Through a Different Lens

Much has been written recently about the black entrepreneur and the lack of capital to support him or her. Of course, it took a series of vivid events on national television and elsewhere to generate this debate. It reminds me of the evening news in the 1960’s and 1970’s when the reports were replete with body counts from Vietnam. Only when the airwaves were saturated with this data did the mood of the country change and tilt towards a resolution to the conflict.

This is where the comparison and analogy end for me. What is very real are the hurdles that have been unconsciously, some would say purposely, erected over the course of 155 years to challenge and slow the progress of the black entrepreneur. Try to look past the fact that I am 67 years old, white and the product of the Northeastern private school establishment – stay with me. I have not traveled their path and would not claim the black entrepreneur’s perspective as my own. I will not dwell on the ridiculously low number of black men and women in venture capital firms nor will I cite statistics regarding the black/white wealth gap. I won’t even discuss the massacre on Black Wall Street in 1921. These are all red meat for a political debate, but I will share my observations as one who has traveled the global capital markets and witnessed capital formation across time zones, cultures and markets.

Capital markets participants tend to have their cherished investment methods that have been created, tested and proven across many transactions over many market cycles. They know what to look for in a deal that will result in success more often than not. There is “muscle memory” in the markets and repetitive ways to identify, analyze and structure opportunities. This is an art form in financing early stage companies of virtually any kind from massive world beating tech ideas to the corner restaurant. More often than not the entrepreneur will be successful in obtaining capital because she or he has done it before and has a verifiable track record or they have a network of wealthy or near wealthy friends, family and classmates to seed the enterprise.

Many venture capital investors specifically state they seek to do business with serial entrepreneurs who have a history of successfully starting companies and taking them to grand values. We all understand this and recognize the risk mitigation inherent in these standards. However, it is not only risk mitigation, but also the perceived improved probability of success based on prior experience. The entrepreneur has struggled before and won and, therefore, will have learned how to be resilient, to react and adapt. Of course, there are a multitude of reasons that a company succeeds or fails, but these management skills are highly prized by early stage investors in backing their portfolio companies.

Little of this analytical framework fits the majority of black entrepreneurs, except that most of them are indeed resilient and have learned to react and adapt. I might also add that the typical black entrepreneur that I have met is able to do more with less simply out of necessity. The standard playbook prescribes that these qualities should be obtained in the pursuit of commercial success. Perhaps it is just too hard to quantify when developed outside this framework.

I would suggest that the investor would be well served to view the black entrepreneur using the same time-tested methodologies, but to utilize a different lens. The same success can be derived from the same qualities and skills that might have been developed in a totally different petri dish with a more powerful catalyst. It may take that different lens to recognize the similarities and the strengths.

Consider the young “kid” who grows up on the mean streets and gets mixed up with the local crowd of gangs. He ends up with a bullet wound and serving time. This young man has an epiphany, decides to turn his life around and wants to inspire others to do the same. With not a single clue how to accomplish that he connects to a single individual who admires his story and his goals. The young man absorbs everything he hears from this individual, teaches himself discipline and learns from his new network how to start a business and market his brand. He is passionate about his enterprise and what it can do for him and others. Resilient? Check, Focused? Check, Adaptable, Check? Will he be successful? Too early to tell, but he has all the qualities.

Now some might say that this is just too far-fetched a story and does not reflect the real world. Well, it does. However, for the skeptics, consider the well-trained, black engineer who has indeed been working in the corporate world on enterprise level software solutions. He has an idea to solve many of the problems that face his customers, but his employer does not see it the same way. He departs and cobbles together a team to design, build and market the product. He doesn’t know exactly where to turn for capital, so instead, hits the road to sell the beta. He secures three pilot customers on three different continents all using his own savings to launch the company. Resilient? Check, Focused? Check, Adaptable? Check. Let’s go ahead and add Resourceful.

These are real people. There are countless others - the young nurse who builds a company from scratch to bridge the gap between the hospital community’s nursing needs and the nurse’s personal scheduling availability, or the young man who grew up in a single parent home with little other than his football skills, made it to the NFL and is now building a software company after teaching himself coding. These people are as brilliant and capable as any self-motivated person you will find. The real thing they have in common is that they do not fit the box, they cannot be seen through the lenses we use.

One of my favorite relevant quotes from Adam Grant, a Professor at the Wharton School is, “The true measure of people is not the height of the peak they have reached, but how far they have climbed to get there”. In my opinion, these innovators and entrepreneurs do not need charity, they do not need another government program throwing money around, they don’t need more training. If investors would look for the skill sets and qualities, which they have always sought, through a different lens, they just might find what they are looking for.