It can be incredibly difficult for entrepreneurs to make a name for themselves in a variety of different industries. There is a great deal of competition existing between entrepreneurs. Even within growing industries, there is only so much space available for new business owners. It can take years for an entrepreneur to find a successful concept, during which time they may try and fail to launch different businesses. This will result in money lost and in some cases the potential loss of connections. Becoming a successful entrepreneur, therefore, requires more than just drive, determination, and great ideas. It also requires a base of money, as well as connections with successful people within the industry that the entrepreneur is interested in. While it’s difficult for any entrepreneurs to successfully launch, it is especially challenging for black entrepreneurs. This is why Pharrell Williams has launched a nonprofit that will offer resources for black entrepreneurs as well as Latinx entrepreneurs, with the intent of making success more attainable for them.
While all entrepreneurs face the same basic challenges, black and Latinx entrepreneurs face additional issues that do not necessarily affect white entrepreneurs. Ingrained generational poverty is more common in communities of color in the United States, and especially within black and Latino communities. Although it is by no means guaranteed that a black or Latinx business founder will come from an impoverished family, it is statistically more likely that they will come from lower income families than white entrepreneurs. This means that it is more difficult for these entrepreneurs to afford college or even trade school, where they can not only receive valuable educations but make important connections in their desired industries. They also lack the seed money that many white entrepreneurs gain from their families or simply from not facing the same economic challenges.
Entrepreneurs of color also must deal with prejudice and lower expectations in the United States. Successful white business owners may not be as inclined to offer the same resources for black entrepreneurs and Latino entrepreneurs that they would offer white entrepreneurs. Furthermore, due to ingrained poverty and obligations to financially sustain their families, potential black and Latinx entrepreneurs simply may not see starting a business as realistic. Every entrepreneur has a unique experience, but the statistics make clear that there is a divide present. Although black and Latinx people comprise roughly 30% of the American population, they make up just 20% of its entrepreneurs. In order to make the number of entrepreneurs reflect the populations, systemic changes will likely be required, beyond entrepreneur tips.
Pharell Williams is himself not only a Grammy award-winning record artist and producer but also an entrepreneur. Following the release of his song “Entrepreneur” with Jay-Z, in which he recites the lyric “I am black ambition”, Williams has started a nonprofit organization reflecting the song’s message, literally called Black Ambition.
The nonprofit was launched in response to the social issues being faced by people of color throughout the history of the United States, but especially during 2020. Although all Americans have struggled with the health and economic crises caused by the COVID-19 pandemic, black and Latinx Americans have suffered at a much more pronounced rate. In fact, the coronavirus has been killing black and Latinx patients at a rate higher than that of white Americans. Additionally, the economic downturn caused by the virus has been causing higher eviction rates and homelessness rates in these communities, likely in part due to the fact that these communities were already struggling financially. Additionally, the killings of individuals like George Floyd and Breonna Taylor highlighted racial inequalities in the U.S. and sparked global protests. In his statement announcing the launch of Black Ambition, Williams highlighted the reality that black and Latinx entrepreneurs face unique barriers to success. Even being approved for business lending opportunities can be more difficult for black and Latinx entrepreneurs.
Black Ambition: Enabling Growth for Entrepreneurs of Color
Black Ambition is offering resources for black entrepreneurs and Latinx entrepreneurs in a manner that was previously difficult for potential small business owners to find. The simple notoriety of Pharell Williams makes the organization more prominent and easy to access. Its initial launch includes two competitions that offer prizes in the form of seed capital as well as pitch feedback and mentorship. One of these prizes is known as the Black Ambition Prize, while the other is called the Black Ambition HBCU Prize. The second prize is targeted towards students and former students of Historically Black Colleges and Universities. The grand prize winners for the Black Ambition HBCU prize will receive up to $250,000 in funding. This amount of funding can be major for new entrepreneurs, allowing them to expand their business acquisition efforts at a rate exponentially faster than would be available to them without funding.
There are obviously requirements that applicants must meet in order to be considered for the Black Ambition prizes. Applicants for both prizes must be black or Latinx, and their startup ideas should focus on design, technology, healthcare, or consumer products and services. The Black Ambition grand prize winner will receive even more funding than the grand prize winner for the Black Ambition HBCU prize. The grand prize will total up to $1 million in funding. Additionally, nine other teams will receive smaller prizes.
The idea behind Black Ambition’s prizes is to not only provide resources for black entrepreneurs and Latinx entrepreneurs but long term change. Ideally, this will make it easier for inclusive entrepreneurship to become more normal. Black and Latinx entrepreneurs will no longer seem unusual. This could have a marked psychological impact, not only forcing white business owners to work with and rely upon black and Latinx business owners at a higher rate than they once did, but making clear to young people of color that entrepreneurial success is possible. In terms of the Black Ambition HBCU prize, it will also highlight these universities and making it clear that they are available and ready to offer resources to young black Americans. Williams hopes to furthermore uplift these universities, which will ideally make clear the resources for black entrepreneurs that they can offer.
Black Ambition is backed by a number of different major businesses and organizations. This includes Adidas, the Chan Zuckerberg Initiative, the Rockefeller Foundation, Chanel, Tony’s Chocolonely, and the Visa Foundation. Individual donors have also made donations to the nonprofit, demonstrating an understanding of the importance of providing resources for black entrepreneurs and Latinx entrepreneurs.
The Prizes: Understanding How They Work
As with any prize competition, Black Ambition offers many resources but also must take steps to ensure that it is fair and equitable. Just as the nonprofit is attempting to provide resources for black entrepreneurs and Latinx entrepreneurs in order to ensure a more inclusive and equitable future, so too is it implementing fair selection processes. The organization is reaching out to diverse networks focusing on inclusive entrepreneurship. It is also building a team to review applicants that reflects the diversity of the applicants themselves. Additionally, the mentors presented to prize winners will be business owners from diverse backgrounds, and applicants are asked to sign to Kapor Capital Founders’ Commitment. This is a pledge to build diverse and inclusive companies, ensuring that the goal of Black Ambition is carried through beyond the initial awarding of the prizes.
It is important that the winning entrepreneurs are not where diversity ends. Their businesses also need to hire employees from diverse backgrounds. In this sense, the winners could someday provide resources for black entrepreneurs as well as resources for Latinx entrepreneurs. Their employees could very well move on to launch their own businesses in the future, inspired by the success of their employers.
An additional consideration for these entrepreneurs to make is how they will use the prizes that they receive. While some portions of the prizes will be awarded in the form of cash, others will come in the form of investments. Black Ambition will use any earnings from investments to support future prizes, further ensuring resources for black entrepreneurs and Latinx entrepreneurs remain available. Winning entrepreneurs can use this funding to develop presentation products for future investors, or offer benefits packages and work resources to attract more qualified employees. Funding is perhaps one of the greatest challenges for entrepreneurs from diverse backgrounds, as previously discussed. Therefore, if this initial hurdle is crossed through prize money and investments provided by Black Ambition, many entrepreneurs can speed up their progress exponentially.
In terms of non-monetary prizes, there are also different mentorships and resources offered through Black Ambition. These do not solely come in the form of prizes for winning applicants. All eligible applicants will be offered a virtual membership to Betaworks Studio. Betaworks Studio gives members access to a network of business experts and entrepreneurial content. They will also all receive written comments on their applications, allowing them valuable feedback that could help those that do not win prizes improve their pitches for the next round of competitions in the future. The semi-finalists will be able to participate in Black Ambitions Circles hosted by Betaworks. This will act as a peer to peer mentorship program and allow applicants to learn from experienced entrepreneurs. Finalists will additionally have access to one on one coaching and as they begin to develop their pitches for the final judges and panelists. Even those who do not win prizes, in other words, will finish the competition as far stronger business people than they were when they began.
It’s important for entrepreneurs considering applying for Black Ambition to understand that the process moves far beyond simply applying for a prize. In July 2021, the nonprofit will host Demo Day, at which point the finalists will share their ideas with not only judges but potential investors as well. They should treat this opportunity as they would any pitch opportunity with investors.
Applicant Eligibility: Understanding Further Requirements
Black Ambition is offering resources for black entrepreneurs and Latinx entrepreneurs, but not without certain requirements. Although the basic requirements were mentioned above, more detailed requirements move beyond the backgrounds of the applicants. For example, although there is no maximum amount of team members allowed, each team must have a minimum of two members. Although the lead of each team can only be on one team, other team members are allowed to participate in a maximum of two teams. This means that if a secondary team member is on a team pitching a CBD business, they could also participate in a team pitching a tech business.
The lead of the team is typically the business president or CEO, or otherwise the most senior member of the team. Leads should ensure that their team is applying for the correct prize, as teams may only apply for the Black Ambition Prize or the Black Ambition HBCU Prize, not both. Their business does not need to be legally incorporated before the teams begin applying, and teams that did not receive funding for one year can apply for the next year.
Although teams do not need to have fully incorporated businesses ready when they apply for these prizes, they should ensure that they are ready to answer complex questions. Investors will be putting their money at risk when committing to prize winners, just as they would if they were investing in businesses in a more normal context. If a business owner cannot answer questions as simple as “What is a hybrid company?” they may not be ready to apply for Black Ambition prizes. However, this does not mean that they cannot learn and apply for prizes in the following years.
Black Ambition not only is benefiting black and Latinx entrepreneurs but people who will benefit from their ideas. It’s quite possible that these entrepreneurs will be able to offer new healthcare solutions, as well as breakthroughs in technology and social welfare.
Launching a business is challenging and expensive. Entrepreneurs must pay for development costs, employee salaries and benefits, web design services, and much more. Black Ambition and similar nonprofits are simply making it easier for the pool of entrepreneurs in the U.S. to become more diverse.