Failure vs Fraud: Investing in Black Businesses

Echoes of hard times. If these words aptly describe current world conditions, it certainly highlights the plight of black-owned businesses even more. How so?

It is a fact that no business can succeed without capital or funding. Hence, it comes as no surprise that many black-owned businesses have shuttered for lack of funding. Reports have shown that black-owned businesses are less likely to be approved for bank loans. According to the Federal Reserve, black-owned businesses have a loan approval rate of 46.5 percent, which is extremely poor compared to that of white-owned businesses which stands at 75.3 percent.

The effect of the pandemic has made the gap in financing between black-owned and white-owned businesses even more glaring. The National Bureau of Economic Research reported that 41 percent, that is 440,000, black-owned businesses closed between February and April this year. Needless to say, this is gigantic, considering that only 17 percent of white-owned businesses closed during the same time frame.

True, the landscape right now looks good for the black community. People are rooting for us due to the Black Lives Matter movement, which has shed light on the injustices we face in recent times. We’re receiving gifts and even a measure of funding. But we can’t get comfortable. We need to strategize for ourselves. We need to continue to build our legacies so that we can empower generations to come. The 10K Project ? helps facilitate that.

The 10K Project ? is a community of black investors who fund innovative black-owned businesses for as low as $100. You may think of us as investor-business matchmakers.  We introduce small dollar investors to black entrepreneurs seeking funding. (Investors don’t necessarily have to be black, but businesses must be black-owned). Think about the pivotal changes this brings to both these individuals. The latter gets the funding they need to take their business to the next level, while the former adds to their portfolio so that they can leave a legacy for their children. We make that happen.

We believe that if 10,000 investors funded a company with just $100 each, we could raise $1 million for a business. Thus, we can fund our own companies, create our own jobs, and profit from our own innovations. By becoming a member of our community, you are taking a step towards bridging the wealth gap and making a legacy for future black generations.

 As we urge you to join us, we understand that you have questions. Here are some highlights from our last meeting, where we addressed several important questions and made some important distinctions.

ADDRESSING THE FRAUD QUESTION

The issue of fraud is important, and it’s one we must address. Here’s what we can assure our investors: the SEC will vet all businesses. In addition to the SEC requirements, we’ll do our own due diligence (or research). We’ll review their business model and other information regarding their business. Investors, however, also have a responsibility to ensure you avoid being defrauded. You, as an investor, must do your due diligence (or research). Research and ask questions. You may also want to participate in our online learning where we’ll be giving you the tools you need to invest shrewdly.

We also want to urge all our entrepreneurs to please bear with us because we won’t be taking it easy on you. In a bid to curtail fraud, we’ll be making many requests and asking many questions. So make sure you have your information assembled when you come to us. We owe it to our investors to be thorough.

FAILURE- NOT EQUAL TO FRAUD

Now will be a good time to state that there is a difference between fraud and failure. Our goal is to make sure the businesses we invest in succeed. We do this by patronizing them and promoting their products. But as much as we hope all the businesses we fund succeed, we also know that some just won’t. Maybe the money we raised wasn’t enough, perhaps they miscalculated, or maybe the market changed. Think of all the brilliant ideas behind many startups before the outbreak of Covid-19. Many of them have crumbled now, through no fault of their own. Who could have envisioned the outbreak of a pandemic that would bring the world to a standstill?

Plus, not every business will turn out to be successful. It’s important to note that that’s not fraud, that’s failure. And it’s a risk we, as investors, will have to keep in mind.

We will place scalable businesses on our platform - those with the potential to multiply revenue with a minimal incremental cost. We’ll favor businesses with an exit strategy and businesses that can be built into profitable ventures and that can be sold for a premium. So, if you are raising $300,000 and your business model could grow the company to a valuation of $3 million…that’s exactly what we are looking for. And those are the kind of businesses we’re going to be having on The 10K Project ?.

We are funding businesses that cut across different niches. We may have real estate project during one week followed by a tech product and then followed by an agriculture company. If you review five businesses on the platform, we will work diligently to ensure two will be of interest to you. You’ll have enough options to diversify your portfolio.

JOIN THE 10K PROJECT ?

At The 10K Project ?, we recognize the potential in black-owned businesses. We recognize that investing in them is the way we bridge the wealth gap and leave a legacy for our children and their children after them. Visit us at www.the10kproject.com to see answers to other frequently asked questions and become a member today!

References

https://www.google.com/amp/s/www.voguebusiness.com/companies/black-owned-businesses-investment%3famp