Building a Legacy for the Next Generation of Black Women Entrepreneurs Black/African American women are one of the fastest growing demographics of entrepreneurs in America and are key to driving small business growth. In fact, according to the Wells Fargo 2024 Impact of Women- Owned Businesses Report, between 2019 and 2023, Black/African American women-owned businesses saw average revenues increase 32.7%, compared to 12.1% for all women-owned businesses. 1 To offer perspective, after the 2008 financial crisis, women-owned businesses had not only recovered but had surpassed average revenue levels from before the crisis to 2008: $172,000 in 2019 compared to $151,700 before the crisis. However, this was not the case for Black/African American women-owned businesses, whose average revenue was $35,600 in 2019 compared to $40,400 prior to the crisis. Fast forward to the COVID-19 pandemic, Black/African American women-owned businesses came out stronger and now, Black/African American women business owners have outpaced growth between 2022 and 2023 in terms of employment and revenue compared to all women-owned businesses. 1 Whether starting, stabilizing, or growing businesses, Black/African American women- owned small businesses are expanding. Today more than ever, it is crucial to build wealth for the next wave of Black/African American women entrepreneurs. Supporting the future of Black/African American women-owned businesses requires focusing on key areas, such as addressing gaps in funding, growing access to capital, and providing robust mentorship opportunities. Filling the gaps in funding Despite starting new businesses at high proportions, many Black women and women of color obtain funding at lower rates. Research By ANGELA DAVIS
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shows that women of color receive less than 0.2% of venture-capital funding. 2 Black women also encounter similar barriers in accessing capital, with about 61% self-funding their business and exhibiting a higher level of debt. 3 For example, during the COVID-19 pandemic, many Black/African American businesses experienced difficulty attaining Federal stimulus payments. Furthermore, in 2020, there was a decline in Black/African American owned businesses. 1 Building wealth for the next generation of Black/ African American women entrepreneurs starts with building resources and growing capital for the entrepreneurs of today. Improving access to capital It’s important to acknowledge that access to capital remains a challenge for Black/African American women-owned businesses, even in the face of increasing revenue. According to the Wells Fargo 2024 Impact of Women-Owned Businesses Report, Black/African American women-owned businesses employ approximately 9.4 workers and generate $1,037,900 compared to all women-owned businesses, which employ approximately 8.5 workers and generate $1,602,500. 4 While barriers to funding persist for many Black/African American women-owned small businesses, new bank and philanthropic programs are now being built to address this gap and help Black women identify capital opportunities to build sustainable small businesses. In addition to traditional lending, working with Community Development Financial Institutions (CDFIs) and Minority Depository
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