National Black Businesses Month has been a success and Black entrepreneurs are growing every day, but there is still more work to be done according to Andre Swanston.
“I would say the biggest barrier is still access to capital,” Swanston told BLACK ENTERPRISE.
“There’s been a lot of systemic hurdles that have made it challenging for Black communities to retain and pass on wealth, so whether it’s starting a hair salon or tech company, a lot of times those businesses are started by money from the family. The Black community is still behind on those things because in many instances we’re only four or five generations out of slavery, Jim Crow.”
Swanston, who was raised in the Bronx before moving to Connecticut, has a wealth of experience in private wealth management and investing including at J.P. Morgan and Ameriprise Financial. In 2013, he started his own tech startup, Tru Optik, which he ran for seven years before selling it to TransUnion in 2020.
He added that two other issues still holding back Black businesses are the banking industry, which gives loans to Black citizens at a much lower rate than other races, and access to venture capital, which less than 3% goes to Black entrepreneurs. Additionally, just 2.4% of U.S. businesses are Black-owned.
“It’s not entrepreneurial spirit, it’s not intelligence, it’s not work ethic but it’s access to capital in all assets of capital.”
In the aftermath of the Black Lives Matter movement, multiple reports have said Black Businesses across the U.S. are experiencing a boom and Black Businesses are thriving, but according to Swanston, that doesn’t mean corporations are making good on their pledges.
“Corporations love to make claims about how much they care about diversity equity and inclusion, access to capital and other resources but if you look at the percentage of the capital that has gone out to Black businesses, it’s worse than it was pre-pandemic,”
The University of Connecticut graduate said.“So what you have is a lot of talk, but very little actionable success to show for it.”Swanston added Black businesses and entrepreneurs can’t count on others to help them and if you look at the results of when Black people do have access to capital and the resources, they’re as successful or more successful than anybody else.
Swanston and his wife have invested millions in Black and Latino entrepreneurs and businesses, something he says is not only a duty but a responsibility for successful Black citizens who are in a position to do so.
A litany of notable Black celebrities including actress Keshia Knight Pulliam, musicians Jay -Z, Rihanna and Pharell Williams, former NFL Safety Malcolm Jenkins, and Tennis stars Serena Williams and Naomi Osaka have started venture capital funds designed to help Black and minority businesses with access to capital technological resources and more.
“I think wealthy Black individuals investing more capital and venture funds is extremely helpful,” Swanston told Black Enterprise. “One, from the capital standpoint, and two, the recognition or attention that those companies get from being associated with those successful people can give a jolt to Black businesses.”