s now back for a second year. In an interview with Fast Company, Williams says that’s because society can’t depend on investors to even out racial disparities in the business world—let alone the government, whose very policies created the inequities, and which is not moving fast enough to correct them.
In 2021, Williams’ creative organization, I Am Other, brought together partners like Adidas, Chanel, and the Visa Foundation to help fund and mentor budding Black and Latino startups. From March 22 until May 8, Black Ambition, the 2021 World Changing Ideas winner for Impact Investing, will again accept applications for pitches from early-stage businesses in consumer products and services, healthcare, and technology, with new categories in media and entertainment and Web3. Businesses may win up to $1 million in funding; in a separate category, founders who attend historically Black colleges and universities (HBCUs) can win up to $100,000.
Williams, who started the initiative after 2020’s summer of protests around racial equity, says he can’t rely solely on public policy to level out disparities. “That would be nice, but I don’t know that we can wait on the government,” he says, citing slavery and Jim Crow-era laws that legally prohibited Black people from collecting and building wealth in the same way white people could. He notes that American financial institutions are also rooted in racism, pointing out that today’s biggest insurance companies made much of their wealth from insuring enslaved people.
Finally, Williams says he’s motivated to continue Black Ambition because of the widespread blowback against the teaching of structural racism in schools. Many conservative state legislators have passed bills banning Critical Race Theory, which is an opportunity for students to learn about the legal bases for the racism embedded in society. “What that leads to is some of our other American brothers and sisters not really understanding why they have the instincts and the inclinations to leave us out of business opportunities,” he says. “It follows along with the rest of the superstitions and the stereotypes that were created by—I hate to say it—our government.”
Given their relative lack of generational wealth, minority entrepreneurs often need investors the most—yet they’re most likely to be ignored by venture capitalists. Even well-intentioned VCs often fund who they know and don’t seek out relationships with people of color in business, says Felecia Hatcher, Black Ambition’s CEO. “Sometimes,” she says, “you’ve just got to call a spade a spade, and it’s just flat out racism.”
Black Ambition made a dent in addressing those inequities last year. With prizes ranging from $15,000 to $1 million, it funded 34 companies, including beauty businesses, a maternal healthcare company called Emagine, and an ed-tech startup called Boddle Learning based in Tulsa. It was particularly important, Hatcher says, for Black Ambition to help finance businesses based in what used to be known as Black Wall Street. Its grand prize winner was Livegistics, a Detroit-based software company whose operating system provides real-time digital records to stakeholders in the construction industry.
This year, to add to mentorship from the partners—which Williams calls the “strategic scaffolding” to support up-and-coming businesses—there will also be guidance from last year’s winners, Justin Turk of Livegistics and Kadidja Dosso of Dosso Beauty (which won the HBCU prize), who are holding office hours for new applicants.
Placing aside the $3.2 million that Black Ambition initially invested, last year’s companies have since gone on to independently raise $40 million. Some have also entered business accelerator programs, which they had struggled to access beforehand. Hatcher discloses that, in the past few weeks, Livegistics has raised $4 million, while Boddle has raised $2 million, including a portion from Google. Another company, RotorX, which is developing drones to lift up to 150 pounds, has generated interest from the U.S. military, she says.
Generally, the companies are “hiring up the wazoo,” Hatcher says, and “being massive contributors to the economy and their communities.” According to internal estimates, if Black and Latino entrepreneurs had the same rate of support as their white peers, they’d add an estimated 9 million jobs to the economy. Hatcher hopes these successes will show investors the value of these entrepreneurs, to the point where VCs will fear missing out on investing.
For Williams, who calls himself simply a “mascot” in this venture, the vision is to evolve Black Ambition for years to come, and to build a real ecosystem of support—as long as the government continues to drag its feet on meaningful change. “Listen, when the government catches up, it’s amazing, because there’s been some progression,” he says. In addressing pandemic recovery, for example, the Biden administration has explicitly aimed to prioritize underserved racial minorities. But Williams considers that action slow, and not enough to fully correct serious inequities. “Until that happens—no, sir. We’ve got to just keep going forward.”