Despite the fact that small businesses in the US make up more than 99 percent of all businesses and employ nearly half of the country's workforce, starting up is mentally and economically challenging, with women and marginalized communities more barriers they face due to the difficulty of accessing funds.
Shernaz Daver, Operating Partner and Chief Marketing Officer at Khosla Ventures, said unfortunately women face twice the obstacles, as in the past year she has heard many say that when trying to raise funds they were not taken seriously, they were asked when they were going to have children or that their financial projections were aggressive, until they went with their male partners.
“Unfortunately this is happening in 2022 and 2023 and I have been in the industry for over 35 years and have heard this many times. And if you are Afro-descendant or Hispanic, it is worse. But in general I think we have to change things and there are some things that are changing," he added during a session with the media and entrepreneurs held by Ethnic Media Services.
First of all, she said, women are creating and building exceptional companies and it is not being celebrated, such is the case of Glasgow, Bumble, 23 and Me or Canva, which are multimillion-dollar businesses created by exceptional women and leaders who are truly They have to be recognized more.
Second, he commented that venture capital also follows patterns, like when we marry people who are similar to us, we also associate with people who are similar. So, if there were more female venture capital partners, they would invest more in companies that women like, because when they are in a position of power, influence and economic decision-making, it turns the tide for many others.
Third, she pointed out that women have to be given permission to fail, but this is not done as a society. When a woman is going to run a company, in addition to receiving less money for financing, she cannot experiment either, and there are very few companies in the world that start with a product and it is successful, but it is measured differently if it is a woman.
I have to believe that the world is changing and we will continue to change it if we all do it as a community. Private business, public business, venture capital, the women themselves, education. A big part of it is family and opportunities. I think we can do it and if we do it, we can have our own Steve Jobs woman or our own Jack Ma woman."
For his part, Charles Phillips, Chairman of the Board of Infor, the third largest software company for small and large companies worldwide, said that the situation was further complicated by the COVID-19 pandemic, which, already that caused the closure of many small businesses, while they managed to survive, their recovery has been slow, especially those owned by Afro-descendants.
He added that, according to a survey, the majority of Afro-descendant families said they did not know someone who could lend them $3,000 if they wanted to open a business.
Similarly, he commented that around 74 percent of Afro-descendant people who are starting a business do so in the same 5 industries, and most of them tend to be small consumer-oriented businesses.
"So it's OK. We want people to do that, but there are other sectors of the economy. If you look at wholesale companies, where they sell to other companies, they make up 24 percent of the economy. For Afro-descendant entrepreneurs, this represents 1 percent of what they do. You have to understand that there are other parts of the economy that you can access, despite not having training.
In this sense, he specified that training is an important aspect and that is what business incubators are dedicated to, helping people to create their businesses, advising entrepreneurs, preparing them and obtaining capital, helping them with talent and with its strategy, so that there is more entrepreneurial spirit, especially in the Afro-descendant community.
Virginia Senator Mark Warner said that when he was governor, he started what is now one of the largest community development financial institutions in the nation, the Department of Community Development Financial Institutions Fund (CDFI Fund). of the United States Treasury.
He added that more than 60 percent of the beneficiaries of the fund are low-income people, which is why it provides capital to put it in the hands of people from Afro-descendant and Latino communities, among others, where, for example, the number of Latino companies that lost to the COVID-19 pandemic was around 40 percent.
They also have an initiative called LIF, which focuses on the first generation of homebuyers, which is more than two-thirds people of color, and may qualify for a mortgage that is better than what they would find on the market.
In turn, Sierra Georgia, a former federal employee, who set up a "gelato" truck in Washington DC in 2013, told the story of how she did her business, since when she was little her parents were also entrepreneurs and had a moving company, for what since I was little I was used to that world.
Later he pursued a career in international business and after quitting his job, he decided to start a “gelato” business, for which he got his first financing from a CDFI and grow by leaps and bounds.
In her opinion, if the powers that be, the government, business support organizations like hers can do more to improve small businesses and become big, there would be a lot of innovation by entrepreneurs and there would be more small businesses. able to grow.
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