Uplifting Female And Minority Entrepreneurship

Sujatha Ramanujan is the managing director of Luminate a startup accelerator for early-stage optics, photonics and imaging companies.

Women and minority-run businesses are sorely under represented and under funded. Women own 42% of all companies in the U.S.—half of them are minority owned—and yet, only 2.3% of venture capital funding went to women in 2020, a drop from 2.8%, the all-time high reached in 2019.

Recognizing the unique business challenges women and minority entrepreneurs face and providing support will help even the playing field and pave the way for those following in their footsteps. We can provide it from the get-go, starting within schools and extending throughout communities, including workplaces, capital providers and within the industries served.

Let’s take a look at some opportunities for forging change for women and minority entrepreneurs by addressing the systemic challenges that exist, which include recognizing differences, securing capital, building a network and acquiring the skills necessary to build a business. These hurdles aren’t entirely unique to women and minorities, but I find they are often more pronounced and deserving of attention.

Respond to the unique needs of the entrepreneur.

If we’re going to help elevate underserved populations in entrepreneurship, as leaders, we must first stop lumping women and minorities into a singular category. I know firsthand that the barriers I face as a woman are different from those that I have as an Asian entrepreneur. I find that while Asians are not under-represented in the technical community, there are distinct regional differences in the acceptance of Asians in leadership positions. As so, financially, under-served minorities such as Black, LatinX and Indigenous communities face challenges that their counterparts may not.

Raise financial support from the ground up.

Statistically, and as evidenced in my work with scores of entrepreneurs participating in accelerator programs, underserved founders often struggle more than their counterparts to gain the support needed to bring their ideas to life. I’ve seen their struggles typically start at the early stages of business conception. All too often, they don’t have the advantage of securing a check from a family member or friend to get their business off the ground, nor do they have adequate personal savings or the credit history to secure a small business loan or to support their living expenses as they try to launch their business. They also lack the support needed to find it elsewhere.

Local, federal and even global economic development programs as well as regional support for living expenses can help.

The investment community is another part of business infrastructure that is ripe with opportunity for providing better support. Venture capital firms can offer support to women and minority entrepreneurs first by hiring more women and minorities. Today, only 4.9% of U.S. venture capital partners are women, 33% of them women of color. Needless to say, there’s massive room for improvement. Diversifying firms can broaden perspectives and lead to far more diversified investment portfolios.

Building better networks is a life-long journey.

Leaders in education have a powerful opportunity to help forge change by having a clear eye out for the unique needs of those who don’t fit into the majority. They can select and assemble inclusive, cross-disciplinary teams that organically become career networks.

I believe some do this well, but many others leave it in the hands of students, which can result in women playing the roles of lone wolves. This is a double-edged sword. While it may build fortitude and assertiveness simultaneously developing cross-disciplinary skills, from marketing to technology and finance, I find that it does not encourage team building skills. Building and leading a team are integral parts of business and professional growth. When we teach someone to work without support, we may discourage them from building and seeking support, then label them as difficult to work with. We might not recognize that we are punishing the same behaviors we forced them to develop.

Building businesses takes skill.

The power of teamwork extends well beyond graduation. Like universities, the business community can also help by building teams that give players learning opportunities within other disciplines—legal, accounting and sales, for instance—that will later become important components of networks, and ultimately effective business plans.

Organizations can also do a better job fostering mentorship, which has the power to motivate and encourage growth and enhance skill sets, including softer skills like communication, decision making and leadership. This can also help build more inclusive workforces, matching seasoned professionals with new hires and guiding ongoing relationships.

Accelerating change.

There’s progress within the infrastructure of entrepreneurship—encouragement for girls and women in traditionally male-oriented careers like STEM, investment in diversity and inclusion programs, and gender equality strides in the investment community—but there’s much more work to be done.

Female and minority entrepreneurs can speed the progress by surrounding themselves with people who get it, understanding their unique challenges and asking for help.

One powerful way to do all three is through participation in like-minded communities and organizations. Join an entrepreneurial focused co-op space and introduce yourself. You’ll meet other people who share your challenges. Help each other out. Share best practices as well as your networks.

Widen that community by getting to know your county representatives and congressmen and women. Review their advisory boards and graduating companies to find programs that reflect the diversity you need to be seen, heard and truly supported. Take advantage of everything they have to offer, including their expertise and the networks.

There’s enormous gain to be had from the innovation and contributions of women and minorities. Equal participation could raise the global economy up to $5 trillion, while encouraging others to follow their dreams and providing the support needed to make them come true.

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