In 2021, about 161,000 of the 6 million companies that employ people in the U.S. were owned by African Americans. That’s better than the previous year, but to Erin Horne McKinney, the number’s still too small. “Research shows that entrepreneurship is really the way we will close the wealth gap in this country,” she says.
The challenges Black entrepreneurs face are legion, and start with investment; a recent Goldman Sachs study found that loan applications from Black business owners get rejected at three times the rate of those by white business owners.
Horne McKinney has personal experience with this, having been in Silicon Valley during the mid-2000s when the incubators and accelerators were offering programs to juice up the promising tech start-ups after the dot-com boom. “There were older white men running them and younger white men getting in them,” she says. “There were no women. There were no minorities. So I had what I call my Legally Blonde moment,” she recalls, referring to the now iconic 2001 movie in which Reese Witherspoon’s character realizes she has bigger fish to catch than the ex-boyfriend whom she enrolled in Harvard to win back.
To try to close the gap, Horne McKinney, 48, is heading up a new center for Black entrepreneurship at Howard University, her alma mater, that will be networked across four Historically Black Colleges and Universities (HBCUs) to convene conferences, fund research into Black entrepreneurship, and help HCBUs create programming and initiatives that focus on building business skills.
“When you compare HBCUs to predominantly white institutions, we are so far behind in the investment around entrepreneurship and innovation on our campuses,” says Horne McKinney, who serves on the board of the Black Innovation Alliance. “Our center brings together not just practitioners but researchers to pilot best practices by creating blueprints that we know are proven models.”
Having been in her role for about a year, Horne McKinney says she’ll know she’s having an impact when there’s a rise in the number of jobs created by Black-owned businesses and the number that are opening bank accounts and improving their credit. Supporting Black entrepreneurs will help other entrepreneurs too, Horne McKinney says. “If we can solve for those in our community who receive the least support, we really solve for all.”
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