Report reveals black entrepreneurs in Greater Manchester are overlooked for investment
A new report has revealed that many black business owners in Greater Manchester are being routinely overlooked by investors, with some claiming that 'people of colour don't get the same opportunities'.
The study by the Black United Representation Network surveyed twenty black entrepreneurs about their experience in business. Many said a lack of access to funding and business networks, and less generational-wealth than white counterparts played a part.
Dan Sodergren, who runs tech company YourFlock, said: "Some of the barriers that we've had as black entrepreneurs is getting that bit of investment. Normally you'd go to someone called a venture capitalist, and they will lend you the money to scale your business.
"One of the issues is that 90% of VCs are male and they are white. So you find that black entrepreneurs don't get the funding, it's something like 0.2% goes to black entrepreneurs.
"If you're a black female entrepreneur that actually does down to 0.02%. So it's actually quite scary how little money trickles down."
The report, led by author Dr Marilyn Comrie, found:
A lack of generational wealth and business know-how amongst black business owners
Many found that accessing support and was difficult, with the perception that existing business networks are too insular and a closed shop.
A general unawareness of the support available.
Business owners have had problems accessing funding and investment: Most are self-funded.
Three is a struggle to raise investment in Greater Manchester, compared to London.
A Perception that investment is even harder for all-Black teams.
Many entrepreneurs have a lack of time and resources to attend training. There is a need for bespoke, hands-on support like bid writing assistance.
Raphael Ogunrinde, the founder of Calyx Drinks, which manufactures non-alcoholic craft soft drinks contributed to the report, and said: “There are barriers for Black people to get investment in the UK.
"Venture Capital firms don’t take you seriously. I had to pitch to 55 investors before I got my first investment. It does take a toll on your mental well being. People of colour don’t get the same opportunities”.
One solution that was suggested by a number of interviewees was the creation of a Black Venture Capital Fund.
Raphael said: “In America, black entrepreneurs get supported and there are Black VC’s. Black run venture capital funds don’t exist in Greater Manchester. There are funds targeting women and people with disabilities but nothing for other diverse businesses”
“The percentage of Black people who get investment funding is extremely low. The race thing is a shame. If you’re an all black team, you need to get a white person on board. White stale and pale is the currency. I’ve had 4 x tech companies never got funding. With a white partner, I got funding. You’ve got to play the game. There aren’t enough women and Black people who are VCs anyway."
The report authors say they hope meaningful change to improve the support for black entrepreneurs is on the way.
Speaking to ITV News, Dr Marilyn Comrie said: "The recommendations are customised and tailored business support that better meets their needs, the creation of a diverse founders network to create peer-to-peer support and integrate them into the innovation network.
"It's about creating a diverse founders investment fund, and finally it's about collating data on ethnicity, so that we can ensure we've got an evidence base for further development."
The Barriers to Inclusion report makes five recommendations:
There's a need to develop sustainable, customised business support delivered by diverse providers.
A Diverse Founders Network should be created to provide support
Improve access and trust through partnerships with diverse communities
More data should be gathered on ethnicity in businesses, to drive evidence-based policymaking.
A targeted Diverse Founders Investment Fund run by diverse finance professionals in Greater Manchester
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