A decade from now historians will discuss the economic impact of a two-day event that took place on Nov. 15 & 16, 2011 at Rutgers University, which brought together more than 120 minority business leaders, investors and entrepreneurs for the first-ever "Gathering of Angels" summit. The catalytic gathering is destined to be viewed as a turning point in Black American history from a focus on 20th century civil rights battles to 21st century economic engagement.
There were no cries for a government-led solution. No one blamed President Barack Obama for anything. Not a soul called for an act of Congress. This was the stage upon which visionary economic leadership would emerge for Black and urban America. And the stakes were extremely high.
Consider the current economic state of Black America:
- All of America's 1.9 million Black-owned businesses produced revenues totaling less than 1 percent of GDP.
- 1.8 million of Black-owned businesses are sole proprietors with zero employees.
- Black-owned tech startups received just 1 percent of tech investments last year.
- Black investors comprise less than 1 percent of the angel risk capital investment space.
In America's 21st century knowledge-based, tech-driven global innovation economy, these stats are devastating. Consider also the fact that such stats were compiled from 2007 government data before the economic collapse. Consider also the Kauffman Foundation proclaims that all net new job growth since 1980 is the result of companies five years old and younger. These fast-growing startups are fueled by risk capital investments.
Question: If Black Americans are neither an appreciable amount of the high growth and high-tech entrepreneurs funded by risk capital nor an appreciable amount of the risk capital investors betting on high-growth companies, how is job growth generated and wealth created in Black America?
Answer: There is no job growth in Black America. And the median wealth in White America has grown to 20 times the wealth in Black America.
The problem, however, isn't isolated to Black America. It is a serious national problem when the nation's "private sector" and federal and state governments have all failed over six decades to invest sufficient resources into ensuring equitable economic opportunities -- from the education pipeline to entrepreneurial productivity -- for all sectors of society.
America's Unsustainable Economic Disconnect
The result is significant portions of America are today disconnected from the job growth and wealth creation processes that account for all net new job growth in the nation.
Unfortunately, vast regions of urban America have not benefited from the job growth and wealth creation process. A significant portion of that process is derived from investing the pensions of Americans of all races through venture capital funds into entrepreneurial ventures of primarily one race. This unsustainable disconnect represents an economic time bomb. America's global economic competitiveness is at stake when large growing swaths of her minority filled urban sectors are not fully participating in the processes of a 21st century innovation economy.
Visionaries: The America21 Project & CUEED
Recognizing a need to act, visionary leaders strategized and planned a historic event that would produce an environment in which a microcosm of the innovation economy job growth processes could engage minority entrepreneurs and interested investors. The plan was a success.
Co-produced by The America21 Project and The Center for Urban Entrepreneurship & Economic Development (CUEED), the "Gathering of Angels" summit was billed as "The Role of Angel Capital and High Growth Entrepreneurship in Building 21st Century Urban Innovation Ecosystems." The energy and excitement that filled the Bove Auditorium at Rutgers Business School in Newark, New Jersey was an indicator the attendees knew they were participating in a very special, if not historic event.
On the heels of CNN's controversial documentary, "Black in America: New Promised Land, Silicon Valley," the Gathering of Angels summit produced a screening and discussion of the documentary with four of the featured entrepreneurs of the NewMe Accelerator and Navarrow Wright, CTO of Interactive One, who was also shown in the film. That same evening, 13 minority entrepreneurs (including four women) pitched their startup companies to a panel of four judges and an audience of business leaders and investors. Within a few days, more than half were in negotiations for funding with interested investors as a direct result of pitching at the summit.
Connecting the Disconnected
While a national debate ensued over the issues raised by Techcrunch founder Michael Arrington in the CNN documentary -- who admitted he didn't know any Black entrepreneurs -- the America21 Project and CUEED recognized the economic issue at its core was more about relationships.
Silicon Valley isn't as much a meritocratic environment as it is touted by some. Investors readily admit they invest in people, in teams ... not merely ideas, however merited. The relationships necessary to gain access to investors underscore the significance of networking, as well as recruiting startup team members in accordance to the pattern matching that occurs across the investor landscape nationwide. The lack of Black and Hispanic investors in the risk capital space adds to the problems Black and Hispanic startup founders encounter as they compete for face time with investors who are unaccustomed to seeing them.
The Gathering of Angels summit featured talented minority entrepreneurs who presented a quality deal flow showcase so compelling that investors engaged immediately. That process could, and perhaps should be occurring nationwide on a regular basis.
There is a culture of innovation spreading across America today. Entrepreneurship is the economic engine that will drive the nation out of recession. Black America must aggressively engage in the knowledge-based, tech-driven innovation economy by ensuring those who seek entrepreneurial endeavors are adequately prepared; and those with financial means to invest in startups are risk-astute and willing to invest in funds that foster the growth jobs and wealth in our disconnected urban communities. Black capital must get in the game to create such opportunity.
The economic uplifting of Black and urban America also lifts the tide of economic strength across the nation as a whole.
Heretofore there has been little focus on ensuring an inclusive society contributes equitably for the benefit of all. The Gathering of Angels summit at Rutgers represents a turning point that establishes a common ground upon which relationships can be fostered between the established innovation ecosystem and America's economically disconnected demographics that seek to pull themselves up by extending a hand out to one another.